Many cryptos offer fast and inexpensive transactions, but Stellar stands out for its ability to work with any form of currency. Whether it’s the US dollar, euro, or Bitcoin- Stellar allows for transferring its digital representations.
While many aim to replace traditional financial systems, Stellar takes a different approach. Stellar has designed the network to enhance the global economic infrastructure. This is possible by providing a unified network where multiple systems can collaborate.
In this review, we will cover several key aspects that everyone needs to know if you are interested in Stellar.
What is Stellar?
Stellar primarily operates as a decentralized payments network, providing fast, secure, and cost-effective cross-border payment solutions. Launched in 2014, the Stellar network and its associated foundation work together to facilitate seamless transactions. And at the network’s core is the native cryptocurrency- Stellar Lumens ($XLM).
Using $XLM, users can conduct nearly instant transactions between different currencies and efficiently make cross-border payments. The Stellar network acts as a connector, enabling individuals, banks, and payment systems to securely and reliably move currencies.
Moreover, the network significantly reduces costs associated with traditional payment gateways and currency transfers, offering a more affordable alternative for users.
How Stellar Works?
Stellar incorporates a built-in protocol that seamlessly converts money sent through its network. The conversion process involves transforming the sent currency into Stellar Lumens ($XLM) and then into the desired coin or currency.
For example, if you send a payment in US dollars to a recipient in the UK, Stellar automatically converts the payment to $XLM, and the recipient can receive the payment in Euros. This entire conversion process takes only a matter of seconds, enabling effortless money transfers across the globe.
In essence, Stellar aims to become the ultimate remittance protocol in both traditional finance and Web 3.
How to be a validator in Stellar?
Stellar operates as a peer-to-peer network comprising nodes responsible for maintaining a shared distributed ledger. So, these nodes communicate with each other to validate and incorporate transactions into the ledger.
By employing Stellar Core, nodes work collaboratively to reach consensus, validate transaction sets, and apply them to the ledger. This process occurs at regular intervals, typically every 3-5 seconds. During this timeframe, nodes synchronize their activities, agree on the transactions to include, and update the ledger accordingly. So, there are three types of nodes:
1) Basic Validator
It tracks the ledger and submits transactions for potential inclusion. However, it cannot publish history archives. To participate in consensus and support the network’s decentralization, a Basic Validator requires a secret key and is involved in voting on and signing off on ledger changes.
2) Full Validator
A Full Validator performs the same functions as a Basic Validator but also publishes a History Archive. This archive contains comprehensive snapshots of the ledger, including all transactions and their outcomes. A Full Validator writes to an internet-facing blob store, such as AWS or Azure, to accomplish this.
While running a Full Validator is more complex and costly, it immensely contributes to the network’s resilience and decentralization.
An Archiver is a rare type of validator. It resembles a Full Validator regarding publishing network activity to long-term storage. However, unlike a Full Validator, an archiver does not participate in the consensus process. Although becoming a validator can be complex, there are comprehensive documentation and resources on the website.
How to buy XLM?
$XLM, the native cryptocurrency of Stellar, is actively traded on numerous exchanges worldwide. For instance, to acquire $XLM on Binance, follow these steps:
- Sign up for an account on Binance.
- Navigate to the “Funds” section and select “Deposits” to add funds to your account.
- Proceed to the “Trade” section and choose “Spot” trading.
- Search for a suitable $XLM trading pair.
- Opt for a “market order” to execute the trade at the current market price.
- Specify the desired amount of $XLM you wish to purchase.
- Click on the “Buy XLM” button to finalize the transaction.
That’s it! You have successfully bought $XLM on Binance following these steps.
Stellar and USDCs
Stellar has skyrocketed to become the new favorite playground for institutional investors in the payment blockchains scene.
Look at the website, and you’ll spot big names like Circle, the USDC-issuer, and the ever-popular Moneygram among the top dogs who have built their blockchain infrastructure on Stellar’s solid foundation.
To date, the supply of Stellar-based USDC has exceeded $83 million, with a substantial total payment volume surpassing $4 billion. Additionally, nearly 528,000 accounts with trust lines have been created, showcasing the increasing adoption and usage of the Stellar network.
But the exciting news came on December 15th, 2022, when the Stellar Development Foundation made a groundbreaking announcement. In a collaborative effort with the United Nations High Commissioner for Refugees (UNHCR), they embarked on a mission to provide much-needed cash assistance to Ukrainian refugees.
It represents a significant step forward in leveraging blockchain for humanitarian efforts. What sets this initiative apart is the utilization of USDC on the Stellar network as the chosen form of aid.
To facilitate this assistance, they harnessed the Stellar Aid Assist. This innovative blockchain-enabled solution enables aid organizations to support those in need efficiently. In this case, the program enables the delivery of USDC to refugees, which they can seamlessly redeem for local currency at any convenient MoneyGram location.
Besides, Stellar’s deliberate decision to harness the power of USDC as the chosen stablecoin for their aid program is not without reason. Concerns surrounding the reserves of competing stablecoin Tether (USDT) may have influenced this strategic move. By leveraging USDC, Stellar aims to ensure transparency and reliability, instilling confidence in the aid program and its recipients.
With the combined forces of Stellar, UNHCR, and the transformative potential of USDC, this initiative promises to make a substantial impact in improving the lives of Ukrainian refugees. It showcases how we can harness blockchain tech for positive change and demonstrates Stellar’s commitment to fostering financial inclusivity and humanitarian efforts.
How to Stake XLM?
$XLM cannot be mined. However, $XLM holders can earn rewards through various earn or lend programs offered by popular CEXs like Coinbase and Binance.
The specific amount of $XLM rewards you can earn will depend on factors such as the volume of assets you have locked in, the duration of the holding period, and the Annual Percentage Yield (APY) offered by the chosen CEX.
Moreover, it’s crucial to note that the asset’s value will also influence your earnings at the end of the staking period. If $XLM gained value during that time, you would have made profits. However, if the value decreases, the combined value of your initial $XLM and the rewards may be lower than your starting point. Let’s get to the juicy part! To start earning $XLM rewards and commissions on Binance, here are the steps to follow:
1. Go to Binance and deposit $XLM.
2. Navigate to the “Earn” section and select “Binance Earn.”
3. Search for Stellar ($XLM) and choose between the flexible or other available options.
4. Read and check the terms and conditions. Enter the volume of Stellar Lumens you wish to stake and click “Confirm.”
Voilà! You are now ready to start earning rewards on your $XLM holdings.
How to use Stellar’s Explorer?
Stellar Expert, the official ledger explorer and analytics platform for the Stellar Network, offers a clean, user-friendly, and intuitive website experience. Upon visiting the homepage, you’ll be greeted with various sections that provide valuable information and insights.
Source: Stellar Expert
The Assets Statistics section provides comprehensive data about different assets on the Stellar ledger. It offers a deeper understanding of the $XLM’s performance and usage within the network.
Additionally, you’ll find graphical representations of Network Stats, presenting visual data that helps you grasp the network’s dynamics and activity at a glance.
When using Stellar-Expert, you have the flexibility to search for specific information using different parameters. Whether you have a transaction hash, asset code, account address, or ledger sequence in mind, you can effortlessly enter these into the search bar to get more data.
Source: Stellar Expert
For example, when searching for a transaction hash, the platform generates a dedicated page displaying essential metrics such as the transaction’s status, the ledger account, sequence number, fees, signatures, and more.
This comprehensive view lets you gain insights into the specific transaction’s details and its characteristics. Also, Stellar Expert empowers users to explore the Network, providing them with the tools and information to delve into transactions, assets, and network statistics with ease and efficiency.
Undoubtedly, Stellar has an array of exciting opportunities on the horizon in the coming months and years. However, it is essential to acknowledge that it will also face its fair share of challenges.
One of the key challenges will be navigating the competitive landscape within its chosen space. Not only does Stellar contend with competition from Ripple, but it also faces competition from other platforms like OmiseGo.
The strategic partnerships with industry giants like IBM and the Ministry of Digital Transformation of Ukraine are remarkable and hold immense potential to propel Stellar’s success.
The future of Stellar ($XLM) undeniably appears bright and “stellar” as it continues to advance and make its mark in the ever-evolving landscape of Web 3.
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