What is Stellar? Your Complete XLM Guide for 2025

What is Stellar? XLM Explained – August 2025

Stellar is an open-source, decentralized payment network, and its native cryptocurrency is the Lumen, which trades under the ticker XLM. It was created to connect different financial systems, enabling the quick and low-cost transfer of money across borders.

The network is designed for everyone, from individuals sending money back home to large financial institutions that need to process global payments. It allows for the creation, sending, and trading of digital representations of all forms of money—dollars, pesos, bitcoin, and nearly anything else. This process is significantly faster and more cost-effective than traditional banking systems. For example, a typical transaction on the Stellar network settles in about 5 seconds and costs a tiny fraction of a cent.

Stellar’s primary goal is to increase access to the global financial system, particularly for individuals in regions lacking traditional banking infrastructure. It operates as a public network that anyone can use, built to support real-world financial products and services. Its approach of connecting blockchain with the existing financial world sets it apart from many other digital currency projects.

Why is Stellar Unique? XLM Features

Stellar’s design features a set of specific solutions that address common issues in cross-border payments and digital asset transfers. These components work together to create a fast, scalable, and user-friendly network.

One of its most important characteristics is the Stellar Consensus Protocol (SCP). This is the network’s method for verifying transactions. Unlike the energy-intensive mining required by some blockchains, SCP employs a system where a set of trusted nodes collectively agree on the validity of transactions. This process is what enables Stellar to confirm transactions quickly and efficiently, without incurring high energy consumption. It prioritizes safety and fault tolerance, ensuring the network remains secure.

Another key component is the concept of “Anchors.” Anchors are trusted entities, like banks or financial institutions, that connect the Stellar network to traditional banking systems. They can accept a real-world currency deposit, such as U.S. dollars, and issue a corresponding digital token on the Stellar network. This allows users to hold and trade digital versions of fiat currencies. Users can later redeem these tokens for the actual currency from the anchor.

The native digital currency, the Lumen (XLM), serves two critical functions. First, it’s used to pay for transaction fees on the network. The fee is extremely small, just 0.00001 XLM, but it’s required for every transaction to prevent spam and malicious activity on the ledger. Second, XLM acts as a bridge currency. If you want to trade between two different currencies that don’t have a direct market, Stellar can use XLM as an intermediary to complete the exchange seamlessly in a single transaction.

Stellar History, Facts & Statistics

The story of Stellar begins with Jed McCaleb, a notable figure in the crypto space who co-founded Ripple and created the Mt. Gox exchange. McCaleb left Ripple in 2013 due to disagreements over the project’s direction. He then teamed up with former lawyer Joyce Kim to launch Stellar in 2014. The initial protocol was a fork of Ripple’s, but its vision differed. Stellar was established as a non-profit, aiming to boost financial inclusion for individuals, whereas Ripple focused more on serving large banking institutions.

In 2015, Stellar launched its updated network, which no longer used the Ripple protocol. This update introduced the Stellar Consensus Protocol (SCP), a new consensus model created by Stanford professor David Mazières. This was also the year the native asset was officially named “Lumen” (XLM) to help distinguish the currency from the Stellar network and the non-profit Stellar Development Foundation (SDF) that supports it. A major shift in its tokenomics occurred in November 2019, when the SDF burned over half of the total XLM supply, cutting it from over 100 billion to just 50 billion tokens.

Stellar Key Facts & Statistics

• Jed McCaleb, the creator of Stellar, also founded the infamous Mt. Gox exchange and co-founded Ripple (XRP).
• The Stellar network was officially launched on July 31, 2014.
• Transactions on the Stellar network typically settle in just 2 to 5 seconds.
• The transaction fee is fixed at a nominal 0.00001 XLM, making it extremely inexpensive to send value across the globe.
• Unlike Bitcoin, Stellar does not use a mining system. It relies on the Stellar Consensus Protocol (SCP), which is significantly more energy-efficient.
• The total supply of XLM is capped at 50 billion after the Stellar Development Foundation burned over 55 billion tokens in 2019.
• Every account on the Stellar network must maintain a minimum balance of 1 XLM.
• The network can process thousands of transactions per second.
• Stellar has secured major partnerships with companies like IBM, MoneyGram, and Franklin Templeton.
• Circle’s USDC, one of the world’s leading stablecoins, is also issued on the Stellar network.
• The network has processed over 1.5 billion total operations since its launch.
• The all-time high price for XLM was $0.9381, reached on January 4, 2018.

As a digital asset, the value of XLM is volatile and subject to market fluctuations and uncertainties.

XLM Price Predictions. Is Stellar Going to Crash or Moon in 2025?

Digital currencies are known for their price swings, and Stellar’s XLM is no different. Like its peers, its value can fluctuate rapidly in response to market news, technological advancements, and investor sentiment. This has led to some dramatic highs and lows over the years.

XLM reached its peak price of $0.9381 during the major crypto bull run in early 2018. On the flip side, its all-time low was a fraction of a penny, recorded at $0.0004761. This wide range demonstrates just how much its value can fluctuate.

For 2025, analysts offer a wide spectrum of forecasts for XLM’s price. Some experts are optimistic, pointing to the network’s strong fundamentals and growing adoption. Bullish predictions see XLM potentially breaking past the $0.50 mark and even reaching as high as $1.13 to $1.29. These forecasts are often based on successful network upgrades, like the integration of smart contracts via Soroban, and the expansion of key partnerships in the payments sector.

On the other hand, more cautious analysts predict a price range between $0.25 and $0.40 for 2025. These predictions take into account the competitive nature and potential regulatory headwinds that may affect the entire cryptocurrency market. There are also some bearish outlooks that suggest the price could fall. For more detailed analysis, you can check this Stellar XLM price prediction that provides more trading tips and potential price targets.

Several key factors can influence whether XLM’s price goes up or down. Positive drivers include new strategic partnerships with major financial institutions, which add credibility and increase network usage. The continued adoption of Stellar for cross-border payments, as well as the growth of stablecoins like USDC on its platform, are also significant growth factors. A general bull market in the crypto space would likely lift XLM’s price as well.

Conversely, certain factors could negatively impact its value. Increased competition from other payment-focused blockchains, like Ripple, is a constant pressure. Regulatory changes in major economies could create uncertainty and dampen investor enthusiasm. Additionally, a prolonged bear market or a major security issue on the network could also lead to a price drop.

Stellar Risks, Scams, and Hacks

Beyond the typical market fluctuations, the cryptocurrency space is rife with scams. These threats range from deceptive schemes to outright theft, which makes it important for every XLM holder to stay informed and cautious.

The primary risks for Stellar users often mirror those found across the wider crypto world. Market risk is a given; the price of XLM can be highly volatile, swinging based on market sentiment, project news, and macroeconomic factors. This means the value of your holdings can change dramatically in a short period. Another significant risk is regulatory uncertainty. Governments worldwide are still determining how to approach digital assets, and new regulations could impact Stellar’s operations and the value of XLM.

Scams are particularly common. Phishing attempts, where scammers create fake websites or emails that look like official Stellar platforms or popular wallets, are used to steal login credentials and private keys. Social media is another popular playground for scammers, who might impersonate members of the Stellar Development Foundation or run fake XLM giveaway promotions that ask users to send a small amount of crypto to receive a larger amount back.

How to Avoid Stellar Risks, Scams and Hacks?

Staying safe requires a proactive mindset. Here are a few things to keep in mind:

• If It Sounds Too Good to Be True, It Is: Be highly skeptical of any offer that promises guaranteed high returns or free XLM. Official airdrops or programs from the Stellar Development Foundation will be announced through their verified channels and will never request that you send funds first.
• Verify Website URLs: Always double-check the URL of any website where you plan to enter your wallet information. Scammers often use domain names that are just one or two letters off from the real thing. Bookmark the correct sites to avoid landing on a phishing page through a search engine.
• Question Unexpected DMs: Be wary of unsolicited direct messages on platforms like X, Telegram, or Discord, even if they appear to be from a known personality or support staff. Scammers often use these channels for targeted phishing attacks.
• Understand Market Volatility: Never invest more than you are willing to lose. The cryptocurrency market is known for its price fluctuations, and it’s essential to be prepared for potential downturns.

How to Secure Your XLM?

Taking control of your asset security is the best defense against theft.

• Use a Hardware Wallet: For long-term storage, a hardware wallet is the top choice. It keeps your private keys offline, making them inaccessible to online hackers.
• Enable Two-Factor Authentication (2FA): Turn on 2FA for every exchange or service you use. This adds an extra layer of security, requiring a second verification step from a separate device before you can log in or make transactions.
• Keep Your Secret Key Private: Your secret key or seed phrase is the master key to your funds. Never share it with anyone or enter it on any website. Write it down and store it in a secure, offline location.
• Use Strong, Unique Passwords: Avoid reusing passwords across different platforms. Use a password manager to create and store complex passwords for all your accounts.
• Be Careful with Public Wi-Fi: Avoid accessing your crypto wallets or exchange accounts when connected to public Wi-Fi networks, as these can be insecure and expose you to potential snooping.

Always get your information from official sources. The crypto world is full of noise, but the Stellar Development Foundation’s official blog, website, and verified social media accounts are the only places you should trust for project updates. Be careful about connecting your wallet to third-party platforms and always do your own research before interacting with a new service.

Latest News on Stellar

Since its start in 2014, Stellar has grown from a simple payment network into a huge platform for asset tokenization and financial services. Its core mission has always been to create a more accessible global financial system. A key part of this was the introduction of the Soroban smart contracts platform in early 2024, which opened the door for developers to build more complex applications and decentralized finance (DeFi) services on the network. This marked a major step in expanding Stellar’s utility beyond just payments.

Here are some of the most recent developments and what’s on the horizon:

• The network is preparing for the Protocol 23 upgrade. The mainnet vote is scheduled for September, following the release of testnet and stable versions in August. Protocol upgrades typically introduce new features and improve network efficiency.
• Stellar remains a leading platform for real-world asset tokenization. Major financial players, such as Franklin Templeton and WisdomTree, have leveraged the network to launch tokenized versions of traditional assets.
• The partnership with MoneyGram remains a cornerstone of Stellar’s real-world applications, enabling near-instant cash-to-crypto on- and off-ramps in numerous countries.
• Circle’s USDC, a major stablecoin, is widely used on the Stellar network. In late 2023, Circle also made its euro-backed stablecoin, EURC, available on Stellar, further improving its multi-currency capabilities.
• The Stellar Community Fund (SCF) continues to provide grants to developers and projects building on the network, helping to grow the ecosystem of wallets, tools, and services. You can stay up to date with the latest Stellar news to see how the project is expanding.

To keep up with official announcements and community discussions, follow these verified channels:

• Stellar on X (Twitter)
• r/Stellar

How to Get Started with Stellar?

Jumping into the Stellar ecosystem is a pretty direct process. The network is built for accessibility, connecting traditional finance with the digital asset world without a steep learning curve.

Here is a simple breakdown for getting your start with Stellar:

1. Get a Wallet: First, you need a place to store your Lumens (XM). The Stellar network supports a variety of wallets, from software-based ones that run on your computer or phone to more secure hardware options. Your choice depends on your needs for security and convenience.
2. Activate Your Account: A new Stellar account needs to be funded with a small amount of XLM to become active on the network. A minimum balance of 1 XLM is required for every account. This measure helps keep the network free of spam and abandoned accounts. If you’re experimenting, you can use the Testnet and get free, non-real XLM from a service called Friendbot.
3. Acquire Lumens (XLM): For the main network, you’ll need real XLM. You can obtain them from most major centralized cryptocurrency exchanges, such as Coinbase, Binance, and HTX. The process usually involves creating an account on the exchange, verifying your identity, depositing funds, and then purchasing XLM. After buying, you can transfer your XLM to the personal wallet you set up in the first step.
4. Start Transacting: With an active, funded wallet, you’re ready to go. You can send payments across the globe, trade different assets on Stellar’s built-in decentralized exchange, or interact with applications built on the network. Because transactions typically finalize in about 5 seconds and cost a tiny fraction of a cent, you can send money quickly and affordably.

To wrap up, here are some key points to remember about Stellar:

• Core Mission: To connect global financial systems and provide fast, affordable cross-border payments for everyone.
• Native Token: Lumens (XLM) are used for transaction fees and as a bridge asset to connect different currencies.
• Consensus: It uses the Stellar Consensus Protocol (SCP), which is fast and energy-efficient, avoiding the need for mining.
• Speed & Cost: Transactions cost just 0.00001 XLM and are confirmed in a few seconds.
• Token Supply: The total supply of XLM is capped at 50 billion, with no new tokens being created.
• Use Cases: Key applications include remittances, asset tokenization, and micropayments, with a focus on financial inclusion for unbanked populations.

This information is current as of August 2025.

What is Stellar FAQs

Below are answers to some frequently asked questions about Stellar in 2025:

Is Stellar a Good Investment?

Stellar’s potential is linked to its real-world application in global payments, backed by major partners. The network settles transactions in under 5 seconds for a fee of just 0.00001 XLM. This utility shows promise, but like any digital asset, its price is subject to high market volatility and associated risks.

Is XLM Going to Skyrocket?

Predicting a price explosion is difficult, as it depends on market-wide trends and adoption rates. Stellar has seen significant network growth, with active addresses surging by 81% in a recent 30-day period. While strong fundamentals support its value, a sudden price surge isn’t guaranteed in the volatile crypto market.

Can Stellar Reach $10?

A $10 price point is highly improbable in the near term. This would create a market cap of $500 billion based on its 50 billion total token supply. Considering its all-time high was $0.9381, reaching such a valuation would require an extraordinary and unprecedented market expansion for the asset.

Is XLM Worth Holding?

Holding XLM depends on your belief in its long-term vision for financial inclusion and cross-border payments. The Stellar Development Foundation, a non-profit, guides the project, and over 7.5 million accounts exist on the network. Its value is tied to the network’s continued adoption and the success of its ecosystem.

Is XLM Related To XRP?

Yes, both projects share a co-founder, Jed McCaleb, who started Stellar in 2014 after his time at Ripple. Both networks are built for efficient cross-border payments. They are, however, separate projects with different operational models, target audiences, and underlying consensus protocols, making them distinct competitors.

Which is Better, XRP or Stellar?

Defining “better” is subjective and depends on the intended use. Ripple focuses on providing solutions for banks and large institutions. In contrast, Stellar is geared towards individuals and financial inclusion, operating under a non-profit foundation. Stellar is often seen as more decentralized, as its network allows for open participation.