Stellar Blockchain Explained: A Guide To XLM Crypto

Stellar is a public blockchain that supports cross-currency transactions. The network connects banks, payment providers, and individuals. 

It aims to make money transfers faster and less expensive. The network uses its native token, XLM, to pay for transactions.

Stellar works by validating transactions through a network of nodes. These nodes reach consensus with a unique protocol. The network supports asset transfers, including fiat currencies and crypto.

As of March 2025, XLM is the 14th-largest cryptocurrency, with a market cap of $9billion. Here’s everything you need to know about Steller (XLM).

How does Stellar work

Stellar uses a consensus protocol to validate transactions. This protocol does not require mining. Nodes agree on the state of the ledger and confirm transactions quickly. This process lowers transaction fees and speeds up transfers.

Stellar supports simple contracts that execute automatically. The network facilitates token creation. This feature helps users represent assets such as currencies or commodities on the blockchain.

XLM token overview

XLM is the native token of the Stellar network. The token acts as a bridge between different currencies. It helps the network settle transactions. Every transaction on Stellar costs a small fee in XLM.

The token helps maintain network security and prevents spam. Users pay a minimal fee that discourages misuse of the network. The small fee keeps transactions fast and affordable.

Tokenomics

• Stellar launched with 100 billion tokens.
• The foundation burnt many tokens in 2019 to reduce supply.
• The circulating supply supports everyday transactions.
• A portion of the tokens remains with the foundation.
• The remaining tokens fund network improvements and partnerships.
• Low transaction fees promote fast and affordable transfers.

Vesting schedule

• The foundation holds a part of the token supply.
• The foundation releases these tokens gradually over several years.
• The gradual release prevents sudden price swings.
• The schedule maintains market stability.
• The foundation uses released tokens to fund new projects.
• The timeline for token release is available on the foundation’s website.

Network structure

Stellar uses a decentralized network of nodes. These nodes work together to reach consensus. Each node validates transactions independently. The network does not rely on a central authority.

The decentralized structure improves speed and lowers costs. Users enjoy fast transfers with minimal fees. The structure supports the safe transfer of assets across borders.

The network supports multiple asset types. Users can transfer different currencies and digital assets. This flexibility makes Stellar a versatile platform for payments.

Utility of XLM

XLM plays several roles in the Stellar network. It acts as a bridge between currencies. When a user sends money, XLM can convert one currency to another. This process happens quickly and with low fees.

XLM also pays for transaction fees. Every operation on the network requires a small fee. The fee protects the network from misuse. The cost remains low, which makes the network accessible.

In addition, XLM supports new projects. Developers use the network to create tokens and simple contracts. The token plays a role in the network’s growth and adoption.

Latest developments for Steller in 2025:

• Institutional adoption and stablecoin deployment: Societe Generale-FORGE selected Stellar to deploy its MICA-compliant EUR-backed stablecoin. This move not only underscores Stellar’s reliability for cross-border payments but also highlights growing institutional trust in its network.
• Global partnerships for financial inclusion: The United Nations Development Programme (UNDP) joined forces with the Stellar Development Foundation (SDF) to advance blockchain solutions targeting financial inclusion. This collaboration is designed to extend affordable financial services to underserved regions.
• Network expansion and ecosystem growth: At the Stellar Meridian Conference in London, Etherfuse’s CEO announced that Etherfuse will integrate with the Stellar network in 2025. This development is expected to boost network efficiency and broaden the ecosystem’s technical capabilities.
• Enhanced verification and security: Stellar has also partnered with Mastercard to join its Crypto Credential ecosystem, facilitating verified interactions across public blockchains. This integration aims to bolster security and streamline user verification processes

Stellar use cases

Stellar serves several practical purposes. The network connects financial institutions with customers. Banks can use Stellar to move funds quickly. Payment providers use the network to lower the cost of transfers.

The network helps people send remittances. Immigrants send money home using Stellar. The fast transfer speeds help recipients get funds quickly. Users in countries with high fees benefit from Stellar.

Stellar supports the creation of stablecoins. Financial institutions can issue tokens backed by fiat currencies. These stablecoins work on the Stellar network. They offer a simple way to move money without high volatility.

Developers build simple applications on Stellar. The network supports digital wallets and payment systems. These applications use XLM to facilitate transactions. The network’s design keeps operations clear and low-cost.

Stellar focuses on security and speed. The consensus protocol uses trusted nodes. Each transaction goes through verification by multiple nodes. This process prevents fraudulent transactions.

The low fee structure discourages network spam. A small fee stops attackers from flooding the network. The network handles many transactions without slowing down.

The open nature of Stellar promotes transparency. Anyone can review the blockchain and track transactions. Transparency builds trust among users and institutions.

Community and partnerships

Stellar has an active community. Developers, investors, and users work together to improve the network. The community supports projects that expand the network’s use cases.

Many institutions join Stellar to support financial inclusion. Banks, payment providers, and non-profits use the network. They build partnerships that promote low-cost transfers. These partnerships help create a solid ecosystem.

The foundation works with groups to support network upgrades. They fund projects that help expand Stellar’s technology. This support helps the network grow in practical ways.

Final thoughts

Stellar (XLM) serves as an important tool in global payments. The network offers fast, low-cost transactions. XLM acts as a bridge for currency exchange and pays for network operations. The tokenomics focus on a stable supply and affordable fees. The vesting schedule helps maintain market stability.

Stellar supports a range of use cases. Financial institutions and individuals benefit from low transfer fees. Developers build simple applications that use the network. The community and foundation back growth and improvements.

1. 01.

   Is Steller (XLM) a good investment?

   

   Stellar (XLM) offers fast, low-cost transactions and has strong institutional support, which may appeal to long-term investors. It remains volatile and faces regulatory risks, so research and assess your risk tolerance before investing.

2. 02.

   How is Steller different from Ethereum? 

   

   Stellar focuses on low-cost cross-border payments and uses a consensus protocol that avoids mining. Ethereum supports complex smart contracts and decentralized applications and has a different consensus mechanism.