How to Use Stellar (XLM): Complete Beginner’s Guide [2025 Update]

AI summary

Stellar (XLM) is gaining renewed attention in 2025 due to its fast, low-fee transactions and expanding ecosystem, making it a practical blockchain for everyday users and small businesses. The article explains Stellar’s unique features—such as its decentralized exchange, environmentally friendly consensus protocol, and the new Soroban smart contract platform—while also providing a guide to buying, storing, and using XLM securely with Tangem Wallet. Stellar stands out for its focus on accessibility, real-world utility, and its growing role in decentralized finance.

If you’ve been hearing about Stellar (XLM) and wondering why it’s gaining attention again in 2025, you’re not alone. With faster transactions, lower fees, and a growing ecosystem of financial tools, Stellar is positioning itself as one of the most practical blockchains for everyday users. This guide will help you understand what Stellar is, how it works, and how to buy, store, and use it securely with the Tangem Wallet, the easiest and safest way to hold your Stellar Lumens (XLM).

What Is Stellar (XLM)?

Stellar was founded in 2014 by Jed McCaleb, the co-founder of Ripple (XRP), and Joyce Kim. The Stellar Development Foundation (SDF), a non-profit organization dedicated to making global financial systems more accessible, manages the network. While Ripple focuses on serving large financial institutions, Stellar’s mission is to empower individuals and small businesses by enabling fast, affordable cross-border payments.

At its core, Stellar is about bridging the gap between traditional banking and blockchain. The network allows users to send money globally — dollars, euros, or bitcoin in just a few seconds and at a fraction of a cent per transaction.

Stellar Foundation vs. Stellar Network

It’s important to distinguish between:

• Stellar Development Foundation (SDF): The organization that oversees development, partnerships, and ecosystem growth.
• Stellar Network: The decentralized, open-source blockchain where transactions occur.

Read our article on Ripple (XRP) in 2025: Price Prediction and ETF Rumors.

How Does Stellar Work?

Stellar is more than just a digital currency; it’s an infrastructure for moving value across borders. In the Stellar network, anchors bridge real-world currencies and the blockchain. These trusted entities (like banks or fintech platforms) issue tokens on the Stellar blockchain, representing tangible assets like USD or EUR.

Lumens (XLM): The Native Token

Lumens (XLM) serve two primary purposes:

1. They prevent spam by requiring a small transaction fee and a minimum account balance.
2. They facilitate multi-currency transactions between anchors, making exchanges seamless.

Decentralized Exchange (DEX)

Stellar has a built-in decentralized exchange, where users can trade assets directly on-chain without relying on centralized platforms. That capability positions Stellar as one of the few blockchains that natively support asset trading.

Stellar Consensus Protocol (SCP)

Instead of mining, Stellar uses the Stellar Consensus Protocol (SCP) — a unique mechanism that achieves agreement across the network without wasting energy. It allows for fast, secure, and environmentally friendly consensus.

Smart Contracts and Soroban

Stellar is expanding beyond payments with Soroban, its smart contract platform. Soroban enables developers to build DeFi apps, NFTs, and programmable financial tools directly on the Stellar blockchain.

Why Use Stellar in 2025?

• Low Fees and High Speed

Stellar transactions typically cost less than a fraction of a cent and confirm in 3–5 seconds. Such capability makes Stellar ideal for remittances, micropayments, and global transfers.

• Ecosystem Growth

2025 is seeing a new wave of projects integrating with Stellar, from tokenized assets to decentralized finance (DeFi) applications through Soroban.

Comparing Stellar with Ripple and Hedera

How to Buy Stellar (XLM)

Buying Stellar is simple. Here’s how to do it safely.

1. Choose a Crypto Exchange

Start by selecting a reputable exchange that lists XLM. Popular options include Binance, Coinbase, Kraken, and Bitstamp. Always check fees and supported regions.

2. Complete KYC and Fund Your Account

To comply with regulations, you must verify your identity (KYC). Once verified, you can fund your account with fiat currency (USD, EUR, etc.) or other cryptocurrencies.

3. Buy XLM and Withdraw to Tangem Wallet

Search for Stellar (XLM) on the exchange, place your buy order, and once completed, withdraw your XLM to your Tangem Wallet for secure offline storage.

Tip: Avoid leaving funds on exchanges — they’re prime targets for hacks.

How to Store Stellar (XLM) Securely with Tangem Wallet

Storing your XLM safely is just as important as buying it.

Setting Up Tangem Wallet for Stellar

1. Download the Tangem App from the App Store or Google Play.
2. Activate your card by tapping it to your phone via NFC.
3. Add Stellar (XLM) from the app's asset list.
4. Your wallet is now ready — no setup codes or seed phrases required.

Sending and Receiving XLM

1. To receive XLM: Tap your Tangem card, select Stellar, and share your public address.
2. To send XLM: Tap your card, enter the recipient’s address, confirm the amount, and authorize by tapping your card again.
3. Transactions are signed securely on the chip — your private keys never leave the card.

How to Transfer Stellar with Tangem Wallet

1. Tap your Tangem card to your phone.
2. Select Stellar (XLM).
3. Enter the recipient’s Stellar address and amount.
4. Confirm and sign with your Tangem card.
5. The system securely sends your XLM on-chain within seconds.

Checking Balance and Transaction History

You can check your real-time balance and transaction history directly in the Tangem App. Everything is displayed clearly, including transaction IDs and confirmations. Tangem’s cold storage model means your funds are safe even if your phone is lost.

Real-World Use Cases

• Cross-Border Remittances: Send money across continents instantly with minimal fees.
• Micropayments: Pay freelancers or content creators globally without traditional banking intermediaries.
• Aid and NGO Programs: Organizations use Stellar for transparent and traceable aid distribution.

Stellar vs Ripple – What’s the Difference?

While both networks share similar roots, Stellar focuses on accessibility and open participation, whereas Ripple caters to institutional banking. Check out Stellar Developer Documentation.

The Future of Stellar – Soroban & DeFi

With Soroban smart contracts, Stellar is expanding into decentralized finance, opening doors to new applications:

• Decentralized lending and savings
• On-chain stablecoins
• Tokenized real-world assets

Tangem users will soon be able to store and interact with DeFi assets directly from their Tangem Wallet, keeping their private keys completely offline.

FAQs about Stellar (XLM)

What is XLM used for?

XLM is used to facilitate transactions on the Stellar network and to enable cross-asset transfers between different currencies.

Is Stellar a good investment?

Stellar focuses on real-world utility, not speculation. While its price may fluctuate, its role in global payments gives it long-term relevance.

How to transfer XLM?

You can transfer XLM using any Stellar-compatible wallet — including Tangem. Simply scan, tap, and send securely.

What’s the minimum XLM reserve?

Each Stellar account must hold a small minimum balance (currently 1 XLM) to remain active and prevent spam.

How is Stellar different from Ripple?

Ripple serves banks; Stellar serves people. Ripple is corporate; Stellar is community-driven.

Where to store Stellar safely?

Tangem Wallet offers hardware-level protection for your XLM, ensuring your assets stay safe and accessible anywhere.

Conclusion

Stellar (XLM) remains one of the most practical and purpose-driven blockchains in 2025. With ultra-low fees, instant transactions, and expanding DeFi potential through Soroban, Stellar bridges traditional finance with the digital asset economy. Paired with Tangem Wallet, you can harness Stellar’s full power securely and effortlessly. There are no passwords or seed phrases, just a simple NFC tap.