Coinberry supports a wide range of cryptocurrencies, which includes Stellar (XLM). Check out these frequently asked questions to learn more about this innovative project.
What is Stellar?
Stellar Lumen (XLM) is an altcoin created in 2014 by the former head of Ripple (XRP), Jed McCaleb. McCaleb was inspired to create his own project, Stellar, through his work with blockchain and crypto technologies at Ripple.
The Stellar network is a decentralized protocol that allows users to exchange various currencies and assets through buy and sell orders. It is open-source and targets the developer community. Stellar can handle up to 1000 transactions per second at super low operating costs (in the range of 0.00001 Lumens). These fees are used to defend against possible malicious assaults on the network.
On average, it takes between 2 and 5 seconds for payments to process on the Stellar network.
What is the Native Token of Stellar?
To raise funds for development, the Stellar foundation launched a token sale called an ICO (Initial Coin Offering). During this token sale, they managed to amass USD $39 million and allocated 100 billion lumens.
It is important to emphasize the difference between the Stellar network and Lumens (XLM), the project’s native token.
Unlike Bitcoin and other altcoins, Stellar Lumens does not use a mining system. In other words, it is impossible to create more tokens than are already in existence.
Stellar’s distribution method for XLM tokens is as follows:
- 5% are for the Stellar.org organization to perform specific operations.
- 20% are available for individuals who already own Bitcoin and XRP (Ripple).
- 25% are for other non-profit associations.
- Finally, 50% is freely accessible to anyone in the world.
Lumens tokens do not undergo mining or halving as Bitcoin (& other altcoins) do periodically. However, the Stellar Foundation – the governing council responsible for regulating these tokens – did burn over half its original tokens. Hence, the total circulating token count was reduced to 50 billion XLM after some initial projections were made regarding how much was needed.
How Do The Stellar Tokenomics Work?
While Ripple, Stellar’s direct competitor, focuses more on financial institutions (Money Service Businesses), Stellar is aimed at individuals and is open source. Both offer the same transaction speed.
Despite this bifurcation of values, the Stellar protocol remains logically based on the Ripple protocol. To explain his departure from Ripple, Jed McCaleb gave two main reasons:
- Differences of opinion with Chris Larsen, another co-founder and CEO of Ripple. As these grew over time, the collaboration became less efficient.
- His stance that no cryptocurrency system can develop effectively as long as it is based on a lucrative logic, where most tokens would be owned by the company itself.
In 2015, the name “Lumen” emerged, which refers to the Stellar cryptocurrency. While the supply of these tokens was split in half on November 4, 2019, the initial volume of Lumens XLM released was 105 billion.
Even though Stellar is not one of the top ten cryptocurrencies by market capitalization, it does have a growing community of users who enjoy solving real-world problems. Some of which include:
- Speed and volume of transactions.
- Security of transactions.
- The functionality and scalability of the platform.
- The signing of numerous partnerships, including IBM, Tempo, and Deloitte.
Rare shadows on the board come to counter these strong points. Here are some of the downsides:
- Market competition: many currencies are now placed in the same niche as Stellar Lumens. Permanent innovation is therefore essential if it wishes to maintain its rank.
- Overvaluation of the currency: compared to the percentage of global transactions it represents, it may be overpriced, making it susceptible to rapid falls and volatility.
- Market capitalization: this is very high compared to the volume and value of tokens actually in circulation in the market today. So here again, there is a potentially dangerous imbalance.
However, despite these challenges, Stellar has secured some notable partnerships with multi-billion-dollar companies like Moneygram, Flutterwave, Airtm, Wyre, and more.
The Stellar Foundation is also behind the several successful projects solving everyday challenges, including:
Tala – Consumer credit product spanning across three continents seeking to cater for the underserved/underbanked in developing and emerging economies.
Tempo – Issuer of the EUR Stablecoin and licensed money remittance company based in France.
Cowrie – Nigerian-based stable coin issuer and African money transfer service company.
How Many Stellar Tokens are in Circulation?
At the time of writing, there are just over 24 billion Lumen (XLM) tokens in circulation, representing less than half of the total available supply of 50 billion tokens. Since late 2020-2021, the value has increased by more than 400%.
The first quarter of 2018 remains the best quarter yet, with prices hitting an all-time high (ATH) of CAD $0.8755. The community anticipates that prices may return to CAD $0.20 sometime in the future. You can check the current price here.
Which Wallets Support Stellar?
There are plenty of wallets on the market that support XLM. Desktop wallets like Exodus, Stargazer, and StellarTerm are excellent options, as are online wallets like StellarPort and Stronghold. Those who value security above everything else might consider hardware wallets like Trezor or Ledger.
An important question to ask yourself is what you plan to do with your digital assets. Do you plan to hold them? Then you might consider a hardware or desktop wallet. If you expect to do a lot of trading, then it might make more sense to keep them in an online wallet so they’re easily accessible.
Community Support/Social Media
Looking to join the community? Check out the links below:
- Social Media
Where can I buy Stellar?
You can buy Stellar on Coinberry by signing up for an account here.
Want to learn more about Stellar? You’re in luck! We have additional content here that tells you all about this unique and exciting cryptocurrency.