Stellar has demonstrated an impressive price performance since December 28. Stellar’s token, Lumens (XLM), touched the peak at $0.91 on January 4, and has lost since then more than half of its value. However, this is undoubtedly a temporary correction that simply imitates the situation of the whole crypto market, which has intensively reacted to news from South Korea, India, the Netherlands, China, and other countries that are keen to limit or even entirely ban crypto trading. During the same period, Bitcoin and other cryptocurrencies in the top 10 have lost about half of their value as well, with Ripple declining by 67%.
But if we’re moving our viewpoint somewhere in the future, Stellar might be a winner in 2018 given its potential and fundamentals. This digital asset-oriented project might beat other similar blockchain systems like NEO or Waves.
Before getting more in-depth to Stellar’s achievements and plans, let’s see what it is and how it compares to other blockchain projects in the same league.
Stellar Shortly Explained
Stellar was founded by Jed McCaleb and Joyce Kim. The first guy, McCaleb, is a prominent name in the crypto space. He created Mt. Gox, the first Bitcoin exchange, which got eventually hacked. He is also the founder of Ripple and created eDonkey, a peer-to-peer file sharing system. In other words, McCaleb knows how to handle a blockchain project, and he invested all his expertise in Stellar. Unlike Ripple, Stellar’s protocol is backed by a non-profit – the Stellar Development Foundation.
In fact, Stellar was initially based on Ripple’s protocol when it was launched back in 2014, but its code was totally changed with time, and today it doesn’t have anything in common with Ripple. The latter is a kind of centralized DLT, while Stellar is loyal to the primary cause of a blockchain – to be decentralized and transparent.
Stellar has the mission to streamline the value exchange process, by creating a global payment system. You can think of it as a network of people, banks, and payments systems. Besides easing payment procedures, the system allows the issue of new tokens, so it is similar to Ethereum in this instance.
Besides the payments infrastructure, Stellar is also working on a distributed exchange where people can trade currencies and tokens.
Could Stellar Beat NEO or Wave?
You might say that Stellar is competing with other blockchain projects focused on digital assets, such as NEO or Wave. It might be true, but there are some essential differences between them.
NEO wants to become a system of the new internet generation, focused on decentralized applications (DApps), smart contracts, and initial coin offerings (ICOs).
Waves is another platform that allows everyone to create their own tokens and initiate ICOs. The project is also about a decentralized exchange, where people can trade all kinds of tokens and popular cryptocurrencies.
Stellar started as a platform with a specific goal – to transform the payment industry. While this goal remains a priority, the project will go broader soon, and this is where it can kill the competition.
Stellar might beat its rivals because of its partnerships with notable players like IBM, its increasing popularity, successful PR campaigns – unlike Waves, and its genuine technology that allows fast and cost-effective transactions.
In January 2018, Stellar presented its roadmap for this year, an event that pushed the Lumens’ price up and gave hopes to investors that the platform is definitely a game-changer.
2018 Stellar Roadmap
The roadmap for this year describes two key goals – SDEX, which is the Stellar Decentralized Exchange, and Lightning Network on Stellar.
- SDEX – as the plan says: “SDEX will be the world-class front-end that our underlying technology has long deserved. It will enable on-chain, protocol-level trades for any Stellar token, and we will create liquidity to minimize spreads and maximize choice of assets.”
SDEX will find the lowest rates between any asset pairs, will require low trading commissions and will make sure the user has all the control over the trading process.
- The Lightning Network, which is a system that acts as a second layer payment protocol that runs on top of a blockchain, will be integrated with Stellar, providing scalability solutions in the future.
Stellar Partnerships and Activity
Stellar got attention when it partnered with IBM for a cross-border payment system in the South Pacific Region. The system involved over a dozen of banks and financial institutions from Australia, New Zealand, Fiji, and Tonga, which used Lumens token for cross-border transactions.
Besides that, Stellar claims that it closed 36 other partnerships, including with Stripe, Deloitte, Novatti, and money transfer firm Tempo.
Here is a table that displays some of the partnerships:
Will Stellar Become Ethereum’s Main Rival?
If Stellar has the potential to overcome NEO or Wave in terms of features, partnerships, achievements, and success, can it go next and challenge Ethereum itself?
Ethereum has been dominant in the ICO space. You have tons of tokens and wallets built on the ERC20 standard. This is because Ethereum has the smart contract feature and acts as a multi-layer system, unlike Bitcoin, which is quite limited when it comes to functionality.
Stellar learned the lesson from Ethereum and came with even better technology for the creation of new tokens. It also plans to create an entirely decentralized exchange, which is an alternative to centralized solutions like Coinbase or Bitfinex.
Stellar’s transaction speed is much faster than in Ethereum, processing a transaction between two and five seconds. Well, the logo is actually quite representative in this case – but it might also suggest the Lumens’ price surge, right? Besides cryptocoins, Stellar allows clients to swiftly exchange fiat currencies, such as USD to EUR.
More ICOs start to favor Stellar instead of Ethereum. Thus, Mobius project issued its MOBI token on Stellar, opening the door for more heavy ICOs to launch on Stellar.
We don’t know whether Stellar will overcome Ethereum, but we can be sure it will become a worthy rival.