Stellar (XLM)

What Stellar is

Stellar is an open-source public blockchain built for moving money and issuing assets, and XLM, called the lumen, is its native currency. Stellar's documentation states that "lumens (XLM) are the native currency of the Stellar network" and that "the lumen is the only token that doesn't require an issuer or trustline" (developers.stellar.org, as of September 2026). Everything else on Stellar is an asset issued by somebody, and the lumen is what pays for using the network.

The network is stewarded by the Stellar Development Foundation, a nonprofit that describes its mission as "creating equitable access to the global financial system through blockchain technology" (stellar.org, September 2026).

How it works

Stellar's ledger is designed around issued assets rather than around a general-purpose virtual machine. Any party can issue an asset, and an issued asset is identified by two things together: an asset code and the account that issued it. The practical consequence is that a dollar stablecoin issued by one company and a dollar stablecoin issued by another are different assets on Stellar, even if both are labeled USD.

Before an account can hold an issued asset, it must open a trustline to that asset's issuer. This is a deliberate opt-in. It means nobody can push an unwanted asset into your account, and it means holding an issued asset is an explicit statement that you accept that issuer's credit.

Consensus uses a federated Byzantine agreement design rather than mining or stake weight. Nodes choose which other nodes they rely on, and agreement emerges from the overlap between those choices. Stellar states that transactions reach finality in "under 6 seconds" (stellar.org, September 2026).

Stellar added a smart contract platform called Soroban, which the foundation describes as "a developer-friendly, Rust-based smart contracts platform designed for scale and sensibility." Contract state on Stellar is rented rather than free, and that rent is paid in lumens.

The other piece is anchors. An anchor is an institution that accepts a national currency and issues the matching asset on Stellar, or redeems it in the other direction. Stellar's own description points users to "the global ecosystem of anchors, wallets, and cash to crypto on and off-ramps." Anchors are how Stellar connects to fiat money, and they are the on ramp off ramp in Stellar's model.

Supply and tokenomics

Stellar's lumen supply has a specific and unusual history, and the numbers are published by the project.

Lumens have three documented jobs. They pay transaction fees. They fund smart contract rent. And they satisfy minimum balance requirements, which is where the numbers get concrete.

Stellar sets a base reserve of 0.5 XLM. Every account must hold at least two base reserves, or 1 XLM, and cannot spend below that floor. Each additional subentry the account creates adds another 0.5 XLM to the required minimum. Subentries include trustlines, open offers on the ledger, extra signers, and data entries. An account holding several issued assets therefore has a minimum balance meaningfully above 1 XLM, because each trustline costs a further half lumen of locked reserve (developers.stellar.org, September 2026).

That reserve is not a fee. It is not spent or burned. It sits in the account and is released when the subentry is removed. Its purpose is to make it expensive to bloat the ledger with abandoned accounts and unused trustlines.

Transaction fees themselves are paid in lumens and are small by design, with a bidding mechanism that prioritizes transactions when demand exceeds capacity. Amounts on Stellar are denominated down to a subunit called a stroop.

History

Stellar launched with 100 billion lumens and an inflation mechanism that added new lumens on a schedule. That mechanism was ended in 2019, and in the same year the supply was cut roughly in half by the permanent burn of 55.4 billion lumens. Those two 2019 changes define the token's current economics: no ongoing issuance, and a supply that has been fixed at approximately 50 billion since.

The Stellar Development Foundation continues to hold a role that the project describes openly. Its stated functions are providing "strategic direction of the network in collaboration with ecosystem participants," funding builders through grants, pursuing partnerships with public and private institutions, and maintaining the network's technical infrastructure and governance. The foundation publishes roadmaps and quarterly reports (stellar.org, September 2026).

The addition of Soroban extended Stellar from a payments and asset-issuance ledger into a network that also runs Rust-based smart contracts, without changing the asset and trustline model underneath.

Risks and what to watch

Issued assets on Stellar carry issuer risk, and that is the most important thing to understand about the network. A dollar token on Stellar is a claim on the anchor that issued it. If that anchor fails, freezes accounts, or cannot honor redemptions, the Stellar ledger will keep showing your balance and the ledger will be correct. The obligation behind it is what has failed. Trustlines make this explicit, which is a feature, but it does not remove the exposure.

Concentration is a second consideration. The Stellar Development Foundation is central to development, funding and direction, and the network's fiat connectivity depends on a finite set of anchors serving particular corridors. Coverage in any given country is a function of which anchors operate there.

Federated Byzantine agreement depends on the overlap in whom nodes trust. In practice, many operators adopt similar trust configurations, and the resilience of the network depends on that structure staying sufficiently diverse.

Minimum balance reserves are a small operational trap for new users. An account that spends down to its reserve floor cannot transact, and every extra trustline raises that floor. Availability of XLM itself varies by venue and jurisdiction; see where to buy Stellar and Exchanges.

Frequently asked questions

What is a lumen?

The lumen, ticker XLM, is Stellar's native currency. It pays transaction fees, funds smart contract rent, and satisfies account minimum balance requirements. Stellar's documentation notes it is "the only token that doesn't require an issuer or trustline," which distinguishes it from every other asset on the network.

How many lumens exist?

Approximately 50 billion as of July 2026, per Stellar's own documentation. One hundred billion were created at inception and about 5.4 billion were added by an inflation mechanism that ended in 2019, but 55.4 billion were permanently burned in 2019 by sending them to an inaccessible address.

What is a trustline?

A trustline is an explicit opt-in by an account to hold a particular issued asset from a particular issuer. Without one, the account cannot receive that asset. Each trustline raises the account's minimum lumen balance by 0.5 XLM, and that reserve is returned when the trustline is removed.

Why does my Stellar account need a minimum balance?

To limit ledger bloat. Stellar's base reserve is 0.5 XLM, every account must hold two base reserves, and each subentry such as a trustline, offer, signer or data entry adds another 0.5 XLM. The reserve is locked, not spent, and is freed when the subentry is deleted.

What is an anchor?

An anchor is an institution that issues a Stellar asset backed by something held off the network, most often a national currency, and redeems it on request. Anchors are how lumens and Stellar-issued assets connect to bank money, and the asset you hold is a claim on that specific anchor.