Stellar is an open-source, decentralized Layer 1 blockchain designed to connect digital assets, applications, and existing financial infrastructure. Launched in 2014, the network supports payments, asset issuance, tokenization, decentralized finance (DeFi), and smart contracts.
The Stellar Development Foundation (SDF), a nonprofit organization, supports the development of the network and its ecosystem. However, Stellar itself is a public blockchain operated by independent network participants rather than a payment company or centralized exchange.
XLM, also known as a lumen, is the native cryptocurrency of Stellar. It has several protocol-level functions:
- Transaction fees: fees on the Stellar network are paid in XLM.
- Account reserves: Stellar accounts must maintain a minimum XLM balance based on their ledger entries.
- Smart contract storage: XLM is also used to fund rent associated with smart contract data stored on the network.
Unlike assets issued on Stellar, XLM has no issuer and does not require a trustline to hold it.
For a more detailed introduction to the network, read our guide to what Stellar is and how XLM works.
How does the Stellar network work?
Stellar does not use Bitcoin-style Proof of Work or Ethereum-style Proof of Stake. Instead, validators reach agreement through the Stellar Consensus Protocol (SCP), which is based on Federated Byzantine Agreement.
Each Stellar Core validator chooses other nodes it considers important for reaching agreement. Overlapping groups of trusted nodes allow the network to reach consensus without mining or staking-based validator rewards.
This design also means XLM is not a Proof-of-Stake token: holding XLM does not give a user the ability to validate transactions or earn native staking rewards simply by locking up the asset.
Stellar also includes several financial functions directly at the protocol level. Its Stellar Decentralized Exchange (SDEX) maintains on-chain order books for assets, while liquidity pools can provide additional routes for conversions.
One particularly useful feature is path payments. A user can send one asset while the recipient receives another, with the payment automatically crossing available SDEX orders or liquidity pools along the way. A path can involve several conversions before the final asset reaches the recipient.
What can Stellar be used for?
Stellar's infrastructure supports several types of financial applications:
- Payments and transfers: applications can use Stellar to move digital assets between accounts.
- Stablecoins: issuers can create fiat-linked assets on Stellar and define controls governing their use.
- Real-world assets: financial products such as tokenized funds, bonds, equities, and commodities can be represented on the network.
- On- and off-ramps: organizations known as anchors connect Stellar-based assets with traditional financial rails.
- DeFi and smart contracts: Soroban, Stellar's integrated smart contract platform, enables developers to build programmable applications using Rust-based contracts.
Stellar's role in asset issuance is especially important when looking beyond XLM itself. An issued asset normally requires a trustline, which represents an account's explicit decision to hold a particular asset. XLM is different because it is native to the protocol and requires neither an issuer nor a trustline.
For more on tokenization, see our guide to Stellar and real-world assets. You can also explore supported RWA-related cryptocurrencies and exchange offers in the SwapSpace RWA hub.
How does Stellar connect crypto with traditional finance?
Another distinctive part of the Stellar ecosystem is its anchor infrastructure. In Stellar terminology, anchors are on- and off-ramp providers connecting blockchain assets with existing financial rails. Depending on the service, an anchor can accept fiat deposits and provide corresponding digital assets or redeem supported tokens for their underlying real-world assets.
Stellar also uses standardized Stellar Ecosystem Proposals (SEPs) to help wallets, exchanges, issuers, and financial services work together. Examples include standards for deposits and withdrawals, authentication, KYC information, cross-border payments, and exchange-rate quotes.
This infrastructure helps explain why Stellar is used for more than transferring XLM: the network is designed to connect blockchain applications, issued assets, and financial services.
How can you get and store XLM?
XLM can be purchased with fiat or exchanged for another cryptocurrency. On SwapSpace, you can buy XLM with fiat or compare crypto-to-crypto exchange offers on this page.
Popular routes include BTC to XLM, ETH to XLM, USDT to XLM, and XRP to XLM, subject to current provider availability.
To hold XLM crypto, you need a Stellar wallet compatible with the Stellar network. Examples include Stellar-focused wallets such as Freighter and LOBSTR, while hardware wallets such as Ledger and Trezor also support XLM cryptocurrency. Before withdrawing XLM, verify the network, destination address, and any memo requirements.
XLM news, ETFs and future price outlook
Network fundamentals are only one part of evaluating XLM as a crypto asset. XLM news about protocol upgrades, adoption, asset issuance, regulation, and new integrations can influence market sentiment, but network growth does not guarantee that the XLM price will increase.
The same distinction matters when researching an XLM ETF or other exchange-traded product. Such a product can provide financial exposure to XLM without giving an investor XLM held directly in a Stellar wallet. Its structure, fees, custody arrangements, availability, and investor rights depend on the individual product and jurisdiction.
Long-term forecasts should also be treated cautiously. A Stellar price prediction doesn’t provide XLM price prediction 2026 or XLM price prediction 2030 but represents a possible outcome based on your estimates. XLM's market value can be affected by crypto market conditions, demand for the asset, network activity, regulation, liquidity, and investor sentiment.
You can use the live market data on this page to check the current XLM price, market capitalization, trading volume, and recent price movements before comparing Stellar exchange offers.
