Footprint Analytics: Stellar Targets Rebound In 2022

For [email protected] Analytics

Date: January 8, 2022

Data source: Star board

Last month, the Stellar Development Foundation (SDF) participated in a cryptocurrency hearing hosted by the U.S. House of Representatives Committee on Financial Services.

CEO Denelle Dixon presented the Stellar decentralized payment system technology and its applications. With the recent news that Ukraine and Mexico will use Stellar to run their digital currencies, Stellar is back in the spotlight.

what is stellar

Launched in 2014, Stellar is a platform that supports cross-border transactions between currency pairs and aims to solve global payment problems through blockchain technology.

The global payments and settlement system is complicated with various fiat currencies and the financial and regulatory systems of each country.

Stellar aims to solve this problem by making transfers between different currencies efficient (within 5 seconds) and low cost (less than 1 cent) through decentralized transaction validation.

The current state of Stellar

In its seven years of development, Stellar used to have an illustrious history.

It was once one of the top 10 blockchain projects in terms of market capitalization. And it even set a record for a 100x magnification in Symbolic price before summer DeFi.

Unlike projects in the world of cryptocurrencies, Stellar has created many partnerships with the traditional financial community, including IBM and national financial institutions.

Footprint Analysis - XLM Price
Footprint Analysis – XLM Price

However, according to Footprint Analytics, Stellar is currently growing slowly.

After years of growth, it has a TVL of about $ 1.5 billion to date, ranking 40th among public broadcasters, and this rate is much lower than emerging public broadcasters just starting out.

Footprint analysis - Stellar TVL
Footprint analysis – Stellar TVL

stellar ecosystem it is very underdeveloped, with only two projects at present and very homogeneous.

Footprint Analytics -TVL protocols in Stellar
Footprint Analytics -TVL protocols in Stellar

Reasons for Stellar’s slow growth

Incentives for poor ecosystems

At the time of Stellar’s creation, an inflation mechanism was installed to prevent a reduction in the circulation of XLM.

Every year the inflation scheme generates tokens equal to 1% of Stellar’s total supply and represents more than 0.05% of Stellar’s total share receiving additional XLM coins.

The purpose of the inflatable mechanism is to incentivize. However, Coinmetrics analysis shows that 98% of the incremental XLM coins went to the SDF (Stellar Development Foundation) and did not benefit the Stellar project.

One of the reasons for this is that the foundation has been involved since the early days and is therefore able to participate in the annual distribution of newly generated tokens.

The second reason is that most of the Stellar participants joined during the 2017 explosion and are speculative users with little involvement in the ecosystem.

XLM inflation CoinMetrics
XLM inflation CoinMetrics

The omission of SDF

The foundation owns a large number of tokens due to inflationary mechanisms. However, the foundation has not been able to use these tokens to help the project run better. Crypto Slate analysts stated in 2019 that the foundation has only consumed $ 40,000 for community projects. Having a large amount of money, but not using it well, shows the inaction of the foundation.

In 2019, the Stellar Development Foundation initially mitigated the token mismatch by finalizing its inflation plan and destroying more than 50% of its tokens. However, XLM still needs to expand its usage scenario.

The road ahead for Stellar

Although Stellar ended up lagging since its launch, it is scheduled to make a comeback starting in 2021.

With the explosion of DeFi projects, multi-currency and cross-chain transfers are a current blockchain weak point, and Stellar offers one of the solutions that define a new standard for global payments.

Stellar has gained recognition in the market through expanded payment companies, national banks, financial institutions, and more, gaining recognition from multiple parties and several strong partners as a global solution for cross-border payments.

EVM compatibility

The incompatibility of Stellar’s contracts with EVM means that developers cannot quickly deploy projects on Ethereum to Stellar in February 2021.

FlareNetworks has announced the integration of Stellar Lumens (XLM) with its smart contract platform, enabling compatibility with the Ethereum blockchain. If it lands successfully, Stellar will be even more scalable.


Stellar’s recent moves show that it continues to engage with the financial community and bridge the gap between traditional and chain payments.

We can keep an eye on Stellar and look forward to its continued development to solve global payments challenges.

What is footprint analysis?

Footprint Analytics is an all-in-one analytics platform for visualizing blockchain data and discovering insights. Clean and integrate data chain so that users of any level of experience can quickly start researching tokens, projects and protocols. With over a thousand dashboard templates plus a drag and drop interface, anyone can create their own custom charts in minutes. Discover blockchain data and invest smarter with Footprint.

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Posted in: Stellar, Analysis

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