What is Stellar?

Modified on Fri, 15 Mar 2024 at 12:51 PM

The open-source decentralized protocol Stellar (XLM) allows for cryptocurrency-to-fiat and vice versa transfers. The purpose of this is to enable easy, fast, and secure cross-border transactions between any pair of currencies. The development of this protocol is backed by a non-profit organization called Stellar Development Foundation. Its monetary unit is called Lumen, and it is the native cryptocurrency of this network.

Unlike Bitcoin's blockchain, this blockchain is not designed to be used as a direct means of payment. Rather, it is designed to be an intermediary in currency conversion. In this sense, it aims to compete directly with Ripple (XRP). Additionally, the Lumen is a non-mineable cryptocurrency, and initially, 100 billion tokens were created. These tokens are held by the Stellar Development Foundation. This foundation's mission is to distribute 95% of the tokens. Divided among; random individuals (50%), companies or ecosystem organizations (25%), holders of Bitcoin or Ripple (20%). The remaining 5% is reserved to cover the operating costs of the foundation and to continue its development.

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