Stellar wallet

The project was initially designed to facilitate an intermediary blockchain for international financial systems and global transactions. The Stellar network is supported by the Stellar Development Foundation, which was created in conjunction with Stripe CEO -- Partick Collison.

Stellar primarily caters towards financial entities with its customizable payments infrastructure and fast settlement times.

Stellar’s Technical Design and Applications

The Stellar network is mainly comprised of core nodes running the ‘Stellar Core Software,’ which store a local copy of the network ledger and are operated by individuals and organizations.

Stellar’s ledger operates via a credit system to user accounts, which are issued and held by the anchors. Besides the native XLM token, all assets and currencies on Stellar are a credit issued by anchors.

Stellar relies on a federated distributed ledger model where ‘anchors’ function as bridges between the Stellar network, its native token (XLM), and other assets like fiat currencies. Anchors can consist of real-world firms such as payment processors or banks and are intermediaries within the credit-based exchange of assets in the network.

Transfers on the Stellar network rely on The Stellar Consensus Protocol (SCP) for consensus, which can achieve finality in within 2 - 5 seconds, according to Stellar. Anchors need to be trusted like financial intermediaries in the conventional financial world, making Stellar more centralized than public blockchain networks. However, compared to legacy financial rails, Stellar has a unique advantage, and according to Stellar:

“The difference is, all the ‘Paypals’ and other anchors are operating on the same network so they can all transact with each other now – this makes the system way more powerful. People can now easily send and exchange all these different anchor credits with each other.”

Interestingly, the Stellar network itself can actually function as a form of decentralized order book, meaning that third-party developers can create interfaces on top of it to leverage its settlement capacity. For example, StellarX is a P2P marketplace for exchanging real-world assets with the Stellar network providing the back-end settlement layer. Users can exchange assets such as Bitcoin for the Chinese Yuan using the platform.

The fast settlement and low-cost of payments via Stellar also opens numerous use cases for the network, which Stellar references as micropayments, remittances, and accessible mobile banking services.

Monetary Policy and Development

Stellar does not have mining like in Bitcoin and other cryptocurrencies, and it does not rely on proof-of-stake (PoS) either. Instead, Stellar has a monetary policy, similar to Ripple, for producing XLM that does not involve the SCP.

Stellar initially minted 100 billion XLM tokens at the network’s launch and distributed a small portion of those tokens to the public via various giveaways such as airdrops. New XLM are issued via a 1 percent annual inflation rate that accrues proportional to the participation in the inflation voting process.

The current circulating supply of XLM is just over 19 billion, and the total supply is just under 105 billion.

Stellar provides a suite of developer tools for building on top of the network and has some high-profile firms creating applications on it including Deloitte and Tempo Money Transfer.