Stellar was once in the top 10 in the cryptocurrency market. As an “ancient” token that was born in 2014, Stellar generated $100 million in airdrops and saw a hundred-fold increase.
Now, gone are the days when Stellar was popular. Last year, however, Grayscale Fund made Stellar dynamic again. So, what is Stellar? What has it undergone? Let’s take a look.
Stellar is also known as XLM for short.
On July 31, 2014, Stellar was officially launched. Like XRP, Stellar locates cross-border payments and adopts a similar algorithm. According to the official description, Stellar’s main function is to simplify the legal transfer process and support cross-border transfers between any currency pair. Currencies like US dollar, euro, RMB, Japanese yen or Bitcoin can be transferred easily and fast. Based on blockchain technology, it can connect 180 currencies in the world within 2–5 seconds, connect banks, payment systems and the general public, and reduce transaction costs and time delays caused by cross-border payment.
Stellar is based on a decentralized open-source protocol called Stellar protocol. Like Ethereum, Stellar also supports dApps and smart contracts.
You can think of Stellar as a combination of “Ethereum lite + upgraded Ripple”.
Stellar is naturally in XRP’s DNA, which is originated from Jed McCaleb, its founder.
In 2012, Jed founded Ripple, but he was still only interested in technical research. Jed later hired Chris Larsen as CEO of the company, and Jed himself as CTO. During Ripple’s development, the two often disagreed over strategic direction, and ended up in a vote that ousted Jed.
Jed, however, was not willing to stop. He started his own business and set up Stellar protocol.
Unlike the centralized XRP, Stellar is a decentralized cryptocurrency.
According to the data, the total number of Stellar is 100 billion, and the distribution rules are as follows:
50% of XLM is scheduled to be airdropped to users worldwide;
25% of XLM is allocated to the financially underserved through increased coverage plans, as well as to nonprofits;
20% of Stellar goes to Bitcoin holders;
The remaining 5% is used as the operating expenses of the Stellar Foundation.
According to the plan, the Stellar Foundation only keeps 5% of the Stellar Coin, which benefits a lot.
Differences between Stellar and Ripple
Because of the same origins, Ripple has long been inevitably compared with Stellar. In fact, there are more distinctions than shared features.
Ripple is a corporation, and all tokens are controlled by Ripple Labs, while Stellar is owned by SDF (Stellar Development Foundation).
Ripple takes the RPCA (Ripple Protocol Consensus Algorism) Consensus, while Stellar takes the SCP (Stellar Consensus Protocol) Consensus.
In token allocation, 60% of Ripple’s tokens are owned by the founders, while 95% of Stellar’s tokens are distributed to partners and users.
For the ledger, Ripple has a private ledger with publicly available codes. Stellar maintains a public chain.
Conceptually, Ripple is primarily for large banks or other financial institutions, while Stellar is for a wider range of people, including ordinary people who don’t have bank accounts, and it’s more universal.
On the inflation side, Ripple’s token total is stable at 100 billion, while Stellar is maintaining a 1% inflation rate.
Not only is it better than XRP in terms of decentralization, Stellecoin is also notable in terms of technology.
A published white paper (by Professor David Mazières) details how the stellar consensus protocol (SCP) works. The white paper is listed in Google Academic and has been cited 39 times up to now. The paper is 32 pages long, highly technical and contains detailed mathematical proof of the correctness of the Federal Byzantine Agreement (FBA) consensus model.
XMR, BTC and ETH, which is better in performance?
Stellar and Ripple are both outliers in the crypto world. Overall, both BTC and ETH have clearly positioned themselves to create decentralised financial networks by disrupting traditional banking systems.
Stellar and Ripple are looking elsewhere. They seek to work with the established financial world to improve the speed and reliability of cross-border payments, reduce frictional costs make the promotion faster.
In terms of TPS, Like Ripple, Stellar can process over 1000+ transactions per second, much better than BTC and ETH. Stellar has an advantage over Ripple in terms of transaction costs and openness because Ripple is more like a distributed ledger maintained by a centralized institution.
This openness is mainly due to the fact that Stellar has a large number of Anchors around the world. Twenty-three Anchors, including Tempo, are located on all continents and serve as bridges between different currencies and the Stellar network. Users trade on the Stellar network, and the anchor points issue credit points based on their deposits, which users can convert into fiat currency.
Stellar was founded to make transactions easier for everyone through technology, and to provide efficient payment solutions for all financial participants around the world.
Prosperity and tranquility
Stellar price: https://www.bixiaobao.com/cn/coinlist/stellar
In 2017, with the arrival of the bull market, Stellar began to climb up. At the peak of the bull market, Stellar rose more than 100 times and became a sensation star project.
However, due to the disputes between Stellar’s founder and Ripple, investors started to cast doubt on his morality, and even suspected that he wanted to scam the investors. Since then, as the bull market came to an end, stellar price gradually fell, currently ranking 17th on www.bixiaobao.com.
In January 2019, Grayscale launched its Stellecoin-based trust fund. Grayscale is the world’s first cryptocurrency investment fund, which includes Bitcoin Trust, Ethereum Trust, Litecoin Trust and so on.
In March 2019, Stellar struck a partnership with IBM. IBM’s World Wire blockchain payment network is the World’s first blockchain system to integrate payment information, clearing and settlement on a unified network, allowing participants to dynamically select a variety of crypto assets for settlement. Stellar is at the heart of it and is the cornerstone of rapid cross-border payment transactions.
In November 2019, the Stella Foundation held a meeting and announced that 55 billion Stella coins would be permanently destroyed. Shortly after the news was announced, Stellar (XLM) rose by 24%.
Compared with Ripple as a direct competitor or other traditional financial giants, Stellar may not have an absolute advantage in terms of market value scale and resource support in the short term, but we believe that Stellar is going to grow with its extraordinary technical strength, excellent products and market strategy.
