Deep Dive
1. Purpose and use
Stellar is an open network for sending payments and issuing or exchanging digital assets. For example, a sender could pay in one currency while a recipient receives another, if suitable assets and liquidity are available on the network. Stellar launched in 2014 with a focus on accessible financial services and global payments. (CoinMarketCap)
2. How the network works
Stellar nodes use the Stellar Consensus Protocol, a method for agreeing on valid transactions without proof of work mining or proof of stake. Transactions are recorded on a shared ledger. The network also has built in tools for issuing assets and exchanging them.
3. XLM and added functionality
XLM, also called lumens, is Stellar’s native asset. It is used to pay transaction fees and can serve as an intermediate asset when converting between currencies. Stellar also supports Soroban, its smart contract platform, which enables developers to create applications such as financial services. Smart contracts are programs that run on a blockchain; Soroban went live on Stellar in 2024. (Stellar)
Conclusion
Stellar is a payments and digital asset network; XLM helps operate it, while its ledger and smart contract tools support broader financial applications. How well can Stellar make payments and asset exchanges simpler for people and businesses?
