What is Stellar (XLM)

Written by
Uchenna Victor
Updated on
June 15, 2023
7 min read

What is Stellar (XLM) coin?

Stellar is a blockchain-based decentralized protocol for digital currency to fiat money transfers. It allows cross-border transactions between any pair of currencies.

Being an open network for money, Stellar has made it easy for users to create, send and trade digital representation on all forms of money. For instance, Dollars (USD), Euros (EUR), and Bitcoin. The word “Lumen” is explicitly based on the network and comes with the tag XLM.

Emerging from a rift within the cross-border coin executives, Ripple (XRP), Stellar came onto the cryptocurrency ecosystem in mid-2014. The Lumen (XLM) coin was created and made over to the public. Read our comparison of XLM vs XRP.

Meanwhile, with one goal to unlock the world’s economic potential by making money more fluid and people getting empowered, Stellar has a close-knit team of experts within the globe that have different perspectives and visions for expanding the project.

Stellar Lumens Team

The CEO and Executive Director of Stellar, “Denelle Dixon.”

She was once COO and Corporate Secretary at Mozilla Corporation. During her time at Mozilla, she spearheaded Mozilla’s legal, policy, business, revenues, and operations to defend an open, transparent, and commercially sustainable web. With past experiences that include working at private equity firms, Terra Firma, on-brand issues assessments, and managing Yahoo’s legal teams advising on products, human rights, antitrust, and litigation issues, she leads later Stellar development foundation.

Jed McCaleb, the Founder, and Chief Architect.

Recognizing that the world’s financial infrastructure is broken and too many people are left with resources, Jed co-founded, combining his love for open systems with a passion for building inclusive, accessible resources.

Jordan Edelstein, the Chief Marketing Officer (CMO)

Jordan Edelstein at Stellar is experienced with a demonstrated history of driving both stand-alone products and persistent live services and always focuses on potential and existing consumers.

David Mazières

The Founder and Chief Scientist at Stellar has lots of research experience in the computer system. He definitely looked for good programmers interested in working on an open-source project at Stanford with his skills.

These are the amazing teams that have made significant impacts alongside Justin Rice (Head of Ecosystem), Candace Kelly (General Counsel), Katya Korepanova (Head of people & culture), Mark Heynen (VP of Business Development), Nicholas Barry (CTO) and Jason Chlipala (COO at Stellar)

Stellar Partnerships

Furthermore, Stellar has partnered with so many projects looking at the dazzling side and keeps on aiming at their goal.


A fast and cheap cryptocurrency to revolutionize the wire transfer industry in the banking system. IBM is one of those corporations and eventually chose to partner with Stellar to build IBM blockchain world wire.


This is also one of the top partners of Stellar Foundation. They partnered with Stellar due to low transaction fees.


They were built on Stellar, where recipients don’t have to travel and wait in long lines to receive and experience an expensive wire transfer. They created their native utility token called “RMT” inside the Stellar ecosystem.


They are popular online payment processing for internet businesses. They integrated XLM as a medium of payment in the stripe platform.

HTC Exodus

They created a secure crypto wallet that’s called “ZION.” Zion has supported Bitcoin and the most popular altcoins like XLM.


They integrated the Stellar blockchain and are hoping that Stellar’s on-demand Liquidity would be big enough in the upcoming years to help them achieve a better adoption rate among migrant workers in the US.

Stellar blockchain has partnered with many projects and keeps on propelling.

Stellar Technology

Stellar’s technology is unique in its own right and is gaining acceptance generally for its various use cases. We cannot underestimate the importance of blockchain technology to the world today. Since Satoshi Nakamoto invented the blockchain in 2008, its importance has grown beyond measure. First, solving the double-spending problem and evolving to become a secure platform on which applications and projects can be launched. Like all the blockchains, Stellar’s blockchain seeks to make transactions faster, more scalable, and less expensive while keeping the network in sync. Stellar’s basis is to make the financial system of the world work together on a single network. How remotely possible is that? It’s possible and already attainable. Stellar is an open-source network for currencies and payments where you can have digital representations of all money forms. From Dollars (USD) to Pounds (GBP) or even Naira, digital forms that can be traded are made existent. The good part of all these is that these digital currencies have the exact value as the fiat equivalent and can therefore be traded or exchanged anywhere and anytime. This, in effect, makes money borderless.

Core Features

Knowing Stellar’s features is of great importance as we understand why it is a massive project and is gaining adoption among the wider community. Below are some of the core features of the Stellar blockchain.

1. Decentralized: The world and almost all activities in it are moving towards decentralization, where activities and decisions within a group are distributed widely so that there is no central authority who makes decisions. Traditional finance makes way for decentralized finance (DeFi) while decentralized exchanges (DEXs) are increasing in popularity. Stellar’s blockchain belongs to no one and is highly decentralized, making it safe, secure, and tamper-proof.

2. Open source: The Stellar blockchain is open-source, meaning that data on it is available all the time if it needs to be modified or redistributed. This is a significant trait of a proper blockchain. A model that encourages collaboration.

3. High-speed transactions: The speed of transactions on Stellar is Stellar, if you know what we mean. In as much as efficiency matters, speed also matters, and with Stellar blockchain, transactions take less than 5 seconds to get confirmation. Now that’s awesome!

4. Scalability: The Stellar blockchain is known for its ability to support many transactions at a given time. It is also known to have that natural ability to scale. This makes it a top-notch project.

5. Low fee infrastructure. The cost of transactions on Stellar is quite favorable with negligible fees. The base fee for a transaction on the stellar network is 0.0001 XLM, with the funds’ sender’s expense.

6. Annual inflation. Within the Stellar ecosystem, there is a fixed inflation rate of 1% every year. This is to help account for lost XLM and possibly to drive economic growth within the Stellar ecosystem.

7. Multi signatures. Stellar’s ecosystem enables multi signatures where a group of users can sign single documents for approval or appraisal. This ensures more secure transactions within the Stellar Blockchain.

8. Smart contracts. Like with multiple signatures, the Stellar ecosystem allows smart contracts to be done. This reduces the need for intermediaries and brings down the incidence of losses from malicious and accidental causes.

9. Database restoration. With Stellar, it means you can restore your database with ease. PostgreSQL and MySQL are supported.

Advantages And Disadvantages of Stellar XLM.

The world is known to be driven by decisions. These decisions are born out of a need to weigh the positives and negatives on a scale before diving into a venture. Human behavior and animal behavior would usually engage in an event if the positives outweigh the negatives but would still dive if they feel it’s worth the risk in the end. To this effect, we will be looking at the positives (advantages) and negatives (disadvantages) of Stellar (XLM).


1. Stellar (XLM) solves a huge problem of international funds transfer. With Stellar, an Individual A, in Country A, can send Currency A to an Individual B, in Country B that uses Currency B. These days with an increase in international trade, transactions between banks in different countries are at an all-time high. With Stellar’s XLM, the funds in Currency A can be converted to XLM and transferred to Bank B in Currency B without hassle as long as the banks are linked on the Stellar network. This is easy.

2. With Stellar XLM, there are no strict rules regarding validation. With XLM, there is no need for validators as anyone can validate the blockchain ledger.

3. A partnership with IBM is integrating Stellar’s XLM technology to help achieve their goal of cross-border transactions. This shows that Stellar is being held in great regard.


Stellar’s disadvantages are not relevant, but people (users) might still refer to them as disadvantages.

1. Stellar’s XLM is a fork of Ripple’s XRP. This paints a picture in the people’s minds that Ripple should be the main platform and Stellar is nothing but an imitation. This shouldn’t be a cause for concern, but people might still see it as one.

2. Just like the first supposed disadvantage, the second disadvantage is similar. XLM is a decentralized currency, but XRP is a centralized currency. Banks and financial institutions would naturally gravitate towards decentralized currency excited for cross-border transactions.

3. Ripple is viewed as the more significant project and has a broader spread. This can be overturned in the future, but for now, it is what it is unless something drastic happens.

How to store and manage XLM

1. To buy, check the bottom taskbar at the base of your Atomic Wallet app on mobile. Press buy and see that you can purchase XLM with a wide range of currencies. These include USD, EUR, GBP, CAD, AUD, RUB, JPY, KRW, CHF, CZK, DKK, NZD, PLN, SEK, ZAR, HUF, TRY, and ILS.

2. To exchange, check the taskbar at the base of your Atomic Wallet app on mobile. Press “Exchange” and see the list of coins you can exchange with or for XLM.

3. Once you are done with all these transactions, you can leave your XLM safe and secure in your xlm wallet and watch it grow when it appreciates.


In truth, Stellar solves the problem of cross-currency, cross-border transactions, and its importance cannot be overemphasized. To put this into context, the partnership with IBM is a huge one and shows the extent to which XLM’s services would be in need now and in the nearest future. Tempo, an electronic payment institution, was within the confines of an unhealthy system where the normal remittance can be very slow and constricted as a result of increased operating cost and inefficiency. Tempo decided to build their solution on Stellar, which would help faster, cheaper, and more efficient trading of these tokens. Cowrie and SatoshiPay are among others who leverage on XLM for better transactions.

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