Stellar is one of those cryptocurrencies that doesn’t get the attention it deserves. But as I look deeper, I see a blockchain that’s quietly revolutionizing digital payments. With transaction volumes that outpace major players and fees that are practically nonexistent, Stellar might just be on the brink of mainstream adoption. In this post, I’ll explore both the upsides and potential downsides of this underrated gem.
Jed McCaleb’s Take on Stellar
Jed McCaleb, the man behind Ripple and Stellar, recently shared his thoughts on why he considers XLM to be one of the most underrated cryptocurrencies out there. He pointed out something interesting: Stellar processes more daily transactions than most blockchains combined—ten times more than Ethereum, in fact. According to him, that’s a big differentiator for its blockchain.
What caught my attention was McCaleb’s emphasis on Stellar’s design simplicity. The network has built-in features like stablecoin issuance and a decentralized exchange. Plus, he introduced me to Soroban, Stellar’s smart contract platform designed with safety in mind—no reentrancy vulnerabilities here!
Transaction Volume: A Closer Look
When you stack up transaction volumes, Stellar really shines. It handles around 7 million transactions per day—that’s about 83 transactions per second (TPS). Ripple comes in second at 26 TPS, while Bitcoin and Ethereum lag significantly behind.
The impressive usage metrics are hard to ignore. For instance, Q3 2021 saw a staggering growth rate of 149% year-over-year in payment volume on the network.
Low Fees: A Game Changer?
One of the standout features of Stellar is its low transaction fees—basically free at 0.00001 XLM per transaction. This makes it incredibly appealing for micropayments and cross-border transactions, especially in emerging markets where traditional banking can be costly or inaccessible.
In contrast, Bitcoin and Ethereum are racking up average fees of $25 each—definitely not conducive for small-scale transactions. Even IOTA’s zero-fee system pales compared to Stellar’s efficient model.
But here’s where I get skeptical: Is it too good to be true?
Potential Pitfalls: Governance and Soroban
While McCaleb painted a rosy picture, I couldn’t help but think about some challenges:
On-Chain Governance Issues
1) Large token holders could dominate decision-making.
2) Not all participants may grasp technical nuances.
3) Conflicting interests among stakeholders could arise.
Soroban Challenges
1) New vulnerabilities could emerge despite design intentions.
2) Increased complexity might lead to congestion.
3) Evolving regulatory landscapes pose ongoing challenges.
Market Performance: Is It Really Underrated?
Stellar has seen a massive price surge lately—up 480% this month alone! Its market cap now sits at $17 billion+, surpassing Shiba Inu. So is it really underrated?
McCaleb’s assertion holds some weight; despite its impressive metrics and real-world applications (like partnerships with banks), it still lags behind other cryptos in public perception.
Investor Sentiment
The bullish momentum is palpable; even Grayscale launched a trust focused on XLM! Yet competition from Ripple (XRP), Ethereum (ETH), and Solana (SOL) looms large.
Some analysts suggest we might not see new all-time highs for a while—but they also acknowledge that there’s significant potential ahead.
Summary: The Road Ahead for Stellar
In summary, while recent performance indicators suggest growing recognition for XLM, several challenges still support the notion that it’s somewhat underrated at this stage.
With its high scalability and low fees tailored for real-world use cases—especially in cross-border payments—it seems poised for future adoption. As we navigate an increasingly digital landscape, could it be that Stellar is simply ahead of its time?
