Stellar

Project Overview

Stellar is a public blockchain network launched in 2014, designed specifically to facilitate fast, low-cost payments and the issuance of representations of traditional assets, with a particular focus on cross-border transactions and financial-institution partnerships.

Technology & Architecture

Stellar uses its own consensus protocol, the Stellar Consensus Protocol (SCP), based on federated Byzantine agreement: network participants choose which other participants they trust (their "quorum slice"), rather than relying on mining or simple token-weighted stake. The protocol natively supports issuing and trading custom assets on-chain, including tokenized representations of fiat currencies, which underpins Stellar's stated focus on cross-border payment and remittance use cases.

Token Utility & Economics

XLM pays Stellar's minimal, deliberately low transaction fees and satisfies a small minimum-balance reserve requirement for accounts, which also functions as an anti-spam mechanism. It can act as a bridge asset for paths between two other assets without a direct trading market. Stellar's inflation mechanism, which had minted new XLM on a fixed schedule, was ended by a community vote on October 28, 2019, after which total supply became effectively fixed (net of any foundation-level burns) rather than continuously inflating.

The Stellar Development Foundation (SDF) burned approximately 55 billion XLM in November 2019, cutting total supply from roughly 105 billion to about 50 billion -- by far the largest single supply event in Stellar's history. In February 2026, SDF moved roughly 2.7 billion XLM between its own internal accounts to match a new treasury structure (grouping holdings into Development, Product & Innovation, Growth, and Assets & Liquidity buckets); SDF states this changed how its holdings are organized, not the total amount held. Independent estimates of SDF's current XLM holdings and of circulating supply disagree (one blogger's analysis estimates SDF holds roughly 16 billion XLM; a separate source puts circulating supply near 31 billion as of April 2026) and should be treated as low-confidence until checked against SDF's own disclosures or an on-chain account-labeling service such as Stellar Expert.

Governance

Stellar's protocol-level governance operates through community votes on validators' quorum configuration and through the non-profit Stellar Development Foundation, which funds core development, publishes research (including its own institutional infrastructure report), and holds a substantial share of total XLM supply as treasury. This gives SDF outsized influence over ecosystem direction relative to a purely on-chain, token-weighted governance system, a trade-off that mirrors the network's broader emphasis on institutional and payments partnerships over fully permissionless, crypto-native governance.

Ecosystem & Adoption

Stellar has been used in payment-focused and financial-inclusion-oriented projects, and its anchor network -- regulated entities that issue and redeem assets on-chain -- reportedly spans over 500,000 on- and off-ramps. Stellar's live stablecoin set by 2026 includes USDC, EURC, PayPal's PYUSD, and MGUSD, a stablecoin launched June 2, 2026 specifically for MoneyGram's remittance network; reported stablecoin market capitalization on Stellar ranges from roughly $324 million to nearly $797 million across different secondary sources depending on which tokenized-dollar instruments are counted. Reported DeFi TVL figures for 2026 also vary by source and date, from roughly $200 million to a reported all-time high near $242 million, with Blend (the network's primary lending protocol) cited as the largest single contributor at roughly $110 million. SDF has stated a public target of $1 billion in network asset value growth for 2026, and Mastercard settlement flows have reportedly been piloted on the network.

Competitive Landscape

In cross-border payments and remittances, Stellar is most often compared with Ripple/XRP, which pursues a similar institutional-payments positioning with its own distinct consensus design and a more concentrated validator/governance history. In stablecoin issuance and tokenized real-world assets, Stellar competes with Ethereum and its Layer 2s (deeper liquidity and DeFi ecosystem, but materially higher fees for simple payments) and with purpose-built payment chains. Stellar's differentiator is its native, protocol-level asset-issuance and anchor-network model, built specifically around regulated fiat on/off-ramps rather than general-purpose smart contracts.

Security & Decentralization

Federated Byzantine agreement's security depends on the quorum sets participants choose to trust, a different trust model from token-weighted proof of stake, with different failure modes (such as a validator's chosen quorum slice becoming unavailable or untrustworthy) rather than the economic-slashing or 51%-stake attacks associated with proof-of-stake and proof-of-work systems respectively. The Stellar Development Foundation's large treasury holdings and central role in core development represent a form of influence concentration distinct from, but comparable in effect to, validator concentration on other networks.

Risks & Dependencies

• Federated Byzantine agreement's security depends on the quorum sets participants choose to trust, a different trust model from token-weighted proof of stake with its own documented failure modes.
• Stellar's stated cross-border-payment and financial-institution use case depends on real-world partnerships and regulatory relationships materializing, not purely on-chain demand.
• Deliberately minimal transaction fees mean XLM captures comparatively little direct value from network usage by design, a different value-accrual profile from fee-capturing networks.
• The Stellar Development Foundation's large XLM treasury and central role in ecosystem direction is a documented influence-concentration factor; independent estimates of its current holdings and of circulating supply disagree and are not resolved by any source consulted for this profile.

Relevant Metrics

References

• Primary: Stellar Development Foundation, institutional infrastructure report -- https://stellar.org/resources/institutional-infrastructure-report
• Secondary: "The Stellar Foundation has burned over 50% of the total XLM token supply" -- https://www.theblock.co/linked/45793/the-stellar-foundation-has-burned-over-50-of-the-total-xlm-token-supply-canceling-airdrop-programs
• Secondary: Stellar XLM inflation analysis, independent blog, June 2026 -- https://dev.to/mrnasdog/stellar-xlm-inflation-analysis-zero-protocol-mint-sdf-deploys-are-the-only-flow-180g
• Secondary: Stellar DeFi TVL ATH report -- https://bsc-news-v2-fe.vercel.app/post/stellar-defi-tvl-ath-242m
• Secondary: Stellar DeFi TVL / RWA growth report, LiveBitcoinNews -- https://www.livebitcoinnews.com/stellar-defi-tvl-hits-200m-as-rwa-growth-fuels-institutional-demand/