Stellar

Jed McCaleb and Joyce Kim co-founded Stellar and the nonprofit Stellar Development Foundation, publicly launching the network in July 2014. Its early code drew on RippleRippleRipple is an American fintech company, legally named Ripple Labs Inc., that provides banks, payment providers, funds, and businesses with blockchain- and digital asset-based cross-border payments, digital asset custody, a U.S. dollar stablecoin, prime brokerage, and corporate treasury management services. Its business makes extensive use of the public XRP Ledger blockchain and its native token XRP, but neither is the same as the company itself; from 2020 to 2025, the company fought a nearly five-year legal battle with the U.S. Securities and Exchange Commission over whether its XRP sales were unregistered securities offerings.Open the full entry, and the foundation received initial support from Stripe. It set out to improve financial access and enable low-cost transfers of value across borders.⁠[1]

The Stellar Development Foundation began as a nonprofit. Its early board included Keith Rabois, Patrick CollisonPatrick CollisonPatrick Collison is an entrepreneur who grew up in Ireland. In 2010 he cofounded the payments and financial infrastructure company Stripe with his brother John Collison and serves as its chief executive; he is also a cofounder of the biomedical research organization Arc Institute and has been a director of Meta since 2025.Open the full entry, Matt Mullenweg and Shivani Siroya. Stripe provided a $3 million loan in exchange for two billion early stellars. The foundation described its aim as expanding access to financial services rather than operating a deposit-taking bank.⁠[1]

Nonprofit status does not mean the network lacks commercial participants: wallets, exchanges, anchors, asset issuers and applications may charge their own fees and bear their own compliance responsibilities. The foundation maintains code, funds the ecosystem and holds XLM; these activities are distinct from each asset issuer's redemption obligations.⁠[1]

In 2014, the network initially reused and modified Ripple-related code. The foundation subsequently invited Stanford UniversityStanford UniversityStanford University is a research university in California founded by Leland and Jane Stanford in 1885 and opened in 1891.Open the full entry's David Mazières to design a new consensus protocol, migrating to SCP in 2015. Mazières authored the SCP paper; Jed McCaleb was acknowledged for inspiration and feedback, rather than listed as a co-author.⁠[2]

The migration illustrates that Stellar refers both to an evolving network and to software implementations from different periods. Early balances were carried forward into the later protocol, while the consensus algorithm, message formats and security arguments changed substantially.⁠[2]

At genesis, the network created 100 billion native units, initially called stellars and later lumens. Early plans envisaged distributing most of them free to individuals and partners, while retaining a portion to support the foundation. Those plans later changed; the 2014 targets do not describe the current supply.⁠[1]

David Mazières designed SCP around federated Byzantine agreement, allowing nodes to choose trusted quorum slices and reach safe consensus through quorum intersection. The network migrated to the new implementation in 2015, with a one-for-one claim arrangement for holders on the old network. SCP does not rely on mining, but its security depends on validator selection and quorum configuration.⁠[2]

Traditional BFT systems begin with an agreed membership list. SCP's federated Byzantine agreement allows each node to choose quorum slices sufficient to convince it. Overlapping slices form quorums; consistency and progress depend on conditions including sufficient quorum intersection.⁠[2]

The absence of mining does not remove the need for trust decisions. Node operators must assess their trusted sets, organizational independence and availability. Incorrect or highly correlated quorum configurations can halt the network. When it cannot safely reach agreement, the protocol favors stopping over producing conflicting ledgers.⁠[2]

Anyone can run a Stellar node, but its influence on consensus depends on whether other nodes include it in their quorum sets. Official explanations call for publicly verifiable node identities so operators can choose or exclude whom they trust. ConsensusConsensusConsensus is an annual cryptocurrency, blockchain, and Web3 industry conference hosted by the crypto media outlet CoinDesk (not the consensus mechanism of a blockchain). It was first held in New York in 2015 and later moved to Austin and Toronto; a Hong Kong edition was added from 2025, and since 2026 the main conference has been held in Miami.Open the full entry proceeds through nomination and voting rounds, generally confirming within a few seconds.⁠[3]

Node count alone therefore does not measure decentralization. Other considerations include the number of independent organizations carrying critical quorum responsibilities, correlated cloud providers and locations, historical archive capabilities, and whether quorum intersection survives removal of an organization.⁠[3]

A Stellar account is identified by a public key and stores balances, a sequence number, signers, thresholds and subentries. Transactions use increasing sequence numbers to prevent replay. Accounts can configure master-key weight and low, medium and high thresholds, with differently weighted signers supporting multisignature control and layered permissions.⁠[4]

Accounts must meet base reserve requirements. Subentries such as trustlines, offers and additional signers increase the minimum balance. Insufficient XLM may prevent creation of entries or cause transactions to fail. Multisignature security still depends on key custody, recovery procedures and threshold design.⁠[4]

XLM pays transaction fees, satisfies minimum account reserves and serves as a general medium of exchange. Other Stellar assets are defined by issuing accounts and can carry authorization and freeze rules. The native lumen has no ordinary asset-issuing account.⁠[5]

Apart from XLM, a Stellar asset is generally identified by its issuing account and asset code together. A user first establishes a trustline indicating willingness to hold a particular issuer's asset. Issuers can set authorization, freeze or clawback flags to meet the needs of regulated securities, stablecoins or redemption services.⁠[6]

Identical asset codes do not imply identical assets; the issuing account must be checked. A successful on-chain transfer proves a change in ledger balances, not the existence of bank deposits, gold or other off-chain backing, nor redemption at par. Those obligations depend on issuance terms and legal relationships.⁠[6]

Stellar incorporates offers and matching directly into the protocol, allowing accounts to place orders. Path payments let a sender pay one asset while the recipient receives another through conversions using order books or liquidity pools. Atomic execution means the entire path either completes or rolls back.⁠[7]

A protocol-level DEX does not guarantee deep liquidity or eliminate slippage. Thin order books, restricted trustlines, issuer freezes, long paths and front-running can affect execution. Users should set strict maximum send amounts or minimum receive amounts and verify issuing accounts.⁠[7]

Anchors connect bank accounts, cash networks and other payment channels to Stellar. They accept fiat, issue corresponding on-chain assets, handle redemption and perform KYC/AML checks. Standards including SEP-6, SEP-10, SEP-12, SEP-24 and SEP-31 cover programmatic deposits and withdrawals, authentication, customer information, interactive on/off ramps and cross-border payments, respectively.⁠[8]

Anchors are explicit trust and compliance boundaries, not intermediaries replaced by consensus. Users face custody, solvency, jurisdiction, fee and operating-hour risks. The network can settle tokens but cannot compel an anchor to deliver off-chain funds.⁠[8]

Stellar anchors are on/off-ramp providers connecting banks, cash outlets and the blockchain. They can accept fiat and issue redeemable tokens or process redemption. SEP standards coordinate KYC, authentication, quotes and payments, while asset credit risk remains with the particular issuer and anchor.⁠[9]

Stellar can host USDC issued by Circle. The asset uses Stellar's fast settlement and low fees, while dollar reserves, redemption, address restrictions and compliance policies remain governed by the issuer's arrangements. XLM is the native asset; USDC represents an on-chain dollar liability identified by a specific issuing account. They convey different economic rights.⁠[10]

When a wallet displays USDC, users should verify the issuing account and service provider to avoid counterfeit assets with the same code. Versions on different chains are not interchangeable merely because their codes match. Bridged assets, native issuance and exchange balances have different custody and redemption paths.⁠[10]

In 2021, MoneyGram and SDF announced plans to connect MoneyGram's retail network to Stellar, using USDC for cash deposits, cash payouts and near-real-time backend settlement. The service subsequently expanded across supported wallets and countries. At participating outlets, users can convert cash into Stellar USDC or redeem it for local currency.⁠[10]

Country and outlet coverage, wallet eligibility, identity checks, limits and fees vary by location. Near-real-time primarily describes the backend settlement objective; it does not guarantee that every counter transaction avoids queues or compliance checks, or executes at a fixed exchange rate.⁠[10]

Stellar Aid Assist allows aid organizations to distribute stablecoins in bulk to recipients' self-custodial wallets through the Disbursement Platform. Recipients can hold or transfer the funds, or cash out through participating MoneyGram channels. The design seeks to reduce prepaid-card logistics and make fund flows traceable on-chain.⁠[11]

Aid organizations still determine eligibility, and wallets or cash-out services may require identity information. Public-ledger transparency creates tensions with recipient privacy. Device loss, key recovery, internet access and local stablecoin rules also determine practical usability.⁠[11]

Official documentation dated July 21, 2026 listed an initial 100 billion XLM, approximately 5.444 billion added through historical inflation, and roughly 55.442 billion cumulatively burned, leaving a total supply of about 50.0018 billion. Approximately 34.169 billion were circulating, and 15.564 billion were held under the SDF mandate, with additional upgrade reserves and a fee pool.⁠[5]

These figures can change through foundation distributions, account merges, fee burning and network upgrades. Total supply, circulating supply, foundation holdings, exchange custody and amounts available for sale are different measures. Reporting dates must accompany figures; live market-data figures should not be used to reconstruct historical supply.⁠[5]

Stellar initially expanded supply by 1% annually. Validators voted to end inflation in October 2019. That November, SDF burned approximately 55.4 billion XLM by sending them to an address without signers, substantially reducing total supply. The burned assets belonged to the foundation; the action did not proportionally reduce every user's balance.⁠[5]

Each operation requires a base fee. When pending transactions exceed ledger capacity, surge pricing prioritizes transactions by the fees they offer. Fees enter a fee pool rather than rewarding validators, and the associated XLM can be addressed through protocol upgrades. Stellar has neither mining nor XLM staking for consensus rewards.⁠[12]

A low base fee is not a fixed dollar cost. Complex transactions contain multiple operations, congestion increases fees, and smart contracts incur resource charges for CPU, memory, ledger reads and writes, and events. Wallets should estimate and cap fees rather than equate low fees with no fees.⁠[12]

SDF's 2019 mandate divided resources among categories including direct development, ecosystem support and use-case investment, with published XLM budgets. Foundation holdings may fund employees, suppliers, grants or investments, but token holders do not thereby control the protocol through token voting.⁠[13]

Validators accept protocol upgrades through their software and network settings. SDF can write code, issue release candidates, coordinate discussions and provide defaults, but holding XLM does not directly confer consensus votes. Its practical influence may nevertheless derive from core development, branding, funding and critical infrastructure, alongside formal validator voting.⁠[13]

On May 15, 2019, Stellar stopped closing ledgers for 67 minutes because it could not reach consensus; no transactions were processed during that period. It resumed from the existing ledger without a fork or corrupted balances. The foundation's postmortem cited unstable validators, with Keybase maintenance downtime triggering the interruption and exposing deficiencies in quorum configuration and monitoring.⁠[14]

The incident illustrated SCP choosing a safe halt when consistency and liveness conflicted. Preserved balances did not eliminate the availability risk. After recovery, critical validation responsibilities were temporarily concentrated among a few organizations, prompting improvements to monitoring, maintenance coordination and quorum-analysis tools.⁠[14]

On April 6, 2021, SDF's validators and public Horizon instance were unavailable for about ten hours, with some other nodes, including Lobstr, also affected. Other Tier 1 nodes maintained a sufficient quorum, and mainnet continued closing ledgers approximately every five seconds. Users dependent on SDF's public API could not submit or query transactions, but the ledger itself had not stopped.⁠[15]

The team identified a software issue and released a fix, followed by a validator vote to upgrade to Protocol 16. Unlike the 2019 network-wide halt, this event demonstrated that independent nodes could sustain consensus while also exposing public APIs and default infrastructure as potential concentrated failure points for users.⁠[15]

Protocol 20 introduced Soroban WebAssembly smart contracts to mainnet in 2024, adding contract storage, authorization, resource metering and fees. Classic payment operations coexist with Soroban contracts, with fee and resource competition handled through separate pools.⁠[16]

Soroban is a smart-contract platform integrated into the existing Stellar chain, not a separate sidechain. Contracts are primarily written in a restricted Rust dialect and compiled to WebAssembly. The host environment provides persistent storage, cryptography, cross-contract calls, resource metering and fee calculation. The CLI's local testing environment uses the same host implementation as the chain.⁠[17]

The restricted runtime aims to reduce the attack surface but does not eliminate contract vulnerabilities. Developers must still address authorization, storage lifecycles, reentrant interactions, precision, upgrades and external-asset risks. Deployment on Stellar does not give third-party contracts a foundation guarantee.⁠[17]

Validators approved Protocol 20 on February 20, 2024, beginning with Phase 0 for network observation. Phase 1 on February 27 allowed developer deployment and testing. A March 19 settings vote increased capacity for user-facing Phase 2. Describing February 20 as unrestricted availability of all smart-contract capacity would omit these risk controls.⁠[18]

Validators continue to vote on capacity, CPU, memory, fees and other settings. Phased deployment allows operators to observe load and means mainnet launch and target throughput can have different dates. Application status must be assessed against the specific protocol version and settings.⁠[18]

Protocol 23, Whisk, introduced state archival and capabilities related to parallel processing. Protocol 25, X-Ray, added zero-knowledge cryptographic primitives including BN254 and Poseidon. Protocol 26, Yardstick, went live in May 2026 and continued addressing edge cases and precision issues. Upgrades take effect through validator votes rather than unilateral foundation action.⁠[16]

Zipper proceeded through its planned mainnet upgrade, adding delegated account authorization and more robust address-bound credentials while advancing consolidation of JavaScript core libraries. Applications need to migrate legacy credential usage according to the upgrade guide; a compatibility period does not remove the need to adapt.⁠[19]

Stellar joined MetaMaskMetaMaskMetaMask is a self-custodial crypto wallet and consumer finance platform originating in 2016, co-founded by Dan Finlay and Kumavis. It expanded from a browser wallet connecting users to Ethereum applications into multichain asset management and stablecoin payments. On September 9, 2026, Consensys Software Inc. announced its rebranding as MetaMask and independent operation under Chairman and CEO Joseph Lubin.Open the full entry’s default networks at Meridian in Lisbon, going live that day. Existing Stellar users could import recovery phrases from other wallets.⁠[20]

SDF develops and funds the ecosystem, while validators maintain the network through quorum sets and protocol-upgrade votes. Risks include validator trust configuration, issuer defaults or freezes, anchor compliance, smart contracts, changes in reserves and fees, and XLM market volatility.⁠[2]