Stellar Lumens (XLM) Review – As a Cryptocurrency ‘Not-for-profit’ project, we have great respect for the project but are Stellar a good investment opportunity?

In this extensive review, we’ll be discussing all the important aspects of the project so you can decide if this is a good Crypto investment for you or not.



What Is The Stellar Lumens Project?

Will The Stellar Lumens Token Increase In Price?

How To Buy And Store Your Stellar Lumens Tokens

Is Stellar Better Than Ripple?



  1. What Is Stellar Lumens?
  2. How Does Stellar Lumens Work?
  3. Are Stellar Lumens Solving Real Problems?
  4. Will The Stellar Token Price Increase?
  5. Team
  6. Selling Points
  7. Barriers To Success
  8. Extra Points
  9. Where To Buy & Store Stellar Tokens
  10. Stellar vs Ripple
  11. Conclusion
  12. Follow Future Points



In Their Words

“Stellar is a decentralized, hybrid blockchain that is fully open-source. It is infrastructure that exists to facilitate cross-asset transfers of value, including payments.”

In Our Words

Stellar is a not-for-profit project that aims to offer everyone equal access to easy banking methods

Stellar was, in fact, a 2014 hard fork of Ripple. It is for this reason that the two are often compared, something we will touch on later.



Money Transfers

We feel that this is easiest to explain with an example;

  • Let’s say I want to send £100 to Joe in Nigeria
  • He wishes to receive payment in the local currency; Naira
  • Having purchased 20 XLM to allow myself access to the network, I could then deposit my desired funds onto the network.
  • This would be recorded by the Stellar ledger as credit.
  • This credit would now be in my online account – like a virtual wallet – and I would be able to send it to Joe.
  • The Stellar distributed exchange will automatically convert my £100 into Naira, at the lowest possible rate, before sending it to Joe and he is free to withdraw it.

Each transaction costs 0.00001 XLM which would need to be purchased on top of the 20 XLM to access the network. 1 XLM currently costs around $0.22 and would cover 100000 transactions.

This feature was introduced as a DDoS deterrent.

Forex Platform

As well as money transfers, the Stellar exchange can be used just as any other Forex trading would.

For instance, the platform connects two individuals trying to trade currencies with corresponding orders e.g. someone wanting to exchange GBP for USD and another wanting to exchange USD for GBP.

If this is not possible, then the system would introduce XLM as a bridge currency. For example, it would trade GBP for XLM and then XLM for USD to complete the transaction.

If there were no corresponding orders to connect buyers or use Lumens as intermediary, the platform could connect multiple transactions.

For example, a person wanting to exchange GBP for USD with someone wanting to exchange USD for EURO and also someone wanting to exchange EURO for GBP in order to complete all transactions.

In other words, the Stellar platform can be used to trade regular currencies and has a sophisticated system in place to overcome liquidity issues.



#1 PROBLEM – High Transaction Costs

Cross-border payments, especially when processed through banks are currently very costly.


A single transaction on the Stellar network costs 0.00001 XLM, you could process 100,000 transactions for 1 XLM (Currently $0.22), significantly less than current methods.

# 2 PROBLEM – Settlement Times

Cross-border payments can currently take anywhere between 3 and 5 days to be settled due to the number of intermediaries often involved in the process.


On the Stellar network transactions are completed in 2-5 seconds, this is even faster than Ripple whose transactions take 5-10 seconds.

#3 PROBLEM – Liquidity

People using lesser-known currencies often struggle with liquidity issues – a lack of buyers and sellers in the market makes it very difficult to easily trade currencies.


As Stellar can be used as a bridging currency, it increases liquidity and allows for easier trading with lesser used currencies



This is another incredibly important point that people often overlook when investing in Cryptocurrencies – is the token price truly linked to the platform usage?

Investing in Cryptos is not the same as traditional investing – when you buy shares in a company, you’re buying ownership.

As the company makes increased profits, the share price will increase and your investment value will rise also.

With the majority of Cryptocurrencies, the tokens don’t represent shares.

Therefore, it’s possible for the company to be successful (i.e the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.

The ONLY factor determining token price is supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions:

  1. Demand – Will there be token demand on the exchanges?
  2. Supply – Will there be excessive inflation hindering prices?

Let’s first look at demand:

What Are The Sources of Demand?

In short, we see very little demand for XLM and Stellar themselves even suggest this may be the case in their FAQ section.

In order to use the system a person only needs to hold a reserve of 20XLM. There are, of course, the transactions fees also but a fee of 0.00001 XLM per transaction means you could complete 100,000 transactions for just 1 XLM.

Even if Stellar are successful in converting large corporations to the network, their yearly transactions would probably require them to hold only a very small number of XLM tokens.

When this is combined with XLM’s use as an intermediary/bridge currency, there becomes no real reason to hold XLM. With all trades completed on the Stellar ledger, there is no real need to ever buy tokens from the exchange apart from to access the platform and cover your fees.

Stellar themselves offer a few reasons to hold XLM but they do little to convince us to change our minds; their two suggestions (Besides to cover fees) are as follows:

  1. To support the work of and invest in any future success.
  2. In the future, after they have given away all the lumens—which will happen over the next 10 years—everyone will need to procure lumens from exchanges.

Their second point may well be true, in that they will have given away all of the lumens but if the conclusions we made above are true then a demand for XLM would still not exist, so this would be irrelevant.


What Is The Likely Inflation Rate?

According to Stellar’s website, new lumens are added to the network at the rate of 1% each year. However, this isn’t the realistic supply for Stellar.

With a total circulating supply of 18 Billion tokens and a total supply of 103 Billion, there are still a further 85 Billion tokens which could reach the market and devalue current tokens.

As a result, the supply is also a concern for us.



The first thing we’d like to highlight is the importance of this section; if a project fails either of these sections, we wouldn’t invest in it, regardless of how good the rest of the project could be.

In this example, Stellar has failed our tests of supply and demand.

Simply put, we don’t believe that Stellar token prices should rise over time based on supply and demand.

Having said that, we do expect speculation might drive up prices further in the short-term but we don’t believe in Stellar as a long-term investment

Not For Profit

The real question is; should we be surprised that Stellar is potentially not a great investment?

When you consider that XLM is a not-for-profit project, it should come as no real surprise that Stellar potentially produce enough profits for investors.

We shouldn’t overlook the tremendous work that Stellar are doing in order to provide some of the many benefits that Cryptocurrencies can bring to people worldwide.

In fact, we have great respect for the project and the selfless nature of their goals. We believe that they are taking steps forwards to bring the technology into everyday life and they’re not even lining their own pockets at the same time.

In other words, we’re a big fan of the project but we don’t view it as a great investment.

Regardless, we are going to continue our research into the platform and we’ll next discuss the team.



As our regular readers will know, one of our mantras here at Crypto Gurus is to “invest in people, not ideas”. It’s based off the principle that an idea is only as good as the people who execute it. As investors, we strongly believe in this principle.

Stellar are an established and operating currency so for this reason we will just highlight a few important names and connections involved with the project.

Please pardon the pun but this project really does possess a stellar team throughout; cofounder Joyce Kim has significant legal experience as well as experience as a venture capitalist.

The real attention grabber on the team is Jed McCaleb; some of you may recognise his name as the founder of Ripple. He left there after disagreements with their board of directors but he was also the founder of Mt. Gox.

Now we all know how that ended but McCaleb had sold his shares and was out of that project long before the controversy, so this would not be a worry.

They also feature some impressive board members besides Kim, former Paypal senior executive Keith Rabois and Greg Brockman, former CTO at Stripe are just a couple.

When this is combined with their advisors the team just gets better. Current Stripe CEO Patrick Collison, founder Matt Mullenweg and Greg Stein, who was instrumental in launching Google’s open-source hosting platform, to name a few.



Hi, I’m Tom, the CEO, and I’d like to take this opportunity to personally thank you for reading our article. I hope you’re enjoying it and have learnt a thing or two.

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Stellar already have a number of high profile partnerships secured, a number of anchors from various countries should help to ensure the necessary liquidity.

On top of that, having companies such as IBM, Deloitte and Stripe already on board should help boost their case to encourage further adoption.

Commitment to Developers

As a not-for-profit organisation and with the aim of encouraging adoption as quickly as possible, Stellar have made their code open-source.

As well as this, they have provided a number of guides on how to implement the network into their businesses and general guidance.




As mentioned above any success is going to come down to widescale adoption, it feels like we mention this a lot during our reviews but it is true.

Imagine launching a product and nobody buying it, it wouldn’t be a success. Cryptocurrencies are still in the early adopter stage and receive some unwarranted negative press, this is just something to bear in mind.




This is something that we have mentioned throughout but something we wanted to give a little extra attention to; the team deserve respect just for this aspect of the project.

There aren’t many other, if any, cryptocurrency projects running not-for-profit. Even when Stellar auction off a small amount of their supply, team members are forbidden from bidding to avoid any potential conflict of interests.

When we’ve seen projects such as Ripple holding 55 billion XRP, Stellar have to be commended.



Where To Buy Stellar Lumens Tokens

Stellar Lumens tokens are available for purchase on the following exchanges:

  1. Binance
  2. Bittrex
  3. Poloniex

Where To Store Stellar Lumens Tokens

When it comes to storing Ripple tokens you have a number of options, the option we recommend would be to use a hardware wallet such as the Ledger Nano S, recently compatible with XLM.

This obviously means that your tokens are stored offline and are generally considered to be the safest option as a result.

Stellar Lumens themselves offer a list of 11 different wallets including Lobstr, a purpose-built wallet for XLM.

These are of course just suggestions; you may prefer to use one of these options or another method entirely, each option has its own benefits and it’s important you find the one that best suits you.



This is a question that pops up quite often; which is better Ripple or Stellar Lumens?

Having now reviewed both projects we have found some similarities and differences between both which we will briefly cover below.

Both of course have a focus on cross-border payments and transactions and as Stellar was a hard fork of Ripple they share similar technology. They can both operate as a bridge currency

Ripple is a centralized currency while Stellar are decentralized; they focus on opposite ends of the pyramid. Ripple are working with banks, for banks, while Stellar are working with banks but for the benefit of the people.


We would first like to say that we see great potential in both projects but concluded that we would invest in neither of them. Neither project did enough to convince us that there would be significant demand for their tokens.

We believe this is a position where both currencies could exist side by side; they both seem to possess different focuses and target audiences. The comparisons obviously come from the fact that Stellar is a hard fork of Ripple and Jed McCaleb’s involvement in both projects.

Don’t forget to also check out our review of Ripple and form your own conclusions too.



We are huge fans of what the platform is trying to achieve; bringing banking to the underbanked etc and believe the platform could have huge benefits to the world in the future, so we applaud the team for that.

We love that Stellar is not-for-profit and have huge respect for the team for their efforts.

We also believe that there are many good aspects of this project but, the issue surrounding the potential lack of token demand, is simply too large a concern for us.

As a result, we truly wish the Stellar team the best with their project but we would have to pass on this project as far as investing goes.

We’d like to end our review by wishing the Stellar team the best of luck in the future as we truly believe their platform could have a great effect on the world.



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