What is Stellar (XLM)?

Deep Dive

1. Purpose & Value Proposition

Stellar aims to streamline global finance by connecting banks, payment systems, and individuals. It focuses on cross-border remittances and tokenizing assets like fiat currencies, stocks, and bonds. Institutions like Franklin Templeton use Stellar to tokenize funds (e.g., the $445M BENJI money market fund), leveraging its compliance tools for regulated markets.

2. Technology & Architecture

Stellar’s Proof-of-Agreement (PoA) consensus relies on a network of identifiable validators, prioritizing accountability over anonymity. Transactions finalize in 3–5 seconds, costing $0.00001 each. In 2024, Soroban smart contracts launched, enabling DeFi apps while maintaining energy efficiency. Protocol 23 (September 2025) introduced parallel processing, boosting scalability to ~5,000 TPS.

3. Key Differentiators

• Institutional Adoption: Partners include Visa (stablecoin settlements), IBM, and Archax (tokenized securities).
• Regulatory Compliance: Tools for KYC/AML make it a preferred network for RWAs.
• Sustainability: SCP’s low energy use contrasts with networks like Bitcoin or Ethereum.

Conclusion

Stellar is a blockchain optimized for financial infrastructure, prioritizing speed, cost, and institutional collaboration. Its focus on real-world utility—rather than speculative value—sets it apart. As global finance increasingly adopts blockchain, can Stellar’s compliance-first approach cement its role as a bridge between traditional and decentralized systems?