Stellar Crypto: Is XLM Better Than Ripple XRP?

What is Stellar (XLM)?

Little robot waiting for you to open the door to Stellar XLM.
Created by Kornelija Poderskytė from DailyCoin

Stellar Crypto is something of a fringe player in the blockchain industry. Since the birth of the Stellar Network, XLM has maintained a solid position amongst the top 30 digital assets in the crypto market but arguably hasn’t enjoyed the fanfare and respect it deserves.

Stellar embodies everything that cryptocurrency set out it be. Unlike its older brother from Ripple Labs, Stellar is an open-source payment system built for everyday people, not financial institutions. Unlike legacy networks like Bitcoin (BTC), Stellar is fast and affordable, making it an excellent remittance payment network.

Despite this, Stellar still trails behind its altcoin rivals in the crypto asset standings. This article will explore the ins and outs of Stellar’s crypto ecosystem and its potential.

What Is Stellar (XLM)?

Stellar crypto logo.
Source: Stellar

Stellar (XLM), often called Stellar Lumens, is a decentralized, peer-to-peer payment network established in 2014 by the Stellar Development Foundation. Officially launched in 2015, Stellar’s noble goal is to bridge the world’s financial systems, creating a seamless protocol for everyone, regardless of their social status or position.

At its core, Stellar aims to facilitate the fast, secure, cost-effective movement of financial resources. It connects individuals, banks, and payment processors, enabling the creation, sending, and trading of various types of cryptocurrencies, including stablecoins like USDT and USDC

The backbone of this network is the Stellar Lumen token, the network’s native digital currency. Lumens, or XLM, are the lifeblood of the ecosystem that power network operations and pay transaction fees.

Stellar’s target audience primarily consists of residents of developing countries, providing them access to the global economy through quick, simple, and inexpensive transactions. People worldwide can use the Stellar Network to transfer fiat currencies and execute cross-border payments without the hassle of middlemen and expensive intermediaries.

How Does Stellar Crypto Work?

Now that we’ve better understood what Stellar is let’s dive into the nitty-gritty details of how it works. Stellar is a network of servers on the blockchain, with each server running independently. This means that each node is interconnected but not monitored by any central source. 

The Stellar Consensus Protocol (SCP) is Stellar’s algorithm that verifies transactions. It enables the network to scale quickly and more efficiently than most proof-of-work blockchains, such as Bitcoin. The network is also theoretically more decentralized as it uses an interesting feature known as “Anchors.”

Anchors are trusted entities that can be in charge of people’s deposits and issue credits into the blockchain. They function as the bridge between different digital assets and the Stellar blockchain. While these anchors help streamline the transfer process, they arguably threaten decentralization because it means that users need to rely on these trusted entities.

This unique mechanism means any digitized asset or currency, from traditional currencies to tokens representing new and existing assets (dollars, euros, bitcoin, stocks, and gold), can be transferred using the Stellar Network. These assets can then be traded between users with less friction using Lumens.

What Are Stellar Lumens?

Stellar Lumens, often referred to as Lumens or XLM, are the native digital currency of the Stellar network. They serve two primary purposes: acting as an intermediate currency for operations and being used to pay transaction fees.

When a transaction is initiated on the Stellar network, the protocol converts the money into XLM in seconds and then into the requested currency. This swift conversion process enables Stellar to facilitate cross-border transactions so quickly.

Additionally, Lumens play a crucial role in securing the Stellar network. Lumens protect the network against flood attacks by making microtransactions too expensive for hackers with no chance of profit, effectively safeguarding the Stellar Network from serious threats.

Soroban: Smart Contracts and DeFi on the Stellar Network

Not to be outdone by modern Layer-1 blockchains like Ethereum (ETH) or Cardano (ADA),  Stellar has made its foray into the world of DeFi and smart contracts with Soroban, a developer-friendly, Rust-based smart contracts platform. Designed for scale and sensibility, Soroban is currently in its testnet, known as Futurenet, and will integrate with the existing Stellar blockchain when it’s ready.

Soroban offers a “batteries-included” developer experience, equipped with tools such as plug-and-play SDKs, Soroban CLI, RPC server, and a local sandbox. This user-friendly environment allows developers to get up and running quickly, building with flexible, reusable functions and ready-to-use contracts.

Designed with scalability in mind, Soroban claims to harness multi-core scaling and an optimized fee model to boost performance. It also addresses the issue of state bloat, a common problem in many zero-transaction blockchains.

The Stellar Development Foundation (SDF) has also launched the $100M Soroban Adoption Fund to attract developers and incentivize crypto projects to build on Soroban. This fund is an umbrella for many programs that support all levels of Soroban adoption, opening doors for developers to become pioneers of the Soroban ecosystem.

Stellar Crypto History

Stellar’s crypto journey began in 2014 when the Stellar Development Foundation, a non-profit organization, created it. The network was officially launched in 2015 to connect the world’s financial systems and create a seamless payment network for everyone, not just banks and financial institutions.

The Stellar network was conceived by Jed McCaleb, whose name you might recognize from other classic crypto projects, like Ripple XRP and the Mt Gox Bitcoin exchange. After disagreements with his Ripple co-founders, McCaleb left the project in 2013 to create Stellar.

Over the years, Stellar has evolved and adapted to the changing landscape of the cryptocurrency world. It has secured strategic partnerships with top real-world businesses like IBM and Deloitte, solidifying its reputation amongst traditional businesses. Stellar’s biggest adjustment is undoubtedly the unveiling of the Soroban smart contract platform, which will be the Stellar Network stay relevant in a crowded and competitive field. 

Stellar Network vs. Ripple XRP

XLM vs XRP graphic.
Source: Blockzeit

Stellar and Ripple, XLM, and XRP share more than a similar-sounding ticker. Both networks aim to improve cross-border transactions and facilitate fast and affordable payments and were partially conceived by Jed McCaleb, who co-founded both platforms. However, each network approaches this goal from different angles and caters to different audiences.

With its digital currency XRP and the XRP Ledger, Ripple primarily supports financial institutions and banks, offering them a fast and low-cost method for cross-border transactions. Ripple’s top-down approach focuses on partnerships with major financial services to facilitate large-scale transactions.

On the other hand, with its Lumens (XLM), Stellar is a bit more grassroots. It targets individuals, particularly those in developing countries, providing them access to the global economy through quick, simple, and inexpensive transactions. Stellar is more focused on assisting individuals in transferring money than they are with institutions.

Performance metrics between the two networks are almost identical, with both blockchains processing around 1,000 TPS (transactions per second) with fees coming in at less than a penny. 

One of the most significant differences separating Stellar and Ripple is the development of Soroban. In the modern age of blockchain technology, supporting smart contracts and building a thriving ecosystem is vital to staying relevant in a fierce battlefield of competition

If all goes well, Soroban could signal a new wave of adoption for the Stellar network, with popular dApps like decentralized exchanges and NFT functionality encouraging new users to explore the chain.

Stellar Crypto Pros and Cons

Is Stellar really all it’s cracked up to be? Let’s review the network’s benefits and drawbacks.


  • Fast, Low-Cost Transactions – Stellar’s network is designed to process transactions swiftly, often in just a few seconds, with minimal fees.
  • Decentralization – Stellar operates on a decentralized network, which means any single entity does not control it. This decentralization enhances the security and transparency of the network.
  • Cross-Currency Transactions – Stellar’s network supports multi-currency transactions. This feature is particularly beneficial for transactions involving currencies without widely traded pairs.
  • Smart Contracts and DeFi – With the introduction of Soroban, Stellar has entered the world of decentralized finance (DeFi) and smart contracts. 
  • Scalable – Stellar’s network is designed to handle a high volume of transactions, making it a possible solution for global financial transactions.


  • Competitive Field – Stellar operates in a highly competitive market, with plenty of crypto projects also targeting cross-border transactions. 
  • Anchor Reliance – Stellar’s system relies heavily on anchors, trusted entities that issue credits into the blockchain. These anchors are a decentralization threat and could disrupt the network if they act maliciously.
  • Adoption Challenges – While Stellar has a compelling vision, it has struggled to achieve many regular users.

On the Flipside

  • While the Stellar crypto network is excellent on paper, it’s struggled to attract users and is outclassed in many respects by newer Layer-1 blockchains that already have thriving ecosystems. 

Why This Matters

With XRP gathering attention in the wake of its legal battle with the SEC, the cross-border payment system niche of the crypto market is attracting new eyeballs. 


What is the circulating supply of XLM?

According to CoinMarketCap, XLM has a circulating supply of approximately 27 billion tokens. This represents roughly 54% of its total supply.

Where can I buy XLM?

You can buy XLM on top crypto exchanges like Coinbase and Binance.

What is the all-time high XLM price?

Stellar’s price recorded its all-time high of $0.93 USD on the 4th of January, 2018.

Can XLM reach $100?

If XLM reached $100 US Dollars, it would have a market capitalization of over 2T USD. To put that in perspective, that’s 3x larger than the market cap of Bitcoin.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Finn Miller

Finn Miller is a New Zealand-based blockchain writer for DailyCoin who specializes in simplifying complex blockchain topics. He is experienced in crafting whitepapers, researching on-chain data, and advising emerging crypto projects, and uses his unconventional approach to learning and passion for knowledge to provide cornerstone educational content for readers of all levels. When not exploring the depths of DeFi, Finn can be found exploring his other passion, the great outdoors.