Introduction to Stellar
The Stellar network facilitated one of the largest cryptocurrency airdrops in history, distributing $125 million worth of Lumens (XLM) tokens to users who signed up for Blockchain.com wallets and verified their identities. This event highlights Stellar's mission to bridge traditional finance and decentralized systems.
But what exactly is Stellar, and how does it work? This guide explores:
- The Stellar platform's cross-border payment solutions
- Lumens (XLM) as the native cryptocurrency
- Key differentiators from competitors like Ripple
- The network's unique consensus mechanism
From Ripple Fork to Independent Network
Stellar's origin story traces back to 2014 when co-founder Jed McCaleb (former Ripple developer) launched it as a Ripple fork. Though initially sharing code, Stellar evolved into a distinct protocol with:
- Decentralized governance (vs. Ripple's bank partnerships)
- Federated Byzantine Agreement consensus model
- Focus on financial inclusion for unbanked populations
👉 Discover how Stellar compares to other payment networks
Stellar vs. Ripple: Key Differences
| Feature | Stellar (XLM) | Ripple (XRP) |
|---|---|---|
| Target Users | Individuals & small businesses | Banks & financial institutions |
| Consensus | Federated Voting | Validation Nodes |
| Market Cap | $1 billion+ | $25 billion+ |
How Stellar's Consensus Works
The network uses Federated Byzantine Agreement (FBA) where:
- Nodes form "quorums" based on trust relationships
- Transactions require quorum approval
- Approved transactions propagate network-wide
This balances speed (~5s transaction finality) with decentralization.
Lumens (XLM) Token Economics
As the native asset, XLM facilitates:
- Cross-currency settlements
- Anti-spam measures (tiny fees deter spam)
- Network participation rewards
With ~30 banks currently testing XLM and adoption in Pacific Island retail systems, its utility continues growing.
FAQ: Stellar (XLM) Questions Answered
1. Is Stellar better than Ripple?
While both enable fast payments, Stellar prioritizes accessibility whereas Ripple focuses on institutional use cases. Neither is objectively "better"—they serve different needs.
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2. How do I store XLM securely?
Use official Stellar wallets or hardware devices like Ledger. Always enable 2FA and store recovery phrases offline.
3. What's the max supply of XLM?
50 billion XLM exists, with ~20% circulating currently. No further tokens will be mined.
4. Can I earn passive income with XLM?
Yes! Many exchanges offer staking rewards up to 5% APY for holding XLM.
Disclaimer: Cryptocurrencies are volatile—always conduct independent research before investing.
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