What is Stellar?
Founded in 2014 by Jed McCaleb, one of Ripple's co-founders, along with the Stellar Development Foundation (SDF), the Stellar network is an open-source blockchain platform designed to enable seamless, efficient and cost-effective interoperability between global financial systems and their currencies on a single network.
The Stellar network operates through a decentralized system of validators, akin to nodes in other blockchains, which achieve consensus on transactions. These validators are trusted by stakeholders, including other validators and XLM holders, ensuring secure and fast transaction processing without central control.
While Stellar leverages blockchain technology similar to Bitcoin and Ethereum, it stands apart with its unique proof-of-agreement consensus mechanism. This design makes the network faster, cheaper and significantly more energy-efficient than many other blockchains.
The Stellar Development Foundation, a nonprofit organization, drives the network's growth and development. SDF shapes the network's strategic direction, provides funding, fosters partnerships, promotes adoption of Stellar’s blockchain technology and builds open-source tools for developers to leverage in expanding the ecosystem.
SDF’s work to support the network’s growth and future is outlined in an annual road map. The road map and foundation’s progress against it is tracked in the open, just like the network’s code.
What is Lumen (XLM)?
The Stellar network supports digital representations of any currency but also has its own native token, Lumen (XLM), which plays a key role. Every account must hold a small number of lumens to function.
Unlike other blockchain tokens, lumens are not mined or awarded. Initially, 100 billion lumens were created, with a 1% annual inflation rate. However, this inflation was ended by a community vote in 2019, reducing the total supply to about 50 billion lumens, with no new tokens to be created.
Of these, 20 billion are in circulation, while around 30 billion are held by the Stellar Development Foundation (SDF) for network growth and will gradually enter the market.
Stellar has over 7.5 million accounts, using lumens for minimum balance requirements and transaction fees.
The Stellar network imposes a minimum balance of 1 lumen per account and a small transaction fee of 0.00001 lumen. These minimal costs ensure the network remains accessible while discouraging large-scale misuse.
XRP versus XLM
Stellar and Ripple share a mission to enable fast, secure, and low-cost cross-border transactions, but they cater to different markets.
Ripple’s XRP, supported by a private company, is primarily aimed at banks and financial institutions, providing an alternative to the SWIFT system for international transfers. In contrast, Stellar's XLM is decentralized, focusing on financial inclusion for individuals and small businesses, particularly in developing regions. Stellar operates as a non-profit platform dedicated to empowering users rather than seeking profit.
Analysts suggest that if historical patterns repeat, XRP could retest its 2018 peak of $3.41, with Fibonacci extensions projecting potential highs of $13.93, $18, or even $20 in this market cycle. Historical data highlights that when the 21 EMA crossed above the 55 EMA in 2017, XRP rallied by over 900%. A similar crossover is forming now, hinting at another significant surge.
Notably, Peter Brandt predicts a substantial rise for XRP in 2025, citing a "massive coil" pattern in its technical chart, which could drive prices to $24. Additionally, Bollinger Bands support the recent upward momentum, pointing to further gains in December and January.
XLM’s previous ATH was recorded at 0.537585 on Jan. 1, 2018, while the recent local high of 0.5255 on Nov. 1, 2024, came rather close.
How high can XLM go in 2025?
As 2025 begins, Stellar is in a significantly stronger position than a year prior. Following a sharp 600% rally in November 2024, Stellar's price has been consolidating within a Symmetric Triangle pattern, holding steady at approximately $0.47 while maintaining a bullish structure above the 50 EMA.
Stellar's ecosystem shows promising growth, nearing 28 million users, with 30 billion XLM in circulation and 55.44 billion tokens burned — highlighting the token's increasing scarcity, which could boost its long-term value. Key resistance levels at $0.50 and $0.55 are critical for confirming a potential breakout.
A breakout above $0.50 could spark an aggressive bullish run, especially as investor confidence grows with these positive metrics.
On the hourly chart, XLM is testing local resistance at $0.48. While short-term volatility appears limited, a breakout near $0.45 could project a price target around $1.0566, based on the pattern height of approximately 132%. If bullish momentum persists, Stellar could reach this target soon.
U.Today Editorial Team
Dan Burgin
