What is Stellar (XLM)?

Deep Dive

1. Purpose & Value Proposition

Stellar’s primary mission is to make moving value—whether fiat currencies, digital assets, or tokenized securities—as seamless as sending an email. Launched in 2014, the network is built to serve financial institutions, payment providers, and individuals, particularly targeting underserved regions where traditional banking is costly or inaccessible (CoinMarketCap). Its value proposition lies in providing a public, compliant infrastructure that prioritizes low cost and speed to “connect the world's financial systems.”

2. Technology & Architecture

Stellar operates on the Stellar Consensus Protocol (SCP), a unique “Proof-of-Agreement” model. Unlike Proof-of-Work (Bitcoin) or Proof-of-Stake (Ethereum), SCP secures the network through a federated system of trusted, identifiable validators. This design enables transaction finality in 3–5 seconds with fees costing a fraction of a cent, without the energy consumption of mining (CoinMarketCap). In 2024, Stellar launched Soroban, a smart contract platform built for financial applications, extending its capabilities to decentralized finance (DeFi) and complex dApps.

3. Ecosystem Fundamentals

A core feature is the built-in decentralized exchange (DEX), which allows users to trade any asset issued on the network directly on the ledger. Stellar has become a leading platform for real-world asset (RWA) tokenization, attracting institutions like Franklin Templeton and WisdomTree. As of early 2026, over $1 billion in RWAs were live on-chain, including tokenized U.S. Treasuries and stablecoins, demonstrating its use as a production-grade settlement layer (X Finance Bull).

Conclusion

Stellar is fundamentally a public utility for value exchange, evolving from a cross-border payments rail into a foundational layer for tokenized finance. As institutional adoption grows, how will its role as a bridge between traditional and decentralized finance redefine global settlement?