Stellar Network and Lumens (XLM) Review

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Stellar Lumens (XLM) Review

What is Stellar?

Stellar is a new open-source digital platform that uses decentralized currency and financial trading systems to connect banks, payment networks and people. The program was started by Stellar Development Foundation (SDF) as a way of promoting international financial access, literacy and inclusion. Through Stellar, SDF hopes to provide an affordable fiscal system in which individuals of all income categories can have access to secure and cost effective financial services.

Unlike other digital currency networks, Stellar operates on a nonprofit infrastructure and is designed to securely, flawlessly and affordably support virtual transactions between different individuals and with multiple currencies. It also allows developers to create payment solutions that can be used in various types of applications. New currencies can be developed by application providers and exchanged for real world denominations at Stellar gateways.

How It Works:

Stellar operates as a network of decentralized servers that power a shared ledger which records transactions within the ecosystem. The ledger records your cash as credit that’s issued by special gateways. For instance, gateways can change dollar currencies to credits on the Stellar network.

Typically, credit is issued to your virtual account which functions as a digital wallet in exchange for the deposit. The account operators should be trusted to hold your cash and honor withdrawals. Moreover, Stellar holders are allowed to send credit to other individuals on the network through various currencies. The network will instantly exchange value credits at the lowest possible charge.

When making transactions, the servers communicate mutually with each other to validate exchanges and synchronize the ledger after every 2 to 5 seconds, a mechanism known as consensus. Through the payment network, people can easily send and exchange different gateway credits among each other. Something that allows for not only buying and selling currencies in a similar way as foreign exchange, but also conversion of currencies easily during transactions.

What are Lumens (XLM) tokens?

So, what is Stellar Lumens? Lumen is a native asset of Stellar, meaning it’s a value currency built into the network. Commonly abbreviated as XLM, it’s a unit of digital currency that helps to move cash around the globe and perform transactions between different currencies fast and securely.

Apart from being a value of exchange, Lumen also plays a significant anti-spam role within the payment network. Each transaction attracts a fee of 0.00001 lumens which helps to prevent malicious users from spamming the ecosystem. Essentially, Lumen operates as a security token by reducing DDoS attacks that seek to create a large amount of transactions or expend large quantities of storage space within the ledger.

Furthermore, Stellar requires that all accounts must maintain a basic balance of 0.5 lumens, which ensures that the accounts are authentic and also helps the networks to maintain a flawless flow of transactions.

Lumen also helps to streamline multi-currency transactions, it fosters trades between different currency pairs among which there isn’t any large direct market and also functions as a bridge. This role is made possible if there’s a liquid market existing between the lumen and the particular currency.

Lumens can be stored on the network through trusted providers and transactions managed via the Web, or wallet client apps that are readily available for Android, iOS and desktop which are Centaurus, Stellars and Stargazer respectively.

Use cases for Stellar:

Remittances – Send money anywhere in the world quicker, easier and for a fraction of a cent. This is not an exaggeration and when we say “cent”, we’re referring to $0.01.

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Micropayments – Decrease the cost of smaller transfers. With most of the money transfer services available on the market, it’s not even feasible to make small money transfers because you might end up paying more on fees than the transferred amount. Great for IOT (Internet of Things).

Mobile Money Transfers – Stellar will allow mobile money platforms to be interoperable so customers and send to money to recipients with different providers.

Service the underbanked – Stellar cuts costs so you can bank new customers. Reach the base of the pyramid with low-cost accounts, loans, and microsavings.

Future impact on global money transfer

Lumens will help minimize inefficiencies among monetary institutions and consumers making international transactions. Once you upload cash you’ll have instant access to it, plus when you transfer money globally the process shall be simple and efficient.

In a practical way, it means you could send payment to a friend in Mexico using XLM and he/she can make withdrawals in pesos. Similarly, if you were going overseas for business or holiday it’s possible to use XLM to pay without going through the entire process of changing your local cash to a foreign denomination.

Recently, Stellar also announced a partnership with KickEx and IBM to create a blockchain-based international payments solution. It will help reduce transaction fees and increase operation speeds as well. The partnership shall also decrease cross-border transaction charges and lags in processing.

The definition of Stellar for people who don’t know anything about the crypto space:

Stellar is a non-profit virtual payment network that makes use of Lumens (XLM) as its inbuilt cryptocurrency. It was developed to make transactions much easier, quicker and affordable.

Stellar Lumens News

If you want to keep up with the Stellar developments and news about this project, be sure to bookmark their Stellar Lumens news section here. Alternatively, you can check the Stellar Lumens Reddit.

Current Exchange Rates

GBP to Euro: 1.1388 EUR

GBP to USD: 1.2429 USD

GBP to CAD: 1.7594 CAD

GBP to AUD: 2.0438 AUD

USD to Euro: 0.9163 EUR

USD to AUD: 1.6444 AUD

USD to CAD: 1.4156 CAD

Euro to CHF: 1.0551 CHF

Euro to CHF: 1.0551 CHF

GBP to CHF: 1.2020 CHF

USD to JPY: 107.3288 JPY

GBP to CNY: 8.8198 CNY

GBP to ZAR: 22.9690 ZAR

Euro to PLN: 4.5710 PLN

Information: These are the current mid-market “official” rates. Unless you are buying tens of millions monthly, the Buy/ Sell rates will vary from these figures.

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Alternative to Banks

Banks are bracing for hundreds of millions of pounds in new claims for foreign exchange manipulation…

Barclays, Royal Bank of Scotland and four other banks were ordered on Wednesday to pay $6bn (£3.84bn) by UK and US authorities. The Telegraph, 2020

Stellar Lumens (XLM) Review

About Stellar Lumens

The Stellar is a network that provides online payment services. Together with the cryptocurrency Lumens, they form a blockchain platform. The Stellar network was founded in 2020 by Jed McCaleb and Joyce Kim. It operates all the transactions including the Stellar Lumens cryptocurrency. The company’s motto is “Money could move like email”.

The cryptocurrency Lumens is inscribed as XLM tokens. The platform Stellar Lumens allows users to trade the currency between all the digital networks.

The Stellar Development Foundation is registered as a non-profit organization. This means that you will not be charged for your transactions with high fees. Anyway, they accept “donations”.

The functionality of Stellar Lumens network

The platform is recognized as being decentralized. You do not need an intermediate helping with your transactions. You can buy, sell or exchange Lumens tokens on: Bittrex, Poloniex, Binance, RippleFox and other online cryptocurrency exchanges platforms.

The Lumens’ main characteristic is anti-spam network. Due to low fees for each transaction, the attacks are impossible to take place.

A rule to keep your account active is to have at least 20 Lumens in your wallet. This requirement will help developers to separate the authentic users from the offline ones. This is also a key base for a strong security.

The partnership with IBM Corporation

The Stellar Development Foundation is collaborating with IBM Corporation. They will work together to design a new era for blockchain technology. The promises made by the partnership are: lower fees for institutions and improved transactions system. It seems to be a huge opportunity for technology. Not only developed countries will benefit from advanced payment network anywhere in the world, but also those with high potential.

The Advantages of Stellar Lumens

– There are no high fees. You will be charged for your transactions only with 0.00001 XLM;

– Your transactions will be proceeded in short time;

– Everyone can use the Stellar Lumens network. You are not charged for the application and its license;

– Due to low fees per each transaction, you need to have enough Lumens just to cover the base of transactions. As a generalization, with 1 Lumen you can realize 100.000 transactions. It’s not so bad!

– You can become the lucky user of the Lumens’ give away. The Stellar Lumens network gave away already around 1.7 trillion lumens for free. They assure users that such a process is helping the network to grow bigger every year;

– The transactions are proceeded with a high speed;

– The Stellar Lumens network facilitates multi-currency transactions. The token XLM can be traded on every marketplace with all existing cryptocurrencies.

The Disadvantage of Stellar Lumens

– Do not forget that you need to have at least 20 Lumens to keep your account active.


The price for Lumens is growing up hour by hour. It seems to be a great network to invest in. You can buy the cryptocurrency anywhere on the marketplace. The Stellar Lumens assures users that is a strong platform with unique facilities for online payment services.

To stay updated with fresh news we recommend you to follow Stellar Lumens’ official website.

Stellar Lumens Review: The Network Moving Micro Payments

Stellar is one of the most promising payment cryptocurrencies currently on the market. Forging numerous partnerships and building cutting edge tech.

The goal of the Stellar project is to make money move like email. They are building a free and open source that will let anyone build low cost financial apps. Of course, there are a number of competing projects building similar technology.

So, how can Stellar really compete?

In this Stellar review, will give you everything that you need to know about the project. I will also analyse the long term price and adoption potential of their Stellar Lumens (XLM).

What is Stellar?

Stellar is primarily a distributed payments network that is meant to provide a fast, secure and inexpensive cross-border payments solution. It can also be used to issue your own tokens, and as an ICO platform is considerably easier to use when compared with Ethereum.

Overview of the Stellar Project. Image via

The network and its connected foundation were both launched in 2020, and the network is powered by the native Stellar Lumens (XLM) token. The XLM is the key to making nearly instantaneous transactions between different currencies and making payments across international borders.

The Stellar Network

The Stellar network was created as a decentralized platform to enable fast and inexpensive asset transfers to anywhere in the world.

The Stellar network can connect individuals, banks and payment systems to move currencies securely, reliably and rapidly for a fraction of the cost of traditional payment gateways and currency transfers. Stellar is looking to revolutionize international payments and remittances, making them safe, fast, easy and cheap for everyone in the world.

Stellar can also serve as a launchpad for project ICOs, and creating tokens on the Stellar blockchain is much easier than on competing platforms. The Mobius Network, SureRemit, and Smartlands are just a few of the projects that have held their ICO on Stellar.

What makes Stellar Unique?

At first glance, it seems that Stellar provides many of the same services you can receive from your traditional banking system, but there are some key differences that make Stellar unique.

For one thing, the transactions on Stellar take place on a decentralized blockchain and network that has significantly faster processing and lower fees when compared with the traditional banking systems.

Stellar Compared to other projects. Image via Stronghold

With Stellar payments are processed within 2-5 seconds, and fees are so small as to be almost unnoticed. Unchanging one currency for another on the Stellar network incurs a fee of just $0.00006 per transaction. Compare that to an international wire, which might cost as much as $75.

Stellar is also unique when compared with other crypto and blockchain projects. While many of these popular crypto projects are focused on providing benefits to corporations and businesses, Stellar was founded with the noble goal of creating an inclusive digital economy, and as such it serves individuals.

Stellar wants to use its technology, innovation, and position to help “fight poverty and maximize individual potential.”

Stellar’s Technology

The distributed network of Stellar is comprised of a large number of servers, each running the Stellar Core software, and all owned by different people and organizations spread all across the globe.

The Stellar Core software holds its own local copy of the blockchain and communicates and syncs with all the other computers running the Stellar Core software and connected to the network.

Stellar differs from most other cryptocurrencies in that its consensus mechanism is not Proof-of-Work, nor is it Proof-of-Stake. Instead, it uses something called the Stellar Consensus Protocol (SCP) that gives a method for reaching consensus without reliance on a closed system in order to accurately record transactions.

How Stellar Works

The first thing anyone who wishes to interact on the Stellar network must do is to create an account, or rather a wallet address. This will include both the public key that can be shared with others and the private key that keeps your account secured. Your public key is the cryptographic method used to ensure transactions made on the network are secure.

Simple Overview of How Stellar Works

Once you have an account you’ll need to upload some funds to an anchor on the Stellar network. An anchor is a construct that is trusted to hold deposits and to issue virtual credit into Stellar accounts.

The anchor is the connection between the Stellar network and existing currencies. Because of this most of the network anchors are banks, remittance companies, and savings institutions.

After your funds have been uploaded to an anchor you’re ready to take advantage of the near-instant transfers available on the network.

Stellar vs. Ripple

Anyone looking at Stellar is going to automatically try to draw comparisons to Ripple (XRP), since both are payment networks, and both were created by Jeb McCaleb. The two projects do share some similarities, and they are widely seen as competing networks.

That said, there are also key differences between the two platforms, and while some people have called Stellar a fork of Ripple, that isn’t true. Stellar has its own unique code base, and the two have different philosophies.

While Ripple is concerned with the institutional side of financial transactions and has attempted to partner with major global banks to replace global remittance networks, Stellar is focused more on the individual, providing a platform that stresses inclusion and global financial literacy.

Stellar and Ripple Compared

It is true that the two projects were much closer in their features and codebase initially, but after 5 years of development on Stellar, that’s no longer the case. Stellar has changed to the Stellar Consensus Protocol for its consensus mechanism, using a model known as Federated Byzantine Agreement.

Ripple remains with a protocol that uses a mechanism known as proof-of-correctness. According to the Ripple whitepaper this PoC consensus mechanism:

“is applied every few seconds by all nodes, in order to maintain the correctness and agreement of the network”.

There are other differences between the two networks. For example, Ripple has 100 billion total supply of XRP tokens and is deflationary based on a variable burn rate of tokens. Stellar began with a total supply of 100 billion XLM tokens, but currently, the total supply is just over 105.3 billion tokens due to a 1% inflation built into Stellar.

There are also the differences in the target market (institutions for Ripple and individuals for Stellar) that have been discussed already, and the different protocols used to achieve consensus.

The Stellar Team

Stellar was founded in 2020 by Jed McCaleb and Joyce Kim. In addition to being one of the co-founders of Ripple, McCaleb is also the creator of the file sharing site eDonkey as well as the infamous Bitcoin exchange Mt Gox. After two years at Ripple McCaleb felt forced to leave due to a differing philosophy, and he left Ripple to form Stellar.

From Left: Jedd McCaleb, Joyce Kim & Denelle Dixon. Image via Twitter & Creative Summit

The President, CEO, and Executive Director of Stellar is Denelle Dixon. She is a recent addition to the team, having come to Stellar in May 2020 after spending seven years at Mozilla, where she was most recently the Chief Operating Officer. In the past, she also worked as Senior Legal Director at Yahoo after receiving her J.D. from the University of California.

The rest of the team includes technologists, engineers, entrepreneurs, scientists, designers and others, all interested in building an inclusive global financial system. While the Stellar Foundation has offices in San Francisco and New York City, its team members are spread all across the globe.

Notable Stellar Partnerships

One of the best ways to increase adoption and spread more rapidly is through partnerships with existing organizations. Stellar’s leadership team fully understands this, and has formed partnerships in a number of industries and with a broad variety of companies. Below are some of the most significant partnerships:

The largest and most talked about partnership is the one with IBM. Stellar has been working with the venerable technology company since October 2020, and the most recent development has been the launch of IBM’s World Wire, a real-time global payments system that runs on Stellar.

IBM Using Stellar Technology. Image via Stellar Newsletter

Just launched in March 2020, it already supports 47 currencies and works in 72 different countries with 44 banking endpoints and over 1,000 unique currency trading pairs. IBM has also signed 6 banks to issue stablecoins based on XLM.

There are many other partnerships Stellar has created, including several with money transfer providers, such as Tempo in France, Remitr in the Americas, SatoshiPay in Europe, SureRemit in Africa and many others.

XLM Token (Stellar Lumens)

Lumens, which use the ticker symbol XLM, are the native asset used on the Stellar network. The network launched with 100 billion Lumens, with an annual inflation rate of 1%. In September 2020 there are now 105,323,320,393 XLM. The Lumens serves two purposes on the Stellar network:

  • It prevents network spamming by covering the cost of transactions (fees), while also ensuring users maintain a minimum balance. The minimum balance requirement was initiated to keep the network from being spammed with fake transactions. Each transaction on the Stellar network has a fee of 0.00001 XLM.
  • It also facilitates multi-currency transactions by acting as a bridge between various currencies and allowing trades to occur even if the direct market isn’t large enough to facilitate trades.

Although Lumens were trading well back in 2020 after they were listed, it remained pretty range-bound for three years after that. XLM traded between $0.001 and $0.006. It was only when the 2020 bull run came around did Lumens pick up steam.

XLM Price Performance. Image via CMC

April saw price begin to move higher, and by the end of the month, it was above $0.005. May saw price explode, and XLM traded as high as $0.067443, but for the most part, it remained between $0.04 and $0.05 throughout May and June.

Price dipped again to the $0.02 area and remained there until the broad based cryptocurrency rally that began in November 2020. Price rose rapidly through November and December 2020 and XLM hit an all-time high of $0.938114 on January 4, 2020.

It traded steadily lower from that high, bouncing briefly in April 2020, but remaining between $0.2 and $0.3 for most of 2020. In November 2020 it broke below $0.2 and in January 2020 it broke below $0.1.

Trading & Storing XLM

XLM is traded on hundreds of different exchanges. These include some well known ones such as Coinbase Pro and Binance. There are also a host of other local fiat gateway exchanges that you can use in specific regions.

When it comes to trading volume, over 50% appears to be concentrated in three different exchanges (BCEX, LAToken and BitForex). This means that liquidity for XLM is quite contingent on the orders flowing through these exchanges.

Having said that, on the individual order books there appears to be pretty strong liquidity. For example, on Binance’s XLM / BTC market the order books are quire deep and the turnover is extensive. Hence, you would be able to securely place large block orders without that much slippage.

Register at Binance and Buy XLM Tokens

Once you have your Lumens, you will probably want to store them in an offline wallet. We are all well too aware of the risks that come with leaving cryptocurrency on a centralised exchange.

When it comes to storage, there are a plethora of wallets that support XLM. I won’t go into them here but if you want the complete list then you can read our overview of the top Stellar XLM Wallets.

Stellar Lumens Distribution Plans

Stellar has a unique plan for distributing Lumens. Because the mission of the Stellar Development Foundation is to promote global financial access, literacy, and inclusion it has an ambitious goal of distributing 95% of all Lumens to the world.

The Foundation has held 5% of the initial 100 billion XLM in reserve to fund its operations, and the auction them off in small batches to various exchanges. The other 95% are meant to be distributed as follows:

  • 50% will be given to individuals. Initially, this was done through a unique sign up link, but the Foundation has put this program on hold. That said, there are other programs being used to airdrop XLM to individuals. The most recent was announced in September 2020 and will distribute 2 billion XLM to users of the messaging service Keybase.
  • 25% have been earmarked for partners who contribute to the adoption and growth of the Stellar network. This includes businesses, non-profits, institutions and government agencies.
  • 20% were given to BTC and XRP holders back in October 2020 and August 2020. The distribution saw 19% going to BTC holders and 1% to Ripple holders.

Stellar Development

There is no doubt that Stellar has been quite active and they regularly update their community about the latest work that the project is involved in.

But how is raw development output on the project going?

One of the best ways to determine this is to take a look at their code commits in their public code repositories. Hence, I decided to dive into Stellar’s GitHub and observe their coding activity.

Below are the code commits for the top three pinned repositories over the past 12 months.

Commit History in Top Three Repos. Image via GitHub

As you can see from the above, there has been quite extensive work done on the protocol. I should also mention that this is only three out of a further 73 other repositories.

This is more than I have seen on other projects of a similar size. In fact, if we were to check into code tracking websites, Stellar ranks 36 for total commits and 23 for overall activity.

This frenetic pace of development makes sense when viewed in conjunction with the milestones that they met in their development roadmap. There were a number of important protocol releases that took place over the last year.

Moreover, looking forward there is quite a lot to be excited about on the project. In their comprehensive roadmap, they break down the work being done on the core protocol, the platform, product and broader ecosystem.

If you want to keep up to date with the latest development releases then you can always follow their developer blog. They do quite a good job of keeping their community updated.


Stellar obviously has plenty of opportunities coming in the months and years ahead, but it will also face challenges of course. One of those challenges will be overcoming competition in its chosen space, not only from Ripple, but also from other platforms such as OmiseGo.

Regarding its aspirations to being an ICO platform, there’s even more challenges. Not only is it up against Ethereum, but it is also now up against new alternatives for crowdfunding such as the Binance Launchpad. And with projects shying away from the ICO model due to regulatory uncertainty, it could be a struggle to gain traction in this area.

Also of concern to some is the altruistic philosophy that Stellar is based on. Because it is backed by a non-profit and has global financial inclusion as its goal, there’s little focus on maximizing profits. While this is to be commended as a humanitarian goal, it isn’t a popular stance for businesses who might partner with Stellar. That could hold the XLM token from making its best gains.

There’s no doubt that Stellar is an interesting project, and that it is popular as well. Even though it is ranked twelfth by market cap as I’m writing this, it has been in the top ten several times.

It faces tough competition, but it is a tough competitor itself, with a wide range of use cases, and an impressive feature set. The partnership with IBM is especially noteworthy, and could help boost the fortunes of Stellar.

You should make your own assessment of the Stellar project before making an XLM purchase, but it is pretty obvious the market likes this project, and it has what looks like a bright future.

Featured Image via Fotolia

  • Posted in: Blockchain, Review
  • Tagged in: Jed McCaleb, Ripple, Stellar Lumens, Stellar Network, XLM, XRP

Posted by Steve Walters

Steve has been writing for the financial markets for the past 7 years and during that time has developed a growing passion for cryptocurrencies.

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