Stellar blockchain development - outsourcing company Boosty Labs

Stellar blockchain development

Stellar is a payment protocol based on distributed ledger technology that connects banks, payment systems and users. It allows for fast and cheap cross-border transactions between any pair of currencies. Stellar uses the native Lumen cryptocurrency token, denoted by the XLM symbol. The terms Stellar, Lumen and XLM are used interchangeably, although Stellar is a blockchain network, Lumen is a cryptocurrency and XLM is a trademark.

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Stellar Benefits

Compatibility

An important advantage of Stellar Lumens is its compatibility with other products of the financial market. Open source allows you to create your own plugins and clients based on Stellar for integration with the platform. Stellar provides all the tools, documentation and tutorials you need to do this. On the basis of Stellar, decentralized applications are created, ICOs are carried out and smart contracts are executed.

Cooperation with Ukrainian Government 

At the end of 2020, the Ministry of Digital Affairs of Ukraine and the Stellar blockchain development team signed a memorandum of cooperation in the field of virtual assets. The document describes the details of the partnership as follows: 

  • cooperation in the development of the virtual asset market in Ukraine;
  • support for projects related to virtual assets;
  • introduction and regulation of the circulation of stablecoins in Ukraine;
  • assistance in the development of the digital currency of the central bank of Ukraine.

The Stellar platform operates the StellarX decentralized exchange, which provides its own liquidity between issued assets and serves currencies that do not have their own direct market.

Thanks to the release of custom assets and the presence of a built-in exchange based on the Stellar platform, it is possible to conduct ICO / STO.

The platform supports different types of multi signatures, as well as the creation and execution of smart contracts and decentralized applications.

Origin of Stellar 

The Stellar payment network was created by Jed McCaleb, founder of the Mt. Gox and co-founder of Ripple. The reason for the launch of the new project was McCaleb’s critical attitude toward Ripple. He believed that this platform was not open enough and too centralized. Also, according to McCaleb, the platform’s management was striving exclusively for profit, manipulating the XRP rate in their own interests. As an alternative, McCaleb proposed a similar, but working on a different model, payment system, as well as a cryptocurrency aimed at a wide range of users.

Although originally Stellar was actually a clone of Ripple, excluding its disadvantages, it subsequently grew into the original project. 

On July 31, 2014, the project’s official launch took place.

Stellar was positioned as a decentralized payment system with the native cryptocurrency protocol called Stellar (STR, star).

In April 2015, Stellar blockchain developers, acting through the Stellar Development Foundation, released an updated protocol with a new consensus algorithm, which became operational in November 2015. The new algorithm used the Stellar Consensus Protocol (SCP), a cryptocurrency protocol created by Stanford professor David Maziers. When the updated protocol was launched, the name of the native cryptocurrency was changed to Lumen (XLM) to separate it from the name of the platform and the non-profit fund that developed the project, but some exchanges continue to use the old designation Stellar (STR).

In 2019, Stellar founder Jed McCaleb stepped down as head of the Stellar Development Foundation, but he took over as chief architect, whose responsibilities include developing a protocol and creating a strategy for mass adoption. Since March 2019, the Stellar Development Foundation has been chaired by former Mozilla COO Denelle Dixon.

Other key figures on the Stellar team include David Maziers, senior research fellow and professor of computer science at Stanford University; Chief Technology Officer mathematician and developer Nicholas Barry; and Stripe CEO Patrick Collison.

Outsource Stellar development is supported by numerous programming specialists. 

Lumen Token 

The Lumen token is a native asset of the Stellar Network. When the network was launched in 2014, the project issued 100 billion tokens (originally, they were called Stellar). In the beginning, the network’s inflationary mechanism called for the addition of 10% of new Lumen tokens annually. It was assumed that the weekly generated tokens would be sent by users to the development of network projects. Instead, they preferred to make money by staking. In addition, future inflation could cause network scaling problems. According to the developers, the inflation mechanism did not live up to expectations, so in October 2019, the Stellar network eliminated it as part of the protocol update to version 12.

Lumen tokens have two functions:

  • Prevent spam. Tokens are used to cover the cost of transaction fees as well as to maintain a minimum account balance. This model avoids network congestion. The commission per transaction is 0.00001 Lumen (approximately one 600,000th US cents). It takes 2-5 seconds to process the payment.
  • Provide the implementation of multicurrency transactions. Also, Lumen tokens serve as a bridge between currencies, enabling trade between two different currencies in a situation where the direct market is not large enough.

Consensus Mechanism 

Stellar does not support the PoW consensus algorithm, but uses the Stellar Consensus Protocol (SCP) cryptocurrency based on the Federated Byzantine Agreement model.

Protocol Architecture 

The architecture of the Stellar protocol is based on a ledger that reflects the current state of the system. It keeps a list of all transactions and balances owned by every account on the network. By analogy with the genesis block, the first register in history is called the genesis register.

A complete copy of the global Stellar registry is kept on each server that runs the Stellar software. Any user can run the Stellar server. The servers form the Stellar decentralized network, synchronizing and validating ledger data through consensus that is reached every 3-5 seconds.

Each ledger is linked to the previous state of the ledger, forming a chain. Updating the state of the registry occurs through the execution of a consensus algorithm.

Stellar gives users the ability to create and exchange assets of any type. All transactions with assets, with the exception of assets in XLM, are carried out on the basis of a credit system within which so-called gateways or anchors operate –
 trusted intermediary organizations that issue assets on the Stellar network and act as bridges between existing currencies and the network.

Intermediaries can be payment systems, banks and savings institutions.

Users choose trusted anchors; no trust in other participants is required. By uploading funds to the anchor, the user can make almost instant transfers of funds on the network. A request for a specific currency in one anchor is transmitted through the network of anchors, although each anchor works with a different currency and is completed within a few seconds. Each anchor has its own account.

Anchors accept deposits from members of the network and issue loans to the addresses of members’ accounts in the Stellar register, credits corresponding to monetary units (USD, etc.). Also, anchors allow you to withdraw funds through the issued loans.

No additional restrictions are imposed on the transfer of loans between users. For example, when the loan is linked to fiat currency, the user can make cross-border payments quickly and with a minimum commission.

The Stellar blockchain stores information about the exchange of all currency pairs. The digital asset value ratio is available in the order book.

According to the Stellar network rules, the account balance must be at least 0.5 XLM. This rule is intended to encourage users to clean up the registry by getting rid of abandoned accounts.

How Is Stellar Different From Ripple?

Ripple and Stellar are often seen as competitors. They are among the top five cryptocurrency payment systems (by market cap) and have one founder, Jeb McCaleb.

However, there are key differences between the platforms. Ripple was originally aimed at partnerships with large banks and financial institutions. Stellar’s mission is to increase the level of financial literacy and expand the population’s access to financial services.

Although the projects originally shared a common piece of source code, the current Stellar payment protocol, Stellar Core, uses the Stellar Consensus Protocol, which operates on the Federated Byzantine Agreement consensus model.

The Ripple protocol uses a proof-of-correctness consensus mechanism.

As of 2021, the Stellar blockchain is used by:

  • the financial consulting company Deloitte;
  • the payment network Tempo;
  • the mobile operator Parkway;
  • IBM Corporation (IBM Blockchain payment platform);
  • the decentralized cryptocurrency exchange platform Stellar X;
  • Sure Remit money transfer service;
  • the energy company Veridium;
  • Open Garden mobile application;
  • the payment terminal TillBilly;
  • the online platform Slice;
  • the wealth management company Smartlands;
  • the digital payments company Chynge;
  • the micropayment service Satoshi Pay and others.