Stellar (XLM) launched in 2014, founded by Jed McCaleb - who had previously co-founded Ripple and, before that, ran the ill-fated Mt. Gox exchange - alongside Joyce Kim. The nonprofit Stellar Development Foundation has steered the network's growth ever since, with a mission centred on cheap, fast cross-border payments and financial inclusion in underbanked markets.
How Stellar works
Instead of mining or conventional staking, Stellar runs on the Stellar Consensus Protocol, a federated Byzantine agreement model where validators organise into overlapping "quorum slices" that reach agreement without needing every participant to trust every other one. The result is settlement in roughly five seconds at a fraction of a cent per transaction - well suited to remittances, stablecoin transfers, and asset tokenisation rather than complex smart contract activity.
Stellar's most tangible real-world traction has come through stablecoins: Circle issues USDC natively on Stellar, and the network has hosted various tokenisation and payment pilots, including past work with IBM's World Wire and a long-running, though troubled, partnership with MoneyGram that aimed to bridge crypto rails with cash payout networks.
Risks worth knowing
Stellar's biggest structural quirk is validator centralisation: the Stellar Development Foundation has historically run a large share of top-tier validators itself, which cuts against the decentralisation ideal even though the network functions well technically. Supply management has also been unusual - the Foundation burned 55 billion XLM from its own holdings in November 2019, more than half the total supply at the time, after concluding its original giveaway and grant programmes weren't achieving their goals. And despite years of headline partnerships, converting pilot programmes into large-scale, sustained transaction volume has proven slower than early marketing suggested, with Stellar competing against both traditional payment rails and other blockchain payment networks, XRP chief among them given the shared lineage.
Stellar remains a credible, fast, low-cost settlement layer with genuine stablecoin traction, but its promise still rests more on future adoption than on transaction volumes matching its ambitions today.