Stellar (XLM)

What is Stellar?

Stellar (XLM) is the native asset of the Stellar network, a platform designed for fast and low-cost value transfers. Launched in 2014 by founders Jed McCaleb and Joyce Kim, the network aims to connect financial institutions, payment systems, and individuals. It operates using its own consensus mechanism, the Stellar Consensus Protocol, which facilitates quick and efficient agreement on transactions without traditional mining. The primary function of XLM is to serve as a bridge currency for cross-border payments and to pay for transaction fees on the network. As a Layer-1 protocol, it provides the foundational infrastructure for developers to build applications and issue new assets.

How does Stellar work?

The Stellar network operates on a unique consensus mechanism known as the Stellar Consensus Protocol (SCP). Unlike proof-of-work or proof-of-stake systems, SCP does not rely on mining or staking to validate transactions. Instead, it achieves consensus through a federated voting system among a set of trusted nodes.

Participants in the network, known as nodes, choose their own trusted mini-networks, referred to as quorum slices. These individual quorum slices overlap to form a global network-wide agreement on the validity of transactions. This structure allows for decentralized control without requiring every node to agree with every other node directly.

When a transaction is submitted, it is broadcast to the nodes, which then vote on its inclusion in the next ledger. The process is designed for speed, with transactions typically confirming in just a few seconds. This rapid finality makes the network suitable for payment applications that require quick settlement.

Stellar use cases

Stellar tokenomics

The tokenomics of Stellar are centered around its native asset, XLM, which has a fixed maximum supply of 50001806812 tokens. This finite supply means that no additional XLM can be created beyond this established cap, making the asset non-inflationary by design. As of recent data, the circulating supply stands at 34135089920.0756 XLM. The primary utility of XLM within the network is to pay for transaction fees, a mandatory requirement for all operations to prevent spam. Unlike some other blockchains, the Stellar Consensus Protocol does not generate new tokens through mining rewards, so the total supply is managed according to its initial design.

Stellar price history & milestones

Stellar was launched in 2014, introducing its XLM token to the digital asset market. The price of XLM has experienced significant fluctuations over its history, reflecting broader market trends and developments within its ecosystem. Its all-time high price was recorded on January 4, 2018, when it reached a value of $0.9381. Conversely, the token's all-time low occurred earlier in its history, on November 18, 2014, at a price of $0.001227. These historical price points illustrate the range of its valuation since its inception. Based on market capitalization, Stellar holds a rank of 13 among other digital assets in the market.