Stellar is an open-source blockchain-powered network created to make it easy for people to send, receive, and trade digital currencies. It was launched in 2014 under the nonprofit organization Stellar Development Foundation spearheaded by Jeb McCaleb and Joyce Kim.
Stellar was designed with the sole aim of bringing the global financial system under one network and easing cross-border transactions. Just like other platforms powered by the revolutionary blockchain technology, it seeks to do away with middlemen and third parties when it comes to financial transactions.
Here’s a closer look at this week’s token.
About Stellar Lumens
Lumen (XLM) is the native token that powers the blockchain-powered Stellar network. The cryptocurrency acts as a medium of exchange on the platform. Consequently, all fees on the network are settled in XLM coins.
In addition, XLM is used to provide liquidity on the stellar network. By providing liquidity, it makes it easy to transfer money to various addresses where remittances and bank loans are not readily available.
The stellar network comes with an in-built protocol that enables the transfers in the form of Lumens. For instance, whenever one wishes to send some US dollars to a recipient in Mexico, the network will convert the payments to Lumens which are then transferred through the network.
The recipient will end up receiving payments in pesos. The entire transaction is completed within seconds, making it easy for people to send and receive money regardless of location, worldwide.
The network seeks to replace traditional money transfer systems that take days to process cross-border payments. The reduction of costs for cross-border payments on the network has continued to strengthen its edge as a preferred mode for payment for users in developing countries. The token and its network are relatively popular in Nigeria, South Africa, India, the Philippines and Ukraine.
Stellar.org has received significant donations from high-profile companies and organizations such as Google, BlackRock, and Fast Forward to offer financial services to the unbanked population worldwide. Consequently, the company is able to cover its operating costs through such donations.
Unlike Bitcoin and other cryptocurrencies, Lumens cannot be mined. At inception, the Stellar Development Foundation released 100 billion XLM. In October of 2019, the Stellar community voted against increasing the supply of XLM coins by 1% annually.
IInstead, the community voted on capping the supply of XLM coins at 50 billion lumens. As of mid-2021, there were about 20 billion XLM coins held by users on the network around the world.
|Token||Stellar Lumen XLM|
|Total supply||50,001,802,586 XLM|
|Circulating supply||24,286,099,774 XLM|
The remaining 30 billion coins are held by the foundation and usually used to develop and promote the Stellar network. It is expected that the tokens will eventually enter the market for users to purchase.
Stellar Lumen is one of the largest cryptocurrencies with a market cap of about $8 billion. While the coin has more than doubled in value year-to-date after a 126% plus rally it has lost a significant amount of value from all-time highs.
XLM has lost more than 50% in market value from all-time highs of $0.79 a coin registered in May.
Earlier this year, the Stellar team announced a partnership with the Ministry of Digital Transformation of Ukraine to enhance the country’s digital infrastructure.