Stellar (XLM) is a blockchain network designed to enable fast, low-cost cross-border payments and promote financial inclusion. Launched in 2014 by Jed McCaleb and Joyce Kim as an open-source alternative to Ripple, Stellar is governed by the nonprofit Stellar Development Foundation (SDF). Its mission: reduce poverty by making financial services accessible to the unbanked and underserved around the world.

Stellar’s Mission & Ecosystem

A decentralised network, Stellar allows seamless movement of money globally—no intermediaries or geographic barriers needed. It supports over 180 currencies, enabling users to bridge fiat and digital assets easily through partner anchors like IBM, Stripe, ICICI Bank, and Coins.ph. Stellar’s appeal lies in speed, cost-efficiency, and inclusivity—notably for emerging and developing economies.

Advantages for Payments

• Ultra-low fees: Transactions cost as little as 0.00001–0.000002 XLM (fractions of a cent.

• Fast settlement: Payments settle within 2–5 seconds, far faster than traditional systems.

• Global coverage: The network facilitates connections across currencies and regions via a broad anchor ecosystem.

• Transparency and trust: A public ledger ensures clear, traceable transactions, ideal for remittances and aid distribution.

• Partnerships expanding utility: Collaborations with MoneyGram, Mastercard (via Crypto Credential), and stronghold-like initiatives position Stellar as a trusted infrastructure for emerging markets.

Stellar Consensus Protocol (SCP) and Governance

Stellar uses the Stellar Consensus Protocol (SCP), based on a Federated Byzantine Agreement (FBA). This consensus model provides:

• Decentralisation

• Low latency

• Flexible trust

• Security against malicious actors
  It allows network nodes—including user-chosen quorum slices—to validate transactions efficiently and securely.

Tokenomics & Inflation

At launch, Stellar created 100 billion XLM, with an annual inflation rate of 1%. Unlike ICOs, token distribution was achieved through airdrops to users, organizations, and early supporters, with remaining tokens reserved for ecosystem growth. Inflationary XLM is distributed via community voting—accounts receiving more than 0.5% of votes collect a proportional share.

Expanded Use Cases & Institutional Adoption

Cross-Border Remittances

Global remittance flows surpassed $700 billion in 2023, expected to exceed $800 billion by 2025. Traditional corridors suffer from high fees (6–9%) and slow settlement times. In contrast, Stellar-based solutions, such as SureRemit, have delivered 60% fee reductions in corridors like Nigeria-to-Ghana and welcome unbanked users via mobile wallets.

Institutional Partnerships & Asset Tokenization

• Stellar powers IBM’s World Wire project, enabling real-time transfers across borders via the Stellar network.

• Emerging projects target $3 billion in Real-World Assets (RWAs) by 2025, up from $290 million, through collaborations with MoneyGram, UNHCR, Paxos, and tokenization platforms.

Decentralized Finance (DeFi) Growth

Built-in DEX (decentralized exchange) capabilities allow users to trade assets quickly and with transparency. The introduction of Soroban smart contracts has driven over 700% growth in DeFi activity on Stellar.

Humanitarian & Emerging Markets Use

Stellar is used in aid delivery—like UNHCR’s Aid Assist—reducing costs by 25% in regions like Syria and Argentina. Anchor networks such as Chipper Cash also enhance Stellar’s reach in Africa, popularizing the network among 5+ million users across Ghana, Nigeria, and Rwanda.

Conclusion

Stellar (XLM) stands out in the blockchain space as a scalable, affordable, and inclusive platform for global payments. With institutional pipelines, immigration corridors, and DeFi expansion strengthening its ecosystem, Stellar isn’t just a crypto asset—it's a viable infrastructure layer for global digital finance and economic empowerment.