Editor’s note: This article has been corrected. Stellar’s decentralized exchange is built into Stellar.
While the developers of most cryptocurrencies are hoping their tokens will one day fly to the moon, the team behind it is Star lumens (CRYPTO: XLM) Has fixed her eyes on the distant stars. Well, that’s figurative, but the nonprofit Stellar Development Foundation came into play with the altruistic goal of creating a limitless blockchain payments network that would help the underfunded in poor and developing countries.
But his early investors also benefited greatly from the network. Those who initially bought a stake are now sitting on a staggering 15,000% return after seven years. XLM is now the 18th largest cryptocurrency in the world with a market cap of $ 7.5 billion. And that despite fierce competition from XRP (CRYPTO: XRP) and its developer Ripple Labs. So can new investors see the same interstellar surge in XLM price if they buy now?
A brief astrological story
XLM was founded in 2014 by Jed McCaleb and former attorney Joyce Kim. McCaleb previously co-founded XRP and Mt. Gox, the first Bitcoin (CRYPTO: BTC) Exchange in the world. McCaleb left Ripple Labs in 2013 after disagreeing with its vision of creating a for-profit, institutional payments network. Mt. Gox shut down in early 2014 after witnessing the mother of all bitcoin hacks – which resulted in hackers siphoning off nearly 800,000 BTC and going bankrupt.
At its inception, the founders planned to mint 100 billion stars and give 50% to users who sign up, 25% to charities, and 20% to both XRP and Bitcoin holders. Unfortunately, this plan never worked.
It was clear that the Stellar Development Foundation was not going to achieve its goals anytime soon. Biometric secured, telephone-based electronic payment systems as provided by South African fintechs Net1 UEPS technologies (NASDAQ: UEPS), are much easier to use and better meet the needs of those without a bank account. To use XLM, one must first understand blockchain technology, which can be a hard sell for people like warrior nomads in South Sudan. Also, keep in mind that once XLM users will still need to find an exchange to convert their coins to fiat. But often the only way to make a withdrawal is by making a withdrawal request on your own. to deliver Bank account.
Currently, XLM has a total supply of around 50 billion, with about half of it in circulation. At the time of this writing, only 4.6 million tokens worth approximately $ 412,650 have been donated to 17 charities under the foundation’s nonprofit arm, Lumenthropy. But that can’t be said of its commercial arm, Interstellar.
The galaxy is the limit
Together with the fintech start-up Tala Visa (NYSE: V) brings the USD stablecoin USDC (CRYPTO: USDC) to consumers on the ether, Algorand, Solana, and Stellar blockchains. The move would allow Tala’s customers to use USDC as a tender with more than 70 million merchants worldwide who accept Visa. Stablecoins can be taken out as asset loans when investors pledge their cryptocurrency as collateral so they can keep up with daily expenses without selling their investments. It’s not just Visa. Last year, the von der Heydt bank, one of the oldest European banks (founded in 1754), introduced the euro stablecoin EURB on the Stellar blockchain.
Transactions on the Lumens network are completed in just five seconds and cost less than pennies, making them ideal for international and consumer transactions. They are ideal for disrupting the traditional banking sector, which can charge high exchange fees for cross-border transactions. The setup works because the Stellar Consensus Protocol (SCP) uses nodes or individual users running Stellar’s software to validate transactions. This is done pro bono, similar to how writers on Wikipedia contribute to the good of all mankind without paying. Therefore, network transaction fees and environmental emissions are always low. The network is also no longer inflationary, new block issues are stopped and part of the transaction fees per use is withdrawn from circulation.
In addition, Stellar is evolving into a cyber organism different from that of its main competitor, Ripple Labs. For starters, it has its own decentralized exchange (DEX) that allows users to trade cryptocurrency pairs. Due to regulatory restrictions, DEXs are one of the few ways American investors can access the lucrative altcoin market. DEXs like Uniswap, which was launched in 2018, already has an annual trading volume of over $ 380 billion. That’s not all; Stellar also operates a fiat crypto gateway exchange that allows users to withdraw in euros or the Chinese yuan.
After all, unlike Ripple Labs, neither the Stellar Development Foundation, nor Interstellar, or any of their syndicates are facing a crippling lawsuit from the US Securities and Exchange Commission for the illegal sale of unregistered securities. Ironically, this is the case, even though Stellar minted all of its coins from the start, as Ripple Labs did with XRP. Therefore, due to regulatory scrutiny, there is no hesitation in accepting it. Overall, XLM is definitely one of the most popular cryptocurrencies right now due to its unique network setup, promising partnerships, expansion into decentralized finance, a distinct niche compared to XRP, and the lack of legal issues. Consider becoming a Lumenaut today, which is slang for a proud owner of XLM.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.