First published 22 April 2020, beside the XRP explainer. Expanded in October 2026 for the supply after the burn, the current reserve, and the memo. Stellar is a public ledger built for payments, especially payments between organisations that issue their own tokens on it. A lumen, XLM, is the native asset. You spend a little of it on fees, and you lock a little of it so an account is allowed to exist. The tokens people actually send — a dollar claim, a peso claim, a reward point — are issued by anchors, which are companies. An anchor’s dollar is not a lumen. A lumen is not a dollar. Mixing those up is the ordinary Stellar injury, second only to forgetting the memo.
The other ordinary injury is confusing Stellar with XRP. They share a founder’s biography and a memo field. They do not share a ledger. Ripple, XRP, and RippleNet is the other page. This one is Stellar.
Where it came from
Jed McCaleb launched Stellar in 2014 after leaving Ripple, with the Stellar Development Foundation, a nonprofit, beside the network. The software’s first consensus design was replaced in 2015 by the Stellar Consensus Protocol, written up by David Mazières. The foundation funds development and runs some validators. It does not have to sign your payment for the ledger to accept it. It does hold a large mandate of lumens, which means a single organisation’s spending is part of the supply story. That is a fact about distribution, not a helpdesk.
One hundred billion lumens were created at the start. Nothing was mined. For the first years the supply grew by about one percent a year through an inflation pool. Validators ended that inflation on 28 October 2019. In November 2019 the foundation destroyed about 55 billion lumens, mostly unused giveaway allocations plus a cut of its own operating fund, by sending them to an account that has no signers. The foundation said it would not burn more. What remains is on the order of 50 billion lumens in total. A large slice, on the order of 15 billion in the foundation’s own 2026 accounting, is still the foundation’s mandate rather than coins moving between strangers. Total supply and circulating supply are different numbers. A market-cap widget that picks the wrong one is a widget.
How agreement works
Stellar does not use mining and does not use a bonded stake the way Ethereum or Polkadot does. Validators vote in overlapping groups called quorum slices: each validator lists the sets of other validators it is willing to go along with. When enough of those slices overlap, the network agrees on a ledger and sticks. There is no block reward. Fees are tiny and are not paid out as a miner’s wage. The design bets that a known set of organisations, choosing whom they trust, can order payments faster than a global hash lottery.
Who sits in the slices that other validators actually follow is the control question. If the slices that matter all include the same few organisations, those organisations are the practical centre, even though the code allows others. Call that a federation, not a slogan about openness. It is a different bet from Bitcoin’s proof of work. It is also a different bet from XRP’s validator list, which is why “both have memos” does not make them one system.
Accounts, reserves, and memos
A Stellar address starts with G. It is not an XRP address and not an Ethereum address. Creating an account requires a minimum balance. The base reserve is currently 0.5 XLM. An empty account must hold two base reserves, 1 XLM. Each extra entry — a trustline to some anchor’s token, an offer, an extra signer, a data entry — adds another 0.5 XLM. Validators can vote to change the reserve. They do it rarely. The locked lumens are not a fee. Closing the entry frees them. Sending your last lumen away and leaving the account under the minimum will simply fail, or, if you meant to close the account, has its own transaction. A wallet that says “insufficient balance” when you can see the coins is often this rule.
Anchors and many exchanges use one Stellar address for every customer. The address is the building. The memo is the flat number. Omit the memo and the payment arrives in a lobby. The coins are on the ledger. They are not in the account you intended, and the organisation may or may not have a process to sort the lobby. Copy the memo from that deposit screen, every time. A wallet that is yours alone often needs no memo. An exchange almost always does.
A trustline is permission for an anchor’s token to sit in your account. Without it, the token cannot land. That is a feature against spam tokens. It is also a step phishing sites pretend to “help” you with, while asking for a signature or a phrase. You do not type a recovery phrase to add a trustline. A wallet signature is not a handshake.
What Stellar is not
It is not XRP with a friendlier nonprofit. It is not a stablecoin. USDC and other dollar tokens can move on Stellar, issued by their own companies, and they remain those companies’ tokens. It is not mined, so there is no halving to countdown. It is not private. The ledger is public. It is not a bank, even when an anchor looks like one. The anchor can freeze its own token if its rules say so. It cannot freeze the native lumen in the same gesture. Read which asset you hold before you argue with the wrong party.
If you wanted a scarce mined coin, this is the wrong machine. If you wanted Ripple the company, you are in the wrong building. If you are depositing XLM, the checklist is short: address starts with G, memo copied from the venue, amount above the reserve you must leave behind, and the asset on the screen is XLM and not an anchor’s lookalike. Nothing here is an instruction to buy, sell, or anchor anything.
