Recently, I’ve been paying attention to the Stellar project and found that many people’s understanding of it still stays at a superficial level. So I’ll organize my observations.

Stellar Coin XLM actually split from Ripple. Its founder Jed McCaleb left Ripple back then because he was dissatisfied with Ripple’s development direction, and later he co-founded Stellar with Joyce Kim, David Mazières, and others. This background is very important because it determines that XLM and XRP are similar technically, but have completely different ecological positioning.

The design concept of XLM is quite interesting. An initial issuance of 100 billion coins, no fundraising, all distributed through airdrops and gifts to retail investors, partners, BTC and XRP holders, and the team. Moreover, XLM also issues an additional 1% annually, distributed via a voting mechanism to community-designated accounts. This design truly embodies the concept of decentralization.

Comparing it with XRP reveals the differences. XLM mainly serves individual users for cross-border payments and remittances, while XRP targets institutions. XLM is operated by the Stellar Foundation (a non-profit organization) and uses community voting governance; XRP is controlled by Ripple Labs. In terms of market cap, XRP is indeed larger, but in the payments sector, XLM’s ranking isn’t bad either, only behind XRP, DOGE, LTC, and BCH.

In terms of ecosystem development, Stellar has already partnered with major organizations like Stripe, IBM, Deloitte, etc. There are currently 298 projects built on the Stellar network, covering 18 fields including exchanges, payments, NFTs, and wallets. Most importantly, the Stellar network now supports smart contracts, which is very helpful for attracting developers.

Looking at the price trend, XLM reached a historical high of $0.93 during the 2018 bull market, and experienced a second bull run in 2021, rising to $0.73. These two bull cycles saw increases of 44x and 17x respectively (from the lowest to the highest), indicating that this coin indeed has potential. Currently, XLM is priced around $0.15, with a circulating market cap of about $5.08 billion. From a technical perspective, XLM has broken through the downtrend and completed a retest, so there might be a short-term rebound opportunity.

Regarding investment strategy, I think XLM isn’t a particularly top-tier asset, but ranking among the top in over 20k cryptocurrencies shows its value. For conservative investors, it can be considered for long-term allocation, with a position size around 10%, which is more reasonable—don’t exceed the allocation ratios of BTC and ETH. If you want to buy in batches, you can start by investing 1% of your funds at the current price as a base position, then add more if prices dip later. For short-term trading, the fundamentals are already solid, so mainly focus on technical analysis.

But remember one thing: XLM’s movement still follows the overall market trend. Once the market declines, XLM will find it hard to rise independently. So no matter how optimistic you are about Stellar’s prospects, risk management should always come first.