What is Stellar (XLM)?

Deep Dive

1. Purpose & Value Proposition

Stellar aims to solve inefficiencies in global financial systems, particularly cross-border payments and remittances. Its network enables near-instant transfers at minimal cost (fractions of a cent) and supports tokenized real-world assets (RWAs) like stablecoins, commodities, and securities. Institutions like Visa, MoneyGram, and Franklin Templeton use Stellar for compliant asset issuance and settlement.

2. Technology & Architecture

Stellar uses the Stellar Consensus Protocol (SCP), a unique system where validators are identified entities (banks, businesses) that cooperate to validate transactions. This avoids energy-intensive mining and enables 3-5 second finality. In 2024, Stellar added Soroban, a Rust-based smart contract platform optimized for financial applications, balancing security and efficiency.

3. Ecosystem Fundamentals

• Real-World Asset (RWA) Hub: Hosts $1B+ in tokenized assets, including Franklin Templeton’s $BENJI fund.
• Stablecoin Integration: Supports PayPal’s PYUSD, Circle’s USDC, and others.
• Global Access: Partners with 475,000+ cash on/off-ramps (e.g., MoneyGram) for users without bank accounts.

Conclusion

Stellar is a bridge between traditional finance and blockchain, prioritizing speed, affordability, and regulatory compliance. Its focus on real-world utility—from remittances to tokenized assets—positions it as infrastructure for institutional adoption. How might Stellar’s emphasis on compliance shape its role in decentralized finance’s evolution?