What is Stellar (XLM)?

Stellar is a blockchain built for fast, cheap payments and for issuing tokens such as dollar stablecoins. Its coin is the lumen, written XLM. Payments settle in about five seconds and usually cost a fraction of a cent.

Where it came from

Stellar started in 2014. One of its founders was a co-founder of Ripple, the company behind XRP. A non-profit, the Stellar Development Foundation, supports the network and holds lumens to fund that work.

How it works

Stellar does not use mining or staking. Its validators agree on each set of transactions using the Stellar Consensus Protocol. Each validator chooses which other validators it trusts. The XRP guide describes a similar approach.

Companies can issue tokens on Stellar, including stablecoins such as USDC (Lesson 10). Lumens pay the network's fees.

Every account must hold a small minimum balance: 1 XLM, plus 0.5 XLM for each extra item such as a token it holds.

Supply

• All lumens were created at launch. None are mined.
• The network used to add about 1% a year. Validators voted to end that on 28 October 2019.
• On 4 November 2019, the foundation burned 55 billion XLM, cutting the supply from about 105 billion to about 50 billion.
• Fees go into a pool that no one can spend.

The foundation still holds lumens it says will be spent or given out over time to promote Stellar. Those are counted in the total but not in circulation.

What people use it for

People and companies use Stellar to send money across borders and to move stablecoins. People also hold and trade XLM.

Risks to know

• One large holder. The foundation still holds lumens it plans to spend or give out. The 2019 burn showed how much one holder's decisions can change the supply.
• Price swings. XLM can fall far and fast, like other coins.

Learn more

Lesson 10 covers stablecoins, Lesson 31 explains sending and receiving crypto, and Lesson 32 covers network fees.