Stellar Lumens

Stellar (ticker: XLM), previously known as ‘Stellar Lumens’, is a promising blockchain protocol which currently counts itself among the top 10 performing cryptocurrencies by market cap (Jan 2019). Founded in 2014 by Jed McCaleb, formerly a founder of Mt. Gox and co-founder of Ripple, and Joyce Kim, Stellar was released as a decentralised payment network and protocol.

Participants & Network Structure

Like many other blockchain projects, to stay true to the values of decentralisation, is governed as a non-stock, nonprofit organisation – named “The Stellar Development Foundation” (herein the ‘SDF’). Collaborating with Patrick Collison, CEO of Stripe Payments – the large e-payment incumbent, the foundation launched in July 2014. The Stellar Development Foundation received $3 million in funding from Stripe, in exchange for 2 billion XLM. To date, Stellar have been transparent with their funding sources and use of funds.

The Stellar Network is the underlying technology which powers financial transactions on the protocol. The Stellar Network is a distributed, open-source project with freely available code for community members and developers to use.

For development purposes, there are two key components which contribute to what the SDF call the Stellar Network ‘Big-Picture’. The Network Backbone, named Stellar Core, validates and agrees all transactions on the Core; through the Stellar Consensus Protocol. Users can install and host their own Stellar Core, which allows them to submit transactions without depending upon third parties. For most, connecting to Stellar Core is facilitated through ‘Horizon’ – a RESTful HTTP API server. Horizon allows users to easily check their accounts and submit transactions. As it’s HTTP, it allows users to access Horizon via their web browser.

Programming Languages

The SDF’s website,, states that developers can build ‘just about anything [Sic] you can dream up involving payments’, including banking tools, mobile wallets, smart devices and more. To encourage the maximum amount of developers to their protocol, supports software development kits (SDKs) in JavaScript, Java and Go-based programming languages; with the community maintaining SDKs for Ruby, Python and C# languages.

Stellar Use Cases

With over 3 million registered users, the Stellar network is growing fast. Central to Stellar’s vision is the creation of a common financial platform, designed to be open and accessible to all. To this end, the SDF allocated 50% of their initial Lumens distribution to their ‘Direct-sign up Program’. In what some saw as a controversial move, the SDF planned to give away around 50 billion Lumens free to communities in developing countries to design and build their own financial services. However the reasoning behind such a move was increased reach, a wider user base, and building an inclusive digital economy. lists the use cases and value propositions of the Stellar Network as real time settlements within 2-5 seconds, cryptographically secure transactions, micro-payment efficiency with a £0.01 fee for around 600k transactions, automatic currency exchange, and regulatory compliance.

The XLM Native Coin 

Native to the Stellar network and protocol – and central to it’s function – is the ‘Lumen’ coin, commonly referred to by it’s ticker XLM. At launch, there were 100 billion tokens, with around 25% given to non-profits working towards financial inclusion.

Stellar Statistics

A quick look at some key Stellar Network stats:

  • Network Protocol Version – Currently running in it’s 10th iteration
  • Total Lumens – >104.6 Billion XLM
  • Lumens Distributed – > 8.6 Billion XLM
  • Lumens Available – > 19.1 Billion XLM
  • Featured Network Nodes – 39 Network Node Validators


So far Stellar have certainly lived up to their name, securing some ‘stellar’ partnerships; including big four professional services incumbent Deloitte, leading African fintech provider Parkway Projects, and the French financial company Tempo Money Transfer.

Deloitte integrated Stellar Network technology for micro-payments, offering incremental payment options to customers and decreasing the costs of small payments. A ‘core banking solution’, Deloitte have built a prototype application which reduced transaction costs for micro-payments by 40%. The prototype, which resolved transactions in just 5 seconds, is intended for Deloitte’s banking clients outside North America.

Tempo Money Transfer service have begun using Stellar for international remittances. Using the Stellar Network allows Tempo to offer competitive prices with higher margins, with Stellar powering over 600,000 transactions for just 1 cent in fees.

Finally, Parkway Projects have integrated Stellar technology to offer interoperability between mobile money platforms, so far connecting 5 major telecommunications operators in Nigeria, and enabling customers of different mobile money networks to send payments to each other.


Whilst Stellar is currently one of the leading blockchain protocol in international money transfers, offering cheaper and faster remittance than traditional services such as Western Union, there are a number of things to consider before investing in XLM.

Existing traditional financial companies and banks may implement their own lightweight and low fee blockchain solutions in-house for international remittance and settlements. Although Stellar may have the leading edge technologically, traditional banking providers have many more existing users who would already be poised to use their offering.

Likewise, Jed McCaleb’s previous co-founded venture, Ripple (ticker XRP), are currently building a very similar cross-border payment system, aimed at overthrowing the slow, inefficient and high-cost existing system. The key difference between Ripple and Stellar is target users. Whilst Stellar targets average people and those in developing nations, Ripple are implementing their cross-border solutions with traditional banking establishments such as Santander. Returning to the previous point, it may be that through traditional banks, Ripple are able to capture a greater user base for their cross-border payment solutions, and corner the market for larger, institutional transactions.

Currently, there’s no doubt that Stellar is one of the most promising projects in blockchain with a strong development community and business use case. True to it’s name, Stellar may grow to become one of the biggest stars of the cryptocurrency industry – only time will tell.

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