What is Stellar (XLM)?
Stellar (XLM) is an open-source payment blockchain built for fast, low-cost cross-border transfers and the issuance and settlement of digital assets.
Stellar was launched in 2014 by Jed McCaleb, a Ripple co-founder, and Joyce Kim, and the nonprofit Stellar Development Foundation (SDF) leads its development and ecosystem support. Stellar shares goals with Ripple but has long emphasized small payments and access for the underbanked.
Stellar's native coin, XLM (lumens), pays network fees, serves as a minimum balance that deters spam, and acts as a bridge asset between different currencies.
How does Stellar work?
Stellar uses no mining and finalizes transactions within seconds through the Stellar Consensus Protocol (SCP), a federated Byzantine agreement model. Each Stellar validator chooses the set of nodes it trusts when reaching consensus.
Stellar relies on anchors, meaning regulated firms and payment providers that issue and redeem fiat currencies or other assets as tokens on the network. Stellar's built-in decentralized exchange lets users swap and settle different currencies and assets directly on-chain.
Stellar activated Soroban smart contracts on mainnet in February 2024, per the SDF announcement, opening the network to DeFi and application development.
What is the supply of XLM?
Stellar's XLM has no new issuance because a 2019 network vote removed the 1% annual inflation mechanism. In November 2019 the SDF burned about 55 billion XLM from its holdings, fixing total supply at roughly 50 billion XLM, according to the SDF announcement at the time.
Stellar's foundation still holds a large share of XLM for ecosystem programs, and live circulating supply and market-cap rank can be checked on aggregators such as CoinGecko.
What is happening with Stellar in 2026?
Stellar is leaning further into compliant institutional payments and tokenization. Stellar's Protocol 26 upgrade in 2026 added compliance tools such as on-chain asset freezes and higher precision for financial instruments.
Stellar was named by the Depository Trust & Clearing Corporation in a May 27, 2026 announcement: DTCC said its DTC tokenization service will connect to the Stellar public blockchain, with tokenized DTC-custodied assets planned to become available on Stellar in the first half of 2027.
Stellar continued to host stablecoins such as USDC and tokenized real-world assets, including treasury and fund products, throughout 2026.
What is Stellar used for?
Stellar serves as infrastructure for low-cost, fast cross-border payments and stablecoin issuance. Circle has issued USDC on Stellar since 2021, and MoneyGram launched a service linking Stellar-based USDC with cash deposits and withdrawals.
Stellar has also been used in financial-inclusion work such as delivering humanitarian aid payments.
Stellar is expanding into DeFi through Soroban smart contracts and into institutional tokenization of real-world assets.
What are the risks of Stellar?
Stellar faces strong competition from other payment and settlement networks, including Ripple (XRP), Ethereum-based tokenization platforms and permissioned institutional chains.
Stellar draws debate over decentralization and supply because the SDF holds a large amount of XLM, and growth in tokenized assets on the network does not guarantee value accrual to XLM.
Stellar's key test is whether institutional partnerships turn into real transaction volume and usage, and regulatory shifts remain an uncertainty. This overview is for information only and is not investment advice.
