Stellar XLM, better known as Stellar Lumens, is one of the oldest projects in crypto. They are just quietly doing their thing in the background so they don’t get a lot of attention like some projects with huge VC backing but no transactions to speak of yet. So today we will take a closer look at this project.
What is Stellar XLM?
This is as good a place to start as any. Stellar has always had a close association with Ripple, for better or worse. Both are payment networks. Both are open-source to encourage others to build their own assets or use their rails for payments. Both feature former controversial Ripple co-founder Jed McCaleb.
In fact, McCaleb left Ripple, forked it, and that’s how he started Stellar XLM. XLM is the name of the token which is the blockchain’s native asset. You use it for payments or liquidity as it can pair with any other asset on the network.
The exchangers on Stellar are called anchors and every new asset on Stellar XLM needs one in order to function and trade. The only asset that does not need an anchor is XLM. It can trade anywhere on the network. They are working to bridge real-world assets into crypto like a crypto native digitized version of a national currency or a CBDC. Many are not aware but it’s a top 30 project by market value.
Where to Buy Stellar XLM
According to our friends at CoinGecko, the top 4 exchanges in trading volume for Stellar XLM are:
- And Digifinex
What’s interesting about this list is Coinbase. With Stellar Lumens listed on Coinbase, that means it’s one of the few that Americans can buy directly and easily.
Is Stellar XLM a good investment?
At the time of writing, Coingecko says that 25 billion of 50 billion tokens are in the circulating supply. Normally, half the tokens out there in the market would be a good thing. However, the token supply schedule tells a different story. Since the rewards are premined, it means that tokens only get into the circulating supply when existing holders sell their tokens. The last 7 billion tokens will hit the market or the development fund and partnership programs between October 15th and the end of 2022. That’s a lot of tokens. With no vesting or distribution schedule, anyone can sell any amount of XLM they have at any time. So this last 7 billion, which is 14% of the total supply coming online within a 3-month period is a big negative for potential investors.
Which is Better Stellar or Ripple?
Here it depends on what you mean by better. In my own opinion, not Altcoin Buzz but my personal opinion, Ripple has the worst tokenomics of any project in all crypto. That their executives can do quarterly programmed sales to get rid of their bags on retail investors is criminal. In fact, McCaleb himself sells a specific amount of his Ripple holdings every quarter. So does Chris Larsen, co-founder. Sadly, it looks like Stellar XLM could do the same. But so far they haven’t. So that would make Stellar better in a major way.
Early Bitcoin lender Bitbond made its first security offering by issuing a bond on the Stellar XLM blockchain. The bonds were a success so that’s a sign of projects using XLM how it’s intended.
Looking at the technicals, XLM is trading at 10 cents and is down 75% from its November high during this bear market. Ripple’s XRP is down about 60% from its November high. Neither has been able to hold on during these tough market conditions. Of the two, I think Stellar XLM is the more transparent project but I think Ripple has more adoption and more projects on its chain.
What is Stellar XLM Used for?
Well as I said above, it’s used mostly as a payments network. Their build your own asset aspect of their chain is the most popular. CBDCs or possibly stablecoins like a digital Euro or pound to compete with Tether or Circle are an obvious area that Stellar XLM could try to exploit. Another is real-world assets like stocks and mutual funds. They could be digitized or using oracles like Chainlink to create synthetic versions is another area. Mirror Protocol was getting lots of investor interest before the LUNA implosion. Stellar could step in here.
And that’s our first look at Stellar Lumens. Here is the second part.
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