Stellar, or Stellar Lumens, is an open source,

decentralized Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group. Conce ...

protocol for digital currency to

fiat money Fiat money (from la, fiat, "let it be done") is a type of currency that is not backed by any commodity such as gold or silver. It is typically designated by the issuing government to be legal tender. Throughout history, fiat money was sometim ...

low-cost transfers which allows cross-border transactions between any pair of currencies. The Stellar protocol is supported by a Delaware nonprofit corporation, the Stellar Development Foundation, though this organization does not enjoy 501(c)(3) tax-exempt status with the IRS.

History

In 2014,

Jed McCaleb Jed McCaleb is an American programmer, entrepreneur and philanthropist. He is a co-founder and the CTO of Stellar. Prior to co-founding Stellar, McCaleb founded and served as the CTO of the company Ripple until 2013. McCaleb is also known for cr ...

, founder of

Mt. Gox Mt. Gox was a bitcoin exchange based in Shibuya, Tokyo, Japan. Launched in 2010, it was handling over 70% of all bitcoin (BTC) transactions worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the ...

and co-founder of

Ripple Ripple may refer to: Science and technology * Capillary wave, commonly known as ripple, a wave traveling along the phase boundary of a fluid ** Ripple, more generally a disturbance, for example of spacetime in gravitational waves * Ripple (electri ...

, launched the network system Stellar with former lawyer Joyce Kim. Before the official launch, McCaleb formed a website called "Secret Bitcoin Project" seeking alpha testers. The nonprofit Stellar Development Foundation was created in collaboration with Stripe CEO

Patrick Collison Patrick Collison (born 9 September 1988) is an Irish billionaire entrepreneur. He is the co-founder and CEO of Stripe, which he started with his younger brother, John, in 2010. He won the 41st Young Scientist and Technology Exhibition in 2005 a ...

and the project officially launched that July. Stellar received $3 million in seed funding from Stripe. Stellar was released as a decentralized payment network and protocol with a native currency, stellar. At its launch, the network had 100 billion stellars. 25 percent of those would be given to other non-profits working toward financial inclusion. Stripe received 2 percent or 2 billion of the initial stellar in return for its seed investment. The cryptocurrency, originally known as stellar, was later called Lumens or XLM. In August 2014, Mercado Bitcoin, the first Brazilian bitcoin exchange, announced it would be using the Stellar network. By January 2015, Stellar had approximately 3 million registered user accounts on its platform and its market cap was almost $15 million. The Stellar Development Foundation released an upgraded protocol with a new consensus algorithm in April 2015 which went live in November 2015. The new algorithm used SCP, a cryptocurrency protocol created by Stanford professor David Mazières. Lightyear.io, a for-profit entity of Stellar, launched in May 2017 as the commercial arm of the company. In September 2017, Stellar announced a benefits program, part of its Stellar Partnership Grant Program, which would award partners up to $2 million worth of Lumens for project development. In September 2018, Lightyear Corporation acquired Chain, Inc and the combined company was named Interstellar. In 2021,

Franklin Templeton Franklin Resources, Inc. is an American multinational holding company that, together with its subsidiaries, is referred to as Franklin Templeton; it is a global investment firm founded in New York City in 1947 as Franklin Distributors, Inc. It is ...

launched the first “tokenised” US mutual fund using Stellar.

Usage

In 2015, it was announced that Stellar was releasing an integration into Vumi, the open-sourced messaging platform of the

Praekelt Foundation Praekelt.org is an African nonprofit organization dedicated to using mobile technology to improve the lives of people living in poverty. It was founded in 2007 as an offshoot of Praekelt Consulting. Notable projects that the organization is invo ...

South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...

. Vumi uses cellphone talk time as currency using the Stellar protocol. Stellar partnered with cloud-based banking software company Oradian in April 2015 to integrate Stellar into Oradian's banking platform to add microfinance institutions (MFIs) in

Nigeria Nigeria ( ), , ig, Naìjíríyà, yo, Nàìjíríà, pcm, Naijá , ff, Naajeeriya, kcg, Naijeriya officially the Federal Republic of Nigeria, is a country in West Africa. It is situated between the Sahel to the north and the Gulf o ...

Deloitte Deloitte Touche Tohmatsu Limited (), commonly referred to as Deloitte, is an international professional services network headquartered in London, England. Deloitte is the largest professional services network by revenue and number of professio ...

announced its integration with Stellar in 2016 to build a cross-border payments application, Deloitte Digital Bank. In December 2016, it was announced that Stellar's payment network had expanded to include Coins.ph, a

mobile payment A mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device, as the cardinal class of ...

s startup in the Philippines,

ICICI Bank ICICI Bank Limited is an Indian Private bank. It is headquartered at Mumbai. It offers a wide range of banking products and financial services for corporate and retail customers through a variety of delivery channels and specialized subsidiari ...

in India, African mobile payments firm

Flutterwave Flutterwave is a Nigerian fintech company that provides a payment infrastructure for global merchants and payment service providers across the continent. History The company was founded in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adel ...

, and French remittances company Tempo Money Transfer. In October 2017, Stellar partnered with IBM and KlickEx to facilitate cross-border transactions in the South Pacific region. The cross-border payment system developed by IBM includes partnerships with banks in the area. The Lumens digital currency was ranked 13th in market capitalization at the time of the IBM partnership. In December 2017,

TechCrunch TechCrunch is an American online newspaper focusing on high tech and startup companies. It was founded in June 2005 by Archimedes Ventures, led by partners Michael Arrington and Keith Teare. In 2010, AOL acquired the company for approximately $ ...

announced Stellar's partnership with SureRemit, a

n-based non-cash remittances platform. On January 6, 2021, the Ministry of Digital Transformation of

Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...

announced cooperation and partnership with Stellar in development of Ukraine digital infrastructure, after which Stellar value increased by 40%.

Ecosystem

Stellar has an active community ecosystem and supports projects that utilize the Stellar Network with the Stellar Community Fund.

Overview

Stellar is an open-source protocol for exchanging money or tokens using the Stellar Consensus Protocol. The platform's source code is hosted on

GitHub GitHub, Inc. () is an Internet hosting service for software development and version control using Git. It provides the distributed version control of Git plus access control, bug tracking, software feature requests, task management, continu ...

. Servers run a software implementation of the protocol, and use the Internet to connect to and communicate with other Stellar servers. Each server stores a ledger of all the accounts in the network. 3 nodes are operated by the Stellar Development Foundation, in conjunction with 21 other organizations, providing for a total of 66 validator nodes. Transactions among accounts occur not through

mining Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic ...

but rather through a consensus process among accounts in a quorum slice. The current network fee is 100 stroops, equivalent to 0.00001 XLM.

References

External links