Stellar: An Introduction to the Decentralized Payment Network

Launched in 2015, Stellar is a decentralized payment network and platform focused on providing fast, affordable cross-border transactions and hosting Initial Coin Offerings (ICOs).

The Origins of Stellar

Stellar was founded in 2014 by Jed McCaleb, who previously co-founded Ripple, and former lawyer Joyce Kim. McCaleb left Ripple to create a new financial system aimed at everyday users. The nonprofit Stellar Development Foundation was subsequently established with the collaboration of Stripe's CEO.

Stellar's Decentralized Network

Stellar is built on a decentralized network spread across multiple servers. This ensures that no single source monitors the activities carried out on Stellar. The network is supported by servers running the Stellar Core software, each maintained by different individuals and organizations. These servers communicate and synchronize with each other to maintain an up-to-date copy of the network ledger.

Decentralization and ISO-20022 Compliance

Despite appearing contradictory, a project can be both decentralized and ISO-20022 compliant. Decentralization refers to the network's structure, where decisions are made collectively without a central authority, as seen in Stellar. ISO-20022 compliance, on the other hand, pertains to operational standards for financial messaging between institutions. Stellar's adherence to ISO-20022 ensures its transactions are compatible with traditional financial systems, demonstrating that a decentralized network can still align with standardized financial operations.

Lumens (XLM): Stellar's Native Currency

Lumens (XLM) are the native digital currency used on the Stellar network. They were created to provide a quick and low-cost method for sending money across borders, overcoming the challenges of high fees and lengthy transaction times associated with traditional cross-border transactions.

The Stellar Development Foundation, a nonprofit organization based in Delaware, supports the network and its cryptocurrency. As one of the oldest altcoins in the crypto finance space, XLM currently ranks as the 24th largest digital asset in the world.

Stellar vs. Ripple

As a fork of Ripple, Stellar has made a name for itself in the decentralized finance (DeFi) space. While Ripple primarily serves centralized financial institutions, Stellar caters to both centralized institutions and DeFi users through its decentralized applications (DApps). With hundreds of partners and an ecosystem that processes millions of transactions daily, Stellar offers a wide range of services similar to traditional banks but at lower fees and faster processing times.

Stellar's Consensus Protocol

Unlike cryptocurrencies like Bitcoin, which rely on mining, Stellar is based on a consensus algorithm known as the Stellar Consensus Protocol (SCP). SCP is a decentralized mechanism that allows for consensus without depending on a closed system to accurately record financial transactions. According to Stellar, SCP is the first provably safe consensus mechanism that offers decentralized control, low latency, flexible trust, and asymptotic security.

David Mazières, the co-founder of Stellar, published the founding document of SCP, titled "Stellar Consensus Protocol: A Federated Model for Internet-level Consensus." The white paper highlights the need for financial infrastructure that supports organic growth and innovation while ensuring the integrity of financial transactions.

Stellar's Mission and Partnerships

Stellar's primary goal is to create a more inclusive digital economy by connecting people worldwide to low-cost financial services. By doing so, the platform aims to fight poverty and maximize individual potential.

Stellar has formed partnerships with well-established centralized institutions, such as Deloitte, International Business Machines (IBM), Tempo Money Transfer, TransferTo, and Flutterwave, which utilize Stellar's network for software solutions. As an open-source project, Stellar has the potential to balance its cross-border payment solutions with DeFi in the future.

Smart Contracts on Stellar

Stellar supports smart contracts on its network but is currently incompatible with the Ethereum Virtual Machine (EVM). Flare, a bridge through the F-Asset Protocol, converts XLM and other cryptocurrencies into bridge tokens, providing a solution for this incompatibility issue.

Stellar Team Background

Jed McCaleb, Stellar's founder, has a strong background in the virtual currency space, having co-founded Ripple and been involved in creating eDonkey and Mt. Gox, an early Bitcoin exchange. Joyce Kim, who co-founded Stellar alongside McCaleb, is an experienced lawyer passionate about financial inclusion and social impact. The Stellar Development Foundation that supports the network is run by a global team of experts in finance, technology, and business who work diligently to enhance the platform and bolster the adoption of Stellar's technology worldwide.

Current and Upcoming Project Development

Stellar continues to develop its platform and establish partnerships with organizations in finance and technology sectors. Through these collaborations, Stellar aims to expand to a broader audience, facilitating more accessible and affordable financial services worldwide. Additionally, the team is working on improving the network's compatibility with Ethereum, allowing for seamless interactions between the two ecosystems. The integration of the Flare Network's F-Asset Protocol offers a promising solution to this challenge, fostering further growth and innovation for Stellar and its user base. As the platform gains traction, the Stellar Development Foundation will continue championing its mission of a more inclusive digital economy shaped by low-cost financial services accessible to everyone.

Stellar Price Analysis

As of July 29 2025 Stellar has a marketcap of $13B. This is {{percentagefromath}} from its all time high of $0.875563. In terms of its tokenomics, there's a total supply of 50B with 62% currently outstanding. Keep in mind Stellar has a fully diluted value of $21B which many investors might interpret as overvalued.

Of course, don’t trust price predictions alone, always check the Coinrotator token screener to follow the trending market.