Stellar in Detail: Everything you need to know about XLM and its features

The XLM cryptocurrency created on the Stellar platform is not like all other coins. Unlike traditional blockchain blockchains, Stellar is focused on multi-currency transfers and interaction with financial institutions, while also offering minimal fees and high transaction speeds. Thanks to its open source and decentralized network, XLM is used to create tokenized assets, attract investments and develop innovative financial solutions. In this article, we will understand how the Stellar ecosystem works, its advantages and opportunities for users.

Table of Contents:

1. What is the Stellar cryptocurrency
2. Features of Stellar lumens cryptocurrency
3. Where to get Stellar cryptocurrency
4. Ways to earn cryptocurrency
5. Where to store Stellar Lumens?
6. Advantages and disadvantages of Stellar cryptocurrency
7. Frequently asked questions about Stellar cryptocurrency

What is the Stellar cryptocurrency

Today, there are numerous types of digital currencies. Some are designed as alternatives to fiat money, while others serve as a payment method for purchasing goods. However, most of them share a key advantage — decentralization. This means there is no single, centralized authority controlling their issuance.

For instance, XLM, the cryptocurrency of the Stellar platform, is primarily used for converting various digital assets. Its unique technology enables fast and efficient transactions, which is particularly beneficial in cases where direct exchanges are not possible.

Stellar’s cryptocurrency allows for near-instant transactions with minimal fees. It has gained significant popularity in the business community and is backed by the American company Stripe.

In 2012, Ripple (XRP) was launched — a blockchain specifically designed for the banking sector. Blockchain engineers recognized the potential of integrating payment systems with currency conversion within a single service. Then, in 2014, after Ripple developers made the XRP code open-source, a hard fork emerged, giving rise to Stellar coin (XLM). Shortly after, a major transition to a new protocol took place. The creator of the hard fork, Jed McCaleb, named the Stellar network’s native currency “Lumens.”
The crypto community welcomed the altcoin warmly, giving it plenty of positive feedback. It even earned the nickname “Ripple done right.”. The founder of Stellar Lumens, who worked for a long time in the company Ripple Labs, announced at once that the launched project does not pursue any commercial goals. The ecosystem is controlled by the independent firm Stellar Development Foundation. Due to the fact that XLM is open source, any user who knows programming can take part in the modernization of the service.

The company is led by:

1. Patrick Collison, who serves as Chief Executive Officer.
2. Nicholas Barry, Master of Applied Mathematics and Computer Science. Nicholas also holds a Coursera certificate in AI Planning and Machine Learning. As Chief Technology Officer, he is responsible for the high-level system architecture, including scalability, security, and resilience. He also managed the core release schedule and oversaw the project’s roadmap.
3. David Mazieres, Chief Scientist, specializing in information security systems.

Features of Stellar Lumens cryptocurrency

The foundation of Stellar is a decentralized blockchain platform with asset conversion capabilities. This means users can create their own stablecoin, which can be freely traded on crypto exchanges. These coins can be converted into any fiat currency (USD, EUR, CNY) as well as other assets like gold and securities.

For example, a user can issue a digital equivalent of the US dollar, naming it a dollar token. Its value is pegged 1:1 and backed by an equivalent deposit. The token can be used for any transaction just like traditional currencies, but with key advantages — faster transactions and lower fees.

Stellar’s core purpose is to facilitate seamless transfers and account creation. The minimum transaction fee is just 0.00001 units, and accounts must hold at least 1 XLM.

The system also supports multi-conversion, allowing users to exchange assets directly during transactions.

Advantages of the platform:

• High speed.
• Low transaction fees.

Traditional transactions (e.g. transfer without conversion) are also available to the user.

Where you can get the Stellar cryptocurrency

The most important disadvantage of the Stellar cryptocurrency is the impossibility of its mining. From the very launch of the project, the final number of Stellar issued was announced – 100 billion coins. In November 2019, it was decided to halve the tokens in order to protect against inflation. Today, there are about 20 billion coins in circulation.

The most obvious ways to acquire Stellar are an exchange and a crypto exchanges. But what if you want to get Lumens without spending fiat money? There are several ways to do that.

Trading

Short-Term Trading (Day Trading, Scalping)

Concept:

Buying and selling XLM within a single day or even within minutes/hours to profit from small price movements.

Tools:

• Charts: TradingView, Binance
• Indicators: Moving Averages, RSI, MACD
• Key Levels: Support and resistance levels

Tips:

• Look for volatile periods (news, events)
• Use a stop-loss to minimize risks
• Avoid trading with your entire deposit

Pros: High profit potential

Cons: High risk, requires constant monitoring

Swing Trading

Concept:

Trading on medium-term price fluctuations (days, weeks).

Tools:

• Fibonacci, Bollinger Bands
• Trend lines
• News background

Strategy:

• Buy XLM at a support level
• Sell at resistance
• Use stop losses to protect capital

Pros: Less stressful than day trading.

Cons: Requires patience, capital is frozen for a while

Arbitrage Trading

Concept: 

Buying XLM on one exchange (where the price is lower) and selling on another (where the price is higher).

Required:

• Fast transfers between exchanges
• Tracking price differences (CoinMarketCap, CoinGecko)
• Minimization of commissions

Pros: Almost risk-free strategy

Cons: Exchange commissions, difficult to execute.

Leverage Trading (Margin Trading)

Concept: 

Using leverage to increase potential profits.

Example:

• You have 100 USDT, but you take 5x leverage → you have 500 USDT
• If XLM rises by 5%, you earn 25%.
• But if it falls by 5%, you lose 25%

Risks:

• High volatility can lead to liquidation
• Recommended for experienced traders only

Automated trading (bots)

Essence: 

Using trading bots (3Commas, Cryptohopper, Pionex) for automatic trading according to set strategies.

Opportunities:

• Arbitrage
• Scalping
• Grid trading

Pros: Saves time, passive income.

Cons: Needs to be customized, possible losses in case of bad settings

Futures and Options

Concept: Trading contracts, not the XLM itself.

Opportunities:

• Shorting (making money on a drop in price)
• Risk hedging

Cons: High risks, suitable only for professionals

Long-term investments (HODL)

Concept: Buying XLM for the long term (months, years), expecting to see an increase in price.

Strategy:

• Analyzing fundamental factors (partnerships, Stellar blockchain development)
• Buying on corrections
• Portfolio diversification (not only XLM)

Pros: Less time for analysis

Cons: May have to wait a long time for profits

The price of the coin has increased more than 150 times from its launch to February 2025 – from $0.002 to $0.31. According to analysts’ forecasts, Stellar will continue to grow in value, and XLM is likely to reach $1 and higher.

Contribution to community development

In the Stellar ecosystem, there are several programs designed to reward participants for their contributions to the development and governance of the community. Below are the main ones:

1. Stellar Community Fund (SCF): This program aims to support developers and startups building projects on the Stellar network. SCF offers two types of rewards:
   • Kickstart Award: Aimed at early-stage projects, it helps teams refine their concept and achieve product-market fit after completing a preparatory course.
   • Build Award: Designed for more advanced projects, this funding covers the key development costs for launching and growing the project.
2. Bug Bounty Program: Individual developers who discover vulnerabilities and exploits in the Stellar protocol or any of its code repositories can receive rewards of up to $250,000 in XLM. For potential exploits found in the Soroban platform, rewards of up to $50,000 are available, paid in USD.
3. Marketing Grants: The Stellar Development Foundation (SDF) offers grants of up to $100,000 in USD, USDC, or XLM to support the growth and user acquisition of projects built on the Stellar network. The funds can be used for digital and offline marketing, in-game incentives, PR, and communications.
4. Academic Research Grant: Students and researchers can receive grants of up to $150,000 in USD for research proposals that align with SDF’s goals, such as financial inclusion, fast and low-cost international payments, and other beneficial applications of distributed ledger technology.

Where to store Stellar Lumens?

For secure storage of Stellar Lumens (XLM), there are several types of wallets you can use.

Web Wallets

For those looking for a convenient way to manage their Stellar Lumens (XLM), web wallets are an excellent choice, especially for frequent transactions. However, it’s important to note that since they are connected to the internet, they may not be as secure as hardware or desktop solutions.

One of the popular web wallets for XLM is stellarwallet.co. It allows you to create new Stellar wallets and manage your coins directly through the browser, without the need to install any additional software. Key features of this wallet include:

• Secure storage: Your private keys remain solely with you, giving you full control over your funds.
• Instant transfers: Nearly instantaneous transactions with minimal fees.
• Direct interaction with the blockchain: The ability to interact directly with the Stellar network.
• Automatic synchronization: Seamless transition between devices with an updated balance.
• No verification required: No KYC requirements or need to provide personal information.

Hardware Wallets

The best option for long-term storage, as the keys remain offline.

• Ledger Nano S/X – Popular hardware wallets that support XLM.
• Trezor Model T – Also supports Stellar Lumens.

Mobile and Desktop Wallets

• Solar Wallet – An open-source wallet for Android, iOS, and desktop PCs.
• Keybase – A messaging app with built-in XLM wallet support.
• Foxlet – A lightweight desktop wallet designed for XLM storage.

When choosing a wallet, it’s important to consider the level of security, ease of use, and access to private keys. For maximum protection, hardware wallets or web solutions with two-factor authentication are recommended.

Advantages and Disadvantages of Stellar Cryptocurrency

Stellar was designed as one of the most powerful and user-friendly tools for global transactions. It integrates banking tools developed by Ripple and operates on its own protocol.

Pros:

• High transaction speed: Transactions are completed in seconds, and unlike Bitcoin, the transfer is immediately sent to the validator.
• Low energy consumption: Since there is no mining involved, there are no electricity costs. Additionally, the implementation of the Stellar Consensus Protocol makes transaction verification on the Stellar network more energy-efficient compared to Proof-of-Work (PoW) consensus algorithms.
• Easy access: Transactions can be carried out even in countries where cryptocurrency (including Stellar) is banned.

Cons:

• Imperfect security system: The network becomes unstable at any suspicion of a DDoS attack.
• High inflation for digital currency: The annual price drop for Stellar cryptocurrency is 1%.
• Low return on running a node: The profitability of maintaining a node is relatively low.

Mainly used in economically underdeveloped African countries, with the exception of tech giant IBM, which has been working with the platform since 2017.

It is easier and less expensive to use XLM for launching an ICO campaign compared to Ethereum. A few startups have created blockchains, but they don’t yet represent serious value.

Frequently Asked Questions about Stellar Cryptocurrency

What backs Stellar cryptocurrency?

Stellar doesn’t have any direct ties to fiat currencies or other assets. However, its relative price stability is supported by the ongoing development and expansion of its decentralized network, as it operates with open-source code.

Why is there a minimum balance requirement?

This is an effective way to combat duplicate spam accounts. When opening a deposit, users are required to deposit 1 Lumen. Adding a new asset will require an additional reserve of 0.5 Lumens.

Should I buy Stellar?

XLM is a promising altcoin. Some analysts even predict that it could rival its main competitor, Ripple. Considering its solid marketing strategy, partnerships with reputable companies, and focus on reaching a wide user base, the project is expected to gain popularity and, naturally, increase the value of the asset.