Stellar (XLM) Rating = 350/1000
Technology (0 to 300) = 170
- Speed (0 to 50) = 40
Stellar’s transaction speed is estimated to be 3-5 seconds making it one of the fastest cryptocurrencies available today. Stellar XLM can theoretically handle over 1,000 transactions per second, and the number can increase depending on the hardware used to conduct the transactions. With such a quick transaction speed coupled with the high number of transactions per second, Stellar is giving other cryptocurrencies such as BCH and Litecoin an enormous challenge to improve their transaction speed.
- Cost (0 to 50) = 50
Stellar has a non-profit governance approach; therefore, you would expect the cost of the transaction to be meagre, i.e. <$0.00001. This means 300,000 transactions would cost $0.01, which is close to zero transaction charges.
- Scalability (0 to 50) = 20
Stellar is very scalable as it can process 1,000+ trx/sec with 1 billion accounts – that’s more than Bitcoin and Ethereum combined. The consensus protocol runs through XY servers which can get the TPS to maximum levels when the demand arises. Moreover, Stellar adopted the lightning technology in 2018 hence increasing its scalability capabilities. It remains to be seen however if Stellar can really scale further as they claim considering the cryptocurrency is a copy of an older version of the XRP protocol and the brains who designed and developed it remain working on XRP and not Stellar.
- Reliability (0 to 50) = 5
The stellar network is very reliable and connects banks, payment systems and users around the world, providing fast, affordable and reliable cross-border payments. Stellar can incorporate other cryptos and synchronises with financial structures effortlessly. In May 2019 however the Stellar network went down for over an hour without anyone there noticing it! This is a huge worry.
- Environmental Impact (0 to 50) = 50
Unlike Bitcoin and Litecoin, which uses the Proof of Work (PoW) consensus mechanism that relies on mining, Stellar uses Stellar Consensus Protocol (SCP) which does not support mining. This means that Stellar is a green cryptocurrency and more environmentally friendly considering that mining consumes lots of electricity which depletes environmental resources.
- Decentralization (0 to 50) = 5
Stellar claims to be a fully decentralised platform that allows users to trade money with each other, using Lumens (XLM) as a medium and “anchors” to handle the fiat currency aspects. And in case you missed it, the bio of Stellar Foundation states that they are a non-profit foundation. Therefore, the network cannot be governed in a centralised manner, not even the least.
Sadly in practice this is far from being the case currently as has been shown during the network crash. Further examples of centralisation have consistently occurred and despite the Stellar Foundation being a non profit, controversial owner Jed McAleb is at the helm and between Jed and the foundation they own 90% of all XLM coins.
Security (-250 to 0) = -170
- DNS Hijacking (-100 to 0) = -80
On August 2019, DNS hackers accessed Blackwallet, a Stellar Lumen (XLM) web wallet and got away with 669,920 lumens (worth about $400,000). The hacker transferred the loot to Bittrex exchange. DNS attacks have also been witnessed in Ethereum where DNS hackers made away with $270,000 in ETH. This means the DNS attacks are concurring hence a major security vulnerability. The platform should develop mechanisms to prevent future attacks of similar nature.
- Potential for Being Banned (-100 to 0) = -40
XLM is listed on major cryptocurrency exchanges such as Binance, Coinbase Pro, Poloniex, and Bittrex to mention a few. No exchange has raised concerns or showed signs of delisting the Stellar token. There are currently 105.22 billion XLM in total supply. While it is a green cryptocurrency as well as not being a privacy coin, there are question over whether XLM is a security. Jed McAleb has a very chequered past and created Stellar which is actually an inflationary coin with a 5% increase in coin supply despite barely even being used yet. Coupled with the founders and foundation owning 90% of tokens this raises questions.
- Network Vulnerabilities (-50 to 0) = -50
On May 15th, the XLM network stalled for 67 minutes due to failure of reaching consensus in the network hence pointing at a possible vulnerability. Unlike other blockchains which can temporarily fork when consensus is not reached, the XLM network halts completely making the network vulnerable. In April 2019, South African researchers analysed the SCP consensus algorithm and nodes on the XLM network. In the analysis, the researchers established that the XLM nodes are unable to run SCP if two nodes fail, which could lead to a security risk. Stellar’s developers should come up with a proper consensus mechanism to prevent the highlighted security and network vulnerabilities.
Use Case (0 to 500) = 260
- Initial Main Use Case (0 to 100) = 25
Stellar was designed to provide fast, cheap and reliable cross-border payments by offering a network that would connect banks, payment systems and people around the globe. With Stellar partners talking about using stable coins on the network rather than XLM we have to question if Stellar is living up to the promise? If XLM is not being used then the use case is lost.
- Mainnet Live (0 to 200) = 200
The stellar platform is an original and functional blockchain which can complete actual cross-border payments with the XLM token possessing real economic value. Moreover, the Kin Ecosystem Foundation is planning to launch its own blockchain-based on Stellar. Kin’s blockchain will, therefore, be a Testnet to Stellar. This is a huge boost to its Mainnet.
- Additional Use Case (0 to 100) = 10
Stellar can also be used as a decentralised exchange through its subsidiary, StellarTerm, to facilitate micropayments and remittances (partnership with Deloitte). Also, Stellar’s partnership with IBM is projected to make its token be used as a stablecoin. IBM however look like they are having cold feet about their Stellar partnership.
- Additional Working Products (0 to 100) = 25
The XLM ecosystem also includes Interstellar, which allows enterprises and institutions to use and build on the XLM network. Interstellar also combines the Chain and Light-year brands which provide cloud-based ledger services to enable users to manage their balances in wallets or exchanges. As briefly mentioned above, Stellar’s subsidiary, StellarTerm, is a robust and functional decentralised exchange that allows users to send, receive and trade assets.
Core Team, Partnerships & Developers (0 to 200) = 90
- Core Team & Developers (0 to 100) = 50
Ripple’s ex-founder Jed McCaleb is credited as Stellar’s founder along with David Mazieres. The development team is made of technologists, scientists, designers, and business people who are all dedicated to build an efficient, freer and more inclusive cross-border transfer platform. Stellar Foundation offices are based in New York City and San Francisco and unbiasedly employs team members from all around the world.
- Partnerships (0 to 100) = 40
Stellar has partnered with numerous institutions. These include remittance agencies Tempo and ZED, ICOs Smartlands and Mobius, at least 10 stable coins including Stronghold and Novatti and Hyperledger. Stellar has also collaborated with Wirex allowing users to buy, store, exchange and spend XLM on the Wirex platform. Among all the partnerships, the most notable one is the partnership with IBM to launch World Wire, which will be built on the XLM network to connect banks. Also worth mentioning, Stellar partnership with Deloitte will facilitate affordable and rapid payment systems via the Deloitte Digital Bank.
Sadly a number of partners are taking slightly backwards steps which is not a good sign. The partnership with IBM would have been massive but this turns out now to be non-exclusive with IBM spreading their wings out further. Why the change in sentiment?
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