Stellar (XLM)

Stellar or Stellar Lumens (XLM) is a decentralized, open-source payment network. It uses a public blockchain network, enabling financial institutions, companies, and individuals to send and receive funds from its native crypto assets XLM. On July 31, 2014, this unique crypto platform was launched by former lawyer Joyce Kim and Jeb McCaleb. McCaleb was the co-founder of the payment protocol Ripple, and the founder of the crypto exchange Mt. Gox. Later, he left due to the conflicts about the future of the project. Later, this decentralized platform was developed by a non-profit organization “Stellar Development Foundation”. 

How Does Stellar Work?

Stellar, is a decentralized payment network specially designed to exchange money and crypto assets between different parties. With a distributed ledger system, Stellar’s blockchain enables fast, low-cost, and cross-border transactions. Further, this public ledger tracks the ownership of all the accounts, records every transaction, and confirms it by a network of computers called “nodes”. This can be done through its unique consensus protocol. 

Stellar Vs Ripple

Stellar was cloned from the Ripple concept. It shares similarities with the Ripple ledger and its XRP token. That is, like Ripple, Stellar is a payment network that aims to connect financial institutions and offers cross-border transactions at a reduced cost and time. Whereas, XRP targets centralized interbank settlements backed by Ripple. Ripple’s XRP has a higher market capitalization, favored by large financial institutions. On the other hand, Stellar XLM has a lower market capitalization, preferred by individual or business financial services. 

Technology Behind Stellar Network

The technology behind Stellar is its unique blockchain model. The technical design of the Stellar network employs the Stellar Consensus Protocol (SCP). This consensus protocol uses a network of nodes that validates each transaction. Unlike other blockchains, Stellar Consensus Protocol does not rely on Proof-of-Work algorithms to make it more energy-efficient. This unique blockchain uses XLM tokens as a transactional currency. Stellar Lumens are also considered an anti-spam mechanism and prevent the network from unwanted transactions. Besides XLM, the Stellar network supports custom tokens, representing other assets like fiat currencies, stocks, or commodities. As a result, users can trade various assets without the limitations of traditional finance systems. 

What is an XLM Token?

XLM Token or Lumens is the native currency of the Stellar network. It facilitates transactions on the Stellar blockchain and links the digital currencies between different fiat and crypto platforms. 

Is Stellar a Good Investment? 

Usually, Stellar is considered to be an underrated crypto investment. As it established some excellent partnerships and real-world usability, Stellar XLM could fortune with huge returns in the upcoming months. But, like other crypto assets, XLM has high volatility. Hence, before investing in XLM tokens, it's essential to curate an investment strategy. Here are some of the investment strategies for your knowledge. 

Stellar's Investment Strategies 

When you plan to invest in XLM, you need to consider how you want to invest. Further, you need to follow a set of strategies to make a positive move in the crypto world. 

1. Moving Average: Moving averages and trendlines are some of the technical indicators that can help investors plot the current price and upcoming market trends. If you are looking for long-term potential growth, then monitoring the Moving average on the daily chart is essential. 
2. RSI: Relative Strength Index is a momentum indicator that measures whether the Stellar is experiencing an Overbought or Oversold situation in the marketplace. This trend is essential to predict the potential market entry and exit point. 
3. HODLing: It is used to purchase and hold a crypto asset for the long term. To successfully incorporate this HOLD strategy, investors rely on XLM's price rise over time. 
4. Dollar-Cost Averaging: It is a process of investing a small amount of money in XLM on a regular basis. This strategy is one of the most trusted strategies that works well for all-level traders. 
5. Diversification: Diversification is one of the essential aspects when looking for investment risk-management strategies in the crypto world. To reduce the losses, investors should spread their investments in different coins. 
6. Invest what you can afford to lose: Crypto assets like XLM are high in volatility. Hence, fund it as much as possible or what you can afford to lose. 

Legal and Regulatory Consideration 2025

By 2025, it is expected that Stellar XLM could encounter a clear regulatory environment and proper government support for its blockchain technology and XLM coin. Hence, in the future XLM could hit a newer high and afford high returns to the investors. 

How to Buy and Trade Stellar XLM?

In order to buy or trade XLM, you need to know how to buy and trade in a simple and easy way. 

How to Buy XLM?

Investors who are looking to buy Stellar XLM can make a successful purchase through peer-to-peer trading platforms. Stellar is not widely available on the marketplace like Bitcoin or Ethereum. However, top crypto exchanges like Coinbase Global, Binance, eToro, and more are now allowing investors to purchase XLM on their platform. To purchase your XLM, register on any of these exchanges, get verified, fund it, and make a purchase. 

How to Trade XLM?

Investors who are seeking to sell their lumens can sell them on crypto exchanges like Bitget, Gemini, Binance, and more. 

• Create an account on a reputable exchange platform.
• Verify your identity
• Convert your XLM coins to USDT in the Spot market, sell it in P2P and cash out. 

Best Exchanges to Trade XLM

Some of the best exchanges to sell XLM are: 

• ProBit
• MEXC Global
• HTX Global
• Binance
• ByBit
• Bitget

Transaction Fees and Trading Costs

Stellar network is one of the low-cost payment platforms that costs a very small fee of 0.00001 XLM per transaction. 

Stellar XLM Wallets and Securities

A crypto wallet is a digital key that stores your private passwords to secure your crypto assets on the blockchain. Some of the best wallet forms to store the XLM coins are 

• Mobile Apps or Mobile Wallets
• Web Wallet or Web browser 
• Hardware Wallets
• Browser Extension Wallet

How to Secure Your XLM Holdings?

To secure XLM holdings, one of the most recommended methods is to use a Hardware Wallet. It is a cold storage to store your private keys, reducing significant risks and preventing online hacks. However, if you are looking for everyday use, users can use trusted and regulated software wallets. 

Hardware Wallet Vs. Software Wallet

Hardware Wallets

• For large XLM holdings, investors can prefer Hardware Wallet.
• Some of the most trusted wallets are: Trezor Model T and Ledger Nano X.

Software Wallets

• For convenient trading and transactions, choose reputable software Wallets. 

Note: Always backup your passphrase or seed phrase to recover your XLM or crypto assets. 

Custodial Wallet Vs. Non-Custodial Wallet for XLM

Custodial Wallet: A crypto exchange acts as a third party to store and manage users' private keys. 

Non-Custodial Wallet: The account owners are exclusively responsible for keeping the keys safe. 

Stellar Adoption and Use Cases

From cross-border payments to real-world tokenization, Stellar XLM is valued for powerful use cases. This drives many nations to adopt XLM in various sectors. Further, some of the key partnerships and collaborations are the main aspects of XLM's mass adoption in the marketplace. Here are the key partnerships of Stellar XLM.

• IBM
• Deloitte

Innovation in Stellar Ecosystem

Stellar Blockchain is designed to offer secure, safe, fast, and cost-effective financial transactions. That is, its main focus is promoting financial inclusion globally. The most crucial parts of the Stellar ecosystem are:

• Stellar Network
• Stellar Lumens (XLM)
• Nodes
• Anchors
• dApps

XLM Future Outlook and Potential Growth 

Based on the current market volatility, XLM is projecting price fluctuations at the moment. However, experts are predicting that Stellar XLM has a promising future in the marketplace. With ongoing adoption in the cross-border payment platforms and growing partnerships, XLM is demonstrating potential growth and long-term gains in the upcoming days. 

Pros and Cons of Stellar

Pros

• High transaction volume 
• Low-cost transaction fees
• Real-time cryptographic security in all Stellar operations 

Cons

• Regulatory Uncertainty 
• Banks and Financial sectors are cautious in adopting XLM

Final Thoughts 

Today, XLM is trading at $0.2526 which is a 5.41% decline in the last 24 hours. It doesn't mean Stellar XLM is experiencing a bearish momentum. As the market is volatile, XLM price keeps fluctuating. Investors and crypto enthusiasts should closely monitor the testing levels to find the exact time to invest to yield remarkable returns in the future. Since crypto investment involves certain risks, we suggest readers do deep research, and analysis to use proper risk management strategies.