Summary: This article delves into the fascinating world of Stellar from its inception at Ripple to its independent development. Join us as we explore Stellar's unique features, it's partnerships with major companies and the potential use cases!
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Stellar History
Stellar is a blockchain designed to facilitate fast and low cost cross-border transactions. It was founded in 2014 by Jed McCaleb, the co-founder of Ripple and Joyce Kim, an entrepreneur and venture capitalist.
Stellar website
The history of Stellar can be traced back to its early days when it was developed as a non-profit called Stellar Development Foundation (SDF).
The project was initially created as a fork of the Ripple protocol but later evolved into its own independent blockchain platform.
The main aim of SDF was to address the global issues associated with expensive and time-consuming cross-border transfers.
By leveraging distributed ledger technology, Stellar aimed to enable individuals and financial institutions to send and receive payments seamlessly across borders.
One of the key features of Stellar is its consensus algorithm known as the Stellar Consensus Protocol (SCP).
Unlike traditional blockchain platforms that rely on resource-intensive mining, Stellar operates on a decentralized network of trusted validators, making it highly efficient and energy-saving.
The Stellar team comprises a diverse group of individuals with extensive experience in the fields of technology, finance, and blockchain.
Jed McCaleb serves as the co-founder and Chief Architect of Stellar, overseeing the technical development and innovation of the platform. Denelle Dixon is the CEO and Executive Director of Stellar Development Foundation and brings her expertise in law and tech policy.
In 2015, Stellar partnered with IBM to explore the potential of blockchain technology in cross-border payments and remittances. This collaboration led to the creation of IBM's payment network, World Wire, which is powered by the Stellar network.
To date, the team has raised a total of $129 million in funding from investors such as A16Z, Accel Partners, Stripe, BlackRock, and Google Ventures, and many others.
What is Stellar?
Stellar is an open-source blockchain platform designed to facilitate fast, low-cost cross-border transactions. It aims to connect financial institutions, payment systems, and individuals to create a decentralized global financial network.
Stellar employs a federated Byzantine agreement (FBA) consensus algorithm as its underlying technology. It uses a decentralized network of servers, called validators, to agree on the state of the blockchain and validate transactions.
How does Stellar work?
Unlike traditional blockchain platforms that rely on proof-of-work or proof-of-stake mechanisms, Stellar's FBA allows for faster and more scalable consensus.
The core of Stellar's technology stack includes Stellar Core which is the backbone of the Stellar network, responsible for maintaining the ledger and validating transactions (consensus).
Horizon is an API server that allows developers to interact with the Stellar network. Horizon provides a RESTful API, enabling users to submit transactions, query account balances, and access other blockchain-related data.
Stellar Development Foundation (SDF) provides software development kits (SDKs) in different programming languages, including JavaScript, Python, Java, and Go. These SDKs simplify the integration of Stellar's functionality into applications and services.
Stellar does not have a native virtual machine like Ethereum. Instead, it focuses on providing a robust and efficient decentralized payment infrastructure.
Stellar's primary goal is to enable quick and cost-effective cross-border transactions rather than support general-purpose smart contracts.
Stellar Coin (XLM)
XLM (Stellar Lumens) play a vital role in the Stellar network as they serve as a bridge currency, facilitating the exchange of different fiat currencies.
XLM holders also have the ability to use their tokens for other purposes, such as participating in the network's governance and participating in decentralized finance (DeFi) applications built on the Stellar network.
XLM can be staked to earn additional rewards by supporting the network's consensus and security.
Stellar (XLM) Tokenomics
XLM has a maximum supply of 50 billion coins which were created during the network's inception. The supply is not fixed and new XLM coins are periodically released into circulation via inflation.
Unlike traditional inflation, XLM inflation is designed to distribute the new coins to existing holders and incentivize network participation.
Every week, the Stellar network adds 1% to the total XLM supply through the inflation mechanism. However, this new supply is not immediately distributed to all existing XLM holders.
Instead, it is distributed proportionally to the accounts that have voted to receive the inflation rewards. This voting process allows users to choose which addresses they believe should receive the newly created XLM coins.
This inflation mechanism aims to encourage the involvement of long-term holders and discourage excessive coin hoarding.
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Author
Mike Harry
Mike is a passionate crypto enthusiast who bought his first Bitcoin in 2016. With a natural curiosity and a love for learning and tinkering, Mike is always trying out new DeFi applications. Mike excels at breaking down difficult concepts into easy-to-read guides for beginners.
