Today we will be talking about Stellar Lumens. We’ll be going through Stellar Lumens use cases, its current market performance and the latest Stellar Lumens news headlines If you’re new to the channel, don’t forget to like, subscribe and turn the notification bell on for daily crypto news! So what are Stellar Lumens? Stellar was founded in 2014 by Jed McCaleb and Joyce Kim.
In addition to being one of the co-founders of Ripple, McCaleb is also the creator of the file-sharing site eDonkey as well as the infamous Bitcoin exchange Mt Gox. The Stellar network is a decentralized blockchain platform that connects individuals, banks and payment systems to move currencies securely and rapidly for a fraction of the cost of traditional payment gateways.
Stellar allows users to send currencies between each other through tokenization, when an individual wants to send dollars to someone, they don’t send actual dollars, they instead send dollar tokens. Dollar tokens are found on the stellar blockchain and have the same price as the dollar and are backed 1:1 by dollars in a bank account dedicated to this purpose.
When a user wants to cash out their token dollars for fiat dollars, they are able to do this, as there are necessary reserves to retrieve their dollars. Currencies are not the only things that can be tokenized on the stellar platform, gold, silver, bonds, property and even hours of work can all be tokenized. Stellar is able to effectively and correctly tokenize these factors through the activity of third party entities called Anchors.
Anchors are entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. All money transactions in the Stellar network (except lumens) occur in the form of a credit issued by anchors, so anchors act as a bridge between existing currencies and the Stellar network. The stellar network requires anchors to successfully comply with 4 requirements. The requirements include; having reserves that match the issued tokens in a dedicated, audited bank account.
Comply with local regulators, apply for KYC and only use local bank transfers when on-ramping and off-ramping users on the network. The Stellar network achieves the ability to connect different stakeholders and thus enabling rapid transactions, through the platform’s ability to process transactions within 2 to 5 seconds and fees are as low as 0.0001 lumens (XLM) per transaction. The switching of one currency to another currency on the stellar network will lead to fees of 0.00006 dollars per transaction.
This is compared to typical international wires, which might cost as much as $75 dollars per transaction. Stellars scalability, low transaction fees and decentralised nature make it a highly attractive vehicle for micro international payments and remittances. Unlike most cryptocurrencies, Stellar’s native token, lumens or XLM cannot be mined through proof of work or proof of stake.
Instead, 100 billion XLM tokens were created upon the network’s launch, the will be a further 1% yearly inflation rate. However, in late 2019, inflation of XLM tokens was removed and the total supply of XLM was reduced to a little over 50 billion and no more XLM tokens will ever be added to this supply.
20 billion of these XLM tokens are currently in circulation with the rest of the tokens held by the Stellar Foundation to develop and promote Stellar. So how has Stellar performed on the market? XLM is currently the 19th ranked cryptocurrency with a market cap of over 7.7 billion dollars and currently has a circulating supply of just over 23 billion coins with a maximum supply of 50 billion coins.
XLM experienced a significant price change throughout 2020, whereby its price ranged from lows of 0.037 dollars to highs of 0.21 dollars, which was observed in November 2020, these swings in price could have led XLM coin holders with over 5x returns on investment.
The XLM coin price has experienced continued increases in price in 2021, whereby XLM’s price went parabolic from January to May, where the price rose from 0.13 dollars to 0.69 dollars per coin, these changes in price may have given some XLM 2020 coin holders, 18x returns on investment.
Since these impressive increases in price, XLM has experienced a correction in its price and has consolidated at its current price of 0.33 dollars per coin. As well as Stellar’s impressive fundamental features, it is currently involved in a number of exciting projects.
The Stellar Development Foundation has signed an agreement with the Ukrainian government to facilitate the creation of a digital asset ecosystem, including a framework for a central bank digital currency, or CBDC. In response to this partnership, the Digital Transformation and IT Deputy Minister Oleksandr Bornyakov stated, “The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine,” “We believe our cooperation with the Stellar Development Foundation will contribute to the development of the virtual asset industry and its integration into the global financial ecosystem.” A major German real estate group, Vonovia, has used the Stellar blockchain to transfer the ownership of real estate rights.
Vonovia, a major European real estate group, has issued a 20 million euro ($24 million) bond using the Stellar blockchain. According to a Jan. 13 announcement, Vonovia has deployed the Stellar blockchain to issue security tokens for the transfer of real estate rights. The tokens were issued through an online marketplace called first wire. Vonovia said that the blockchain-powered bond has a total term of three years.
In response to the partnership between Vobovia and Stellar lumen, the real estate group’s chief financial officer, Helene von Roeder stated that the Stellar network is; “faster, easier and cheaper.” “Issues are transparent and traceable in real-time, which guarantees a professional transaction standard.
It also allows us to reach new investors globally,” What are your thoughts on Stellar Lumens? Will Stellar Lumens become the go-to platform for tokenization? Let us know your views in the comments below Thanks for watching the video, we hope you enjoyed it.
Read More: What is Stellar? (Lesson 1 of 5)