What Is Stellar?

Stellar is an open-source, decentralized blockchain network designed for fast and affordable financial transactions. Founded in 2014 by Jed McCaleb (co-founder of Ripple and Mt. Gox) and Joyce Kim, and supported by the non-profit Stellar Development Foundation (SDF), Stellar focuses on connecting financial systems and enabling cross-border payments, asset tokenization, and access to financial services for underserved populations. The SDF received early funding from the payments company Stripe, along with corporate support from BlackRock, Google.org, and FastForward.

Overview - Table of Contents
What Is Stellar?
Getting Started With Stellar
How To Get A Stellar Wallet?
Stellar Resources
How To Buy Stellar Lumens?
Latest Stellar News

The Stellar network uses the Stellar Consensus Protocol (SCP), a federated Byzantine agreement mechanism described in a white paper by Stanford professor David Mazieres. SCP allows the network to reach consensus without mining, enabling transaction settlement in 3-5 seconds with extremely low fees (typically a fraction of a cent). The protocol is designed to be energy-efficient and supports flexible trust configurations where validators choose which other validators they trust. The network is capable of processing over 1,000 transactions per second and can scale to support a billion unique accounts.

Lumens (XLM) are the native currency of the Stellar network. XLM serves multiple purposes: it is used to pay minimal transaction fees, acts as a bridge currency between different assets on the network, and prevents spam by requiring accounts to maintain a small minimum balance. When two parties want to exchange currencies that lack a direct trading pair, XLM can serve as an intermediary, allowing the network to route through multiple conversion steps automatically. The Stellar network supports the issuance and trading of any type of tokenized asset, including fiat-backed stablecoins, commodities, and securities.

A key concept in the Stellar architecture is the anchor system. Anchors are trusted entities that act as bridges between traditional currencies and the Stellar network. They accept deposits in a given currency and issue corresponding credits on the Stellar ledger. This model is similar to how PayPal accepts bank deposits and issues PayPal balances, but on Stellar all anchors operate on the same network, allowing credits from different anchors to be exchanged seamlessly. This interoperability is what makes Stellar particularly powerful for cross-border payments.

Stellar has a built-in decentralized exchange where users can trade any assets issued on the network. The exchange maintains order books for every currency pair, allowing users to post offers to buy or sell at specified rates. Path payments allow users to send one currency and have the recipient receive a different currency, with the network automatically finding the best exchange path — even if it requires a chain of intermediate conversions. This makes Stellar well-suited for remittances and cross-border payments where currency conversion is needed.

The Stellar network gained early prominence through a partnership with IBM for cross-border payments. The IBM World Wire system used Stellar to process live transactions in 12 currency corridors across the Pacific Islands, Australia, New Zealand, and the United Kingdom, working with banking partners including BBVA, National Australia Bank, TD Bank, Mizuho Financial Group, Sumitomo Mitsui Financial Group, RCBC Philippines, Kasikornbank Thailand, and several Indonesian banks. Robert Bell of the KlickEx Group, a settlement and foreign exchange company based in Oceania, played a key role in the initiative.

The Stellar network is free to use for integration. All software is licensed under the Apache License, version 2.0, which permits commercial use, modification, and distribution. Stellar.org, the non-profit behind the project, does not charge institutions for using the network. The organization covers operational costs through a percentage of the initial lumen supply set aside for this purpose, tax-deductible donations, and corporate sponsorships. The network infrastructure is maintained by independent servers run by organizations and individuals around the world, with no single point of failure.

The Horizon API provides a RESTful interface for submitting transactions, checking account statuses, and subscribing to event streams. Stellar Core is the software that each validator runs to maintain a local copy of the ledger, communicate with peers, and participate in consensus. Common use cases for Stellar integration include micropayments, remittances, mobile money interoperability, and social enterprise projects. Integration typically requires 120-200 hours of development effort, depending on team size and experience.

Since the IBM partnership, Stellar has continued to build adoption in the payments and fintech space. Circle launched USDC support on Stellar, making it one of the primary networks for dollar-denominated stablecoin transfers. MoneyGram integrated Stellar for crypto-to-cash transactions, and several central banks have explored the network for digital currency issuance pilots. Soroban, Stellar's smart contract platform launched in 2024, expanded the network's capabilities beyond payments to support DeFi applications, programmable finance, and more complex on-chain logic.

Getting Started With Stellar

Getting started with Stellar is simple:

Step 1: Choose a Stellar wallet. LOBSTR is the most popular mobile wallet for Stellar.
Step 2: Purchase XLM from a major exchange such as Coinbase, Kraken, or Binance.
Step 3: Transfer XLM to your personal wallet. Stellar accounts require a minimum balance of 1 XLM to activate.
Step 4: Explore the Stellar ecosystem — trade assets on the built-in DEX, interact with Soroban smart contracts, or send cross-border payments.

How to Get a Stellar Wallet?

LOBSTR Wallet

LOBSTR is the most popular Stellar wallet, available as a mobile app for iOS and Android and as a web application. It supports XLM and all Stellar-based tokens, provides access to the Stellar DEX for trading, and includes built-in support for Soroban smart contracts. The interface is clean and beginner-friendly.

Freighter Wallet

Freighter is a browser extension wallet for Stellar, similar to MetaMask for Ethereum. It is designed for users who interact with Stellar-based web applications and Soroban dApps. Freighter is open-source and maintained by the Stellar Development Foundation.

Hardware Wallets

Ledger hardware wallets support XLM and can be managed through Ledger Live. For large holdings, hardware wallets provide the strongest security by keeping private keys offline.

Stellar Resources

How to Buy Stellar Lumens?

XLM is widely available on major cryptocurrency exchanges:

Centralized Exchanges

XLM can be purchased with fiat currency on Coinbase, Kraken, Binance, and many other exchanges. Most offer XLM/USD, XLM/EUR, and XLM/BTC pairs. After purchasing, transfer your XLM to a personal wallet for security and to access the full Stellar ecosystem.

Stellar DEX

If you already have assets on the Stellar network, you can trade them on Stellar's built-in decentralized exchange through wallets like LOBSTR or web-based interfaces like StellarTerm.

Latest Stellar News

Stellar continues to grow its ecosystem with a focus on real-world payments and asset tokenization. The Soroban smart contract platform has expanded Stellar's capabilities into DeFi and programmable finance. The network has seen growing adoption for stablecoin issuance and cross-border payment corridors, with partnerships spanning fintech companies, remittance providers, and central bank digital currency pilots. The Stellar Development Foundation remains active in supporting open-source development and promoting financial inclusion through grants and community programs.