Stellar

Stellar is an open-source, decentralized payment network designed to move value quickly and cheaply across borders and between currencies. Co-founded in 2014 by Jed McCaleb and Joyce Kim and overseen by the non-profit Stellar Development Foundation, the network aims to connect banks, payment systems, and individuals — with a particular focus on expanding financial access for underserved populations. XLM, also called the lumen, is its native token.

How Stellar works

Stellar does not use mining or conventional staking. Instead, it runs the Stellar Consensus Protocol, a form of Federated Byzantine Agreement in which each node selects a set of other nodes it trusts, and the network reaches agreement through these overlapping trust relationships. This design delivers fast finality: transactions settle in a few seconds and are irreversible, with very low fees.

A key concept on Stellar is the Anchor — a trusted entity, such as a licensed financial institution, that accepts deposits of real-world currency and issues corresponding tokens on the ledger. Combined with the network's built-in decentralized exchange, this lets value move between currencies through efficient conversion paths. The network also supports smart contracts through its Soroban platform and is increasingly used for tokenizing real-world assets and issuing stablecoins.

The role of XLM

XLM serves several practical purposes: it pays the network's small transaction fees, provides the minimum balance required for accounts (both anti-spam measures), and can act as a bridge asset when converting between currencies without a direct market. XLM has no maximum supply cap in the conventional sense, but no new lumens are being created: the original supply was reduced by a large burn in 2019 and annual inflation was disabled, leaving a total of about 50 billion XLM, of which roughly 34 billion are in circulation.