Stellar is a platform that connects banks, payments systems, and people. Launched in 2014, Stellar uses blockchain technology to allow for quick currency exchange and money transfer. Stellar was originally based on Ripple Lab’s protocol, but due to key philosophical differences Stellar eventually rewrote the code entirely. It uses the Stellar Consensus Protocol and is designed to support any type of currency such as the US dollar, RMB or Yen. Stellar platform’s native currency is the lumen (XLM).
Updated October 22, 2026: Stellar is the network; XLM is its native asset, used for fees and account reserves. Issued currencies on Stellar are separate assets with their own issuers and risks. Since this guide was first published, Stellar has ended protocol inflation, reduced the lumen supply, and launched general-purpose smart contracts through Soroban.
Stellar Lumens (XLM) can be traded on Binance Exchange.
Features and Specifications
- Transaction speed: 3-5 second confirmation time
- Original supply: 100 billion XLM; approximately 50 billion remain after the 2019 supply reduction
- Capacity depends on operation type and validator-set network limits
- Uses Stellar Consensus Protocol (SCP) rather than Proof of Work
- Simple, clean API
- Multisig and smart contracts
- Decentralized distributed database
- No ongoing protocol inflation since October 2019
How fast is Stellar?
Stellar settles transactions in seconds, but wallet processing and cash deposits or withdrawals can take longer. There is no fixed dollar-denominated transaction fee: the cost depends on XLM’s price, operation count and network demand.
For ordinary, non-smart-contract transactions, the network minimum is 100 stroops (0.00001 XLM) per operation, checked October 22, 2026. Surge pricing can raise the inclusion fee. Soroban transactions also pay resource fees, so the basic payment fee is not a universal smart-contract price. See the official fee documentation.
How Does Stellar Lumens work?
Decentralized network
A decentralized network consists of peers that can run independently of each other. This means that the Stellar network does not depend on any single entity. The idea is to have as many independent servers participate in the Stellar network as possible, so that the network will still run successfully even if some servers fail.
Ledger
Like a traditional ledger, the Stellar ledger records a list of all the balances and transactions belonging to every single account on the network. A complete copy of the global Stellar ledger is hosted on each server that runs the Stellar software. Any entity can run a Stellar server.
These servers form a decentralized Stellar network, allowing the ledger to be distributed as widely as possible. The servers sync and validate the ledger by a mechanism known as consensus.
Consensus
Stellar uses the Stellar Consensus Protocol (SCP) rather than Proof of Work. The Stellar Consensus Protocol (SCP) is a protocol that achieves optimal safety against ill-behaved participants. Basically, it aims to be more secure and offer better protection against malicious parties.
The Stellar servers communicate and sync with each other to ensure that transactions are valid and get applied successfully to the global ledger.
For example, a payment must satisfy ledger rules, including the sender’s available balance and authorization. Validators use configured trusted sets and thresholds to agree on the next ledger. This is federated Byzantine agreement, rather than a simple majority vote of every server on the network. The SCP documentation explains how quorum slices fit together.
Consensus normally completes in seconds; safe quorum configuration matters because nodes can stop making progress if sufficient trusted validators are unavailable.
Anchors, trust, and credit
Anchors are simply entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. They act as a bridge between different currencies and the Stellar network. Issued assets can represent claims on an issuer, but not every token is a redeemable bank deposit. Check the issuer and redemption terms rather than assuming every asset is cash-backed.
Anchors do two simple things:
- They take your deposit and issue the corresponding credit to your account address on the Stellar ledger. You can make a withdrawal by bringing them credit they issued.
- You have to trust the anchor to honor your deposits and withdrawals of credit it has issued.
Anchors exist in the pre-stellar world now. For example, to use Paypal, you deposit money in from your bank account. Paypal then gives you credit in your Paypal account. You can now send that Paypal credit to anyone that trusts Paypal (anyone with a Paypal account). Someone that received your Paypal credit can convert it to real money using Paypal by withdrawing it to the bank.
Anchors perform the same function in Stellar. The difference is, all the “Paypals” and other anchors are operating on the same network so they can all transact with each other now – this makes the system way more powerful. People can now easily send and exchange all these different anchor credits with each other.
Distributed Exchange
The Stellar ledger is able to store offers that people have made to buy or sell currencies. Offers are public commitments to exchange one type of credit for another at a pre-determined rate. The ledger becomes a global marketplace for offers.
All these offers form what is called an orderbook. There is an orderbook for each currency/issuer pair. So if you are wanting to exchange Virgin Bank/EUR for bitstamp/BTC you look at that particular order book in the ledger to see what people are buying and selling it for.
This allows people to not only buy and sell currencies in a foreign exchange like manner but also to convert currencies seamlessly during transactions.
Stellar Lumens Partnerships
Historical context (2017–2019): Stellar aimed to improve access to financial services. In 2017, IBM announced a partnership with Stellar protocol to develop a cross-border blockchain-based payment system for large banks. The goal was to improve cross-border payment efficiency, including in Southeast Asia where remittance costs matter and many domestic helpers cannot afford to send money back home. Stellar’s March 2019 announcement cited reach across 47 currencies and 72 countries; those historical figures are not a verified description of an active service in 2026. Do not use this old announcement as evidence of current availability.
Stellar Lumens (XLM) Currency
Lumens is the name given to the token of the Stellar network. They were originally called stellars back when the Stellar network launched in 2014, but with the launch of the upgraded network in 2015, the name of the token changed from stellar to lumen.
The Stellar network’s built-in currency, the lumen, serves two purposes:
-
Acts as a small anti-spam role
- Each ordinary operation has a minimum inclusion fee of 0.00001 XLM, with higher fees possible under congestion. This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack). This cost helps mitigate DoS attacks that attempt to generate large numbers of transactions or consume large amounts of space in the ledger.
- Similarly, the Stellar network requires all accounts to hold a basic minimum balance of 1 XLM (two base reserves of 0.5 XLM). This discourages ledger spam; it does not verify an account holder’s identity. Additional ledger entries can increase the required reserve, and sponsorship can change who provides it.
-
May facilitate multi-currency transactions
- XLM sometimes facilitate trades between pairs of currencies between which there is not a large direct market, acting as a bridge. This function is possible when there is a liquid market between the lumen and each currency involved.
Stellar Lumen token metrics
Historical allocation plan: At the genesis of the Stellar Network, 100 billion lumens (XLM) were created as specified in the protocol. As part of its custodial mandate, the Stellar Development Foundation (SDF) was originally tasked with distributing 95 billion lumens under the following plan. This is not today’s allocation breakdown.
- 50% to be given in small increments to as many people as possible.
- 25% to be given to other businesses and non-profits to reach people that stellar.org wouldn’t otherwise be able to reach through the Direct Signup program.
- 20% to be given to bitcoin and XRP holders
- 5% to be retained by Stellar.org for operations.
Stellar originally had a fixed inflation mechanism that increased supply by 1% annually and an inflation pool that included network fees. Validators ended inflation on October 28, 2019. In November 2019, SDF burned approximately 55.44 billion XLM, leaving roughly 50 billion in total supply. Total supply and circulating supply are different: SDF distributions can increase circulation without creating new XLM. See the official lumen accounting guide for definitions and live-data links.
Under the former inflation system, holders could direct weekly distributions through inflation votes. That mechanism is historical and no longer pays holders. Network fees now accumulate in a non-circulating fee pool; they are not validator rewards.
How to mine Stellar (XLM)
One question that is frequently asked is how to mine Stellar (XLM). Stellar cannot be mined in a process similar to Bitcoin because it doesn’t use Proof-of-Work. Instead, validators agree on ledgers through SCP. Stellar pays no protocol mining, staking or validator rewards. Any third-party product advertising XLM yield has separate terms and risks; it is not native Stellar staking. You can buy or sell Stellar (XLM) on the Binance Exchange.
What Soroban adds to Stellar
Stellar already had built-in payment and exchange operations. Soroban adds general-purpose smart contracts, allowing developers to build applications with custom logic. SDF announced Soroban’s mainnet availability on March 19, 2024. Using a contract introduces code and application risks beyond making a simple XLM transfer.
Boxmining’s Take
Stellar’s useful distinction is the combination of payments, issued assets and exchange functions on one network. Cheap settlement alone does not make an end-to-end remittance cheap: an anchor or exchange can add spreads, withdrawal charges and verification delays. Judge the whole route, including who will redeem the asset at the other end. Network adoption also does not guarantee a higher XLM price.
FAQ
Is Stellar the same as XLM?
Stellar is the blockchain network. A lumen, traded as XLM, is its native currency. A dollar-denominated asset issued on Stellar is a separate token; holding XLM does not give you a claim on that issuer’s dollars.
Do I need 20 XLM to open a Stellar account?
No. The basic network minimum is 1 XLM at the current 0.5-XLM base reserve, checked October 22, 2026. Trustlines and other entries can require additional reserves. A custodial service may set its own minimum. See Stellar’s account-creation guide.
Can I mine or stake XLM for network rewards?
No. XLM is not mined, and Stellar does not pay native staking rewards. The former 1% inflation mechanism ended in 2019. Treat offers promising guaranteed XLM rewards with caution.
What should I check before sending XLM?
Confirm the receiving service supports the Stellar network, verify the destination, and follow any memo instructions it provides. Test a small amount before transferring a larger balance. Protect your wallet’s secret key: anyone with it can authorize transactions. Read our private key guide and stablecoin risk explainer before using issued currencies or a new wallet.
Resources:
Stellar website https://www.stellar.org/
SCP whitepaper https://www.stellar.org/papers/stellar-consensus-protocol.pdf
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