This Project attached needs a page summarizing and needs a conclusion for the project
Stellar Lumens Group 6 Group 6 What is Stellar Lumens (XLM)? ● Cryptocurrency platform that focuses on remittance and cross-border payments ○ Alternative to companies like Western Union that charge expensive fees for remittances ● Often compared to Ripple (XRP) ○ Ripple is a technology that acts both as a cryptocurrency and a digital payment network for financial transactions ● Using Stellar, users can send currencies on the network to and from anywhere in the world ○ Users can liquidate/exchange their funds for other cryptocurrencies using the platform’s exchange anchors ● Can be bought on Coinbase, Upbit, Binance, Bittrex, Kraken, etc. Background on Stellar Lumens (XLM) ● First launched in 2014 by Jed McCaleb ○ Jed McCaleb also founded Mt. Gox and was a cofounder of Ripple ● Jed McCaleb partnered with lawyer Joyce Kim to launch the project ● The nonprofit Stellar Development Foundation was created in collaboration with Stripe (payment processing platform) CEO Patrick Collison ● $3 Million Investment from Stripe ● Stellar gained nearly 3 million users by the end of its first year Jed McCalebJoyce Kim Patrick Collison How Stellar Operates ● Open-Source and Decentralized ● Stellar Consensus Protocol (SCP) ○ Similar to bitcoin’s proof-of-work,but is is configurable, fast, and energy efficient ● Stellar’s ledger keeps track of 2 things ○ Account Balances = what the user owns ■ Ex: 100 peso tokens, 50 US tokens, or 500 Lumens ○ Operation = what the user wants to do with what is in their account ■ Ex. Send 50 peso tokens to xyz account ■ Ex. Sell 10 US tokens for 50 Lumens ● All balances and operations will be broadcasted to the network where it will be sorted and resolved ● Nodes around the world will be checking, publishing, and updating the ledger every 5 seconds Lumens (XLM) Stellar requires every account to have at least 1 Lumen Purpose ● To deter bad actors ● To prevent the Stellar network from becoming a random database riddled with spam Lumens can be a medium of exchange. Where to buy Lumens: ● On the Exchange ○ Coinbase ○ Kraken ● On the Stellar Network How to store Lumens: ● Hardware Wallet (cold) ○ Ledger Nano S ○ Trezor ● Digital Wallet (hot) ○ Keybase ○ Solar Wallet ○ Lobstr Sample Transaction Laura deposits and sends money 1. Laura deposits $100 USD into her digital wallet. If this is her first time using her wallet then she would have to go through the KYC verification process 2. Laura will receive 100 USD tokens 3. Laura sends money to Victor. a. Laura must specify 2 things: i. The amount of USD tokens she is sending, 50 USD tokens ii. The currency Victor will receive, BRL 4. Payment to Victor is complete Victor wants to withdraw from his wallet 1. Victor enters the amount of BLR he wants to withdraw from his wallet 2. Victor enters his KYC information 3. Victor enters his bank account information 4. Victor confirms his withdrawal 5. Victor’s BRL is safely deposited into his back account Laura in the US wants to send money to Victor in Brazil. Laura is going to send USD and Victor wants to receive his money in BRL. Traditional ● Takes days to confirm payments ● Stable currencies like USD and EUR are settled in real time ● Moving money from emerging economies will take longer ● With the old banking systems in place, fintech companies must establish a relationship and account with every country they wish to serve ● Operational costs are passed down to customers -> receive less money ● With the help of anchors, intermediaries are not needed to move money ● Recipients keep more of the money ● Payments are confirmed in 5 seconds Stellar’s Way Anchors bridge the gap between the Stellar network and traditional banking systems around the world Anchors are regulated financial institutions, money service businesses, or fintech companies Anchors offer one or both services: 1. Issue fiat tokens a. Issue 1:1 fiat backed-tokens (ex. 1 US Dollar = 1 US Token) b. Fiat reserves must equal to the value of tokens issued (ex: anchor issued 200,000 BLR tokens, anchor must have 200,000 BLR fiat in reserves) 2. Provide a fiat on/off ramp a. The Stellar network must be connected to a country’s banking system for KYC/AML purposes b. Banking system provides users the ability to deposit and withdraw Active anchors on the Stellar network ● Tempo Money Transfer (EURT) ● Cowrie Integrated Systems (NGNT) ● Settle Network (ARST) Anchors User Experience Key: SU = Sending user RU = Receiving user SA = Sending anchor RA = Receiving anchor Use cases ● International currency exchanges : Cowrie and Tempo: established a bi-directional corridor for exchanging the Nigerian naira and euros with speed, lower fees, and transparency in payments ● Access to online content: SatoshiPay: established a widget to access small amount of payments to pay-per-view content with one click access, and low transaction fees ● Cross border utility payments : Saldo: workers in the US can send money to pay utility bills in Mexico with low fee currency conversions, with speed and transparency. Pros and Cons of Stellar Pros Cons Speed- an average transaction confirmation of about 5 seconds SDF holds most of the supply- The foundation owns about 82% of the total supply of of XLM Low fees- requires 0.00001 xlm for processing transactions Reduced transparency- Stellar removed its quarterly budget and founder salaries plus lumen grants for employees Steadiness- tokens created at inception, and has a fixed inflation mechanism SEC issues- Could the SEC file against Stellar on the basis of being a security not a currency, similar to Ripple Multicurrency transactions- network finds lowest exchange rate for transactions between different currencies Partnerships- has partnered with IBM, Deloitte and other corporations which boosts credibility Current Events The Stellar Development Foundation has executed a protocol upgrade to its network after an issue was detected that caused several nodes to go dark. “All affected nodes should be able to upgrade to Protocol-16 compatible software and restore network access,” said the foundation. The price has increased 10% over the last month. Stellar XLM ETP l(ticker: AXLM) listed on the Swiss SIX Exchange on April 26, 2021 Q&A