Stellar (XLM) vs. Ripple (XRP): What Are They?

Ivan Skladchikov
December 25, 2019
Stellar (XLM) vs. ripple (XRP) article featured image

Many people heard about these currencies. But when comparing Stellar vs Ripple most people can’t point out their differences. Or their similarities for that matter. If that’s you, this article will your questions about both networks and their cryptocurrencies.

We will start with an overview of each project, look at a brief history and some trivia. Then we will consider their key differences and similarities.

Let’s dive right in!

Stellar vs. Ripple: Overview

At a glance, when you compare Stellar vs Ripple they seem pretty similar. After all, they address the same problems in the banking sector. For a client, these problems are:

  • High money transfer fees. Banks and payment systems like Western Union will charge you up to 30%, depending on where you send your funds and how many correspondent banks take part in the process.
  • Poor сurrency exchange rate. In your transfer implies currency exchange (especially if you deal with 2 or more less popular currencies), the banks often apply very unfavorable exchange rates. For a client, it means more money wasted. For a bank — more money earned.
  • Low speed. If you send money abroad or just to another bank, the process may take several business days, or even longer if some problem emerges.

Ripple and Stellar facilitate cross-border payments. Unlike many other cryptocurrencies, XLM and XRP are not here to ‘kill banks’.

Both companies were founded by the same person — Jed McCaleb, a well-known crypto entrepreneur — and their histories are linked to each other.

Ripple appeared in 2012 as a cross-border payment platform. Soon, Jed McCaleb started having misunderstandings with his partners and left Ripple.

In 2014, McCaleb and new partners created the Stellar Development Foundation — a fork of Ripple.

Ripple and Stellar market caps displayed on CoinMarketCap website

XRP and XLM rank 3rd and 11th by market capitalization. Source CoinMarketCap.

Below is some comparative data for both currencies, at the time of writing (mid-December 2019).

Stellar (XLM)

Ripple (XRP)

Market cap

$893 577 397

$8 131 100 713




Max supply/
Circulating supply

50 000 000 000 XLM/
20 054 779 554 XLM

100 000 000 000 XRP/
43 310 265 523 XRP

Now let’s explore each currency in more detail.

Ripple offers a comprehensive financial system
Ripple products, with descriptions and benefits.

What Is Ripple

Ripple was launched in 2012 by Jed McCaleb in partnership with David Schwarz and Chris Larson. Its cryptocurrency XRP now ranks third by market capitalization, following Bitcoin and Ethereum.

Interested to know what crypto market capitalization means and how it’s calculated? Read our guide.

Ripple vs. XRP: What’s The Difference

Many people don’t get the difference between Ripple and XRP, thinking these names are interchangeable. Let’s make it clear right away — XRP is a cryptocurrency, and Ripple (RippleLab) is a software company that issued XRP

The Goal Of The Project

The idea behind Ripple was to create a blockchain solution that would let financial institutions move money in a matter of seconds. It aimed to reduce the cost of international transfers. Potentially, Ripple could be of great benefit to the banking system. The current system is costly, slow and unable to meet the needs of a modern customer. Doesn’t matter if it’s a person or a business.

Currently, this banking sector is dominated by a centralized network called SWIFT. SWIFT  facilitates a lot of financial processes. But this system is pricey and slow. It uses correspondent banks for international transfers and each bank charges a commission.

Unlike SWIFT, Ripple uses decentralized blockchain technology. This allows them to bypass intermediaries and transfer money between banks in a fast, cheap and direct manner. Although the Ripple system has a particular focus on institutional payments, it can also be used for moving funds between individual wallets.

What Is RippleNet

RippleNet is the network of all the payment providers (banks, payment systems, and other similar financial institutions) using Ripple solutions and products.

Ripple Products

Presently, the main products of Ripple area xRapid, xCurrent, and xVia.

  • xRapid allows banks to make fast and cheap transfers in XRP tokens.
  • xCurrent is focused on tracking the way money makes when it moves between banks. It doesn’t use XRP.
  • xVia is a payment interface that simplifies work with xCurrent and xRapid.

Now, let’s take a look at Stellar, Ripple’s main rival.

A transaction starts in bank A, goes through Stellar Network and arrives at bank B
This is how Stellar works for senders and recipients located in different countries.

What Is Stellar

Stellar Lumens is 2 years younger than Ripple, but it has the same co-founder. Jed McCaleb created this company in 2014 after leaving Ripple.

Stellar and Lumens

They related in the same way as Ripple and XRP. Stellar is the name of the company and the technology which it develops. Lumens (XLM) is the in-house cryptocurrency that now ranks 11th by market cap.

Stellar: Main Features

Much like Ripple, Stellar seeks to make international money transfers faster, cheaper and easier via the blockchain technology. Unlike Ripple, targeted on helping banks, Stellar is reaching out to unbanked people all over the world. It wants to provide them a way to easily manage and safely control their money.

Stellar is a partner of many banking institutions and such projects are SatoshiPay, Mobius, and HashCash.

Ripple, Stellar and Bitcoin compared
Stellar, Ripple and Bitcoin compared.

Stellar vs. Ripple: Key Similarities

Comparing Stellar vs Ripple you can’t miss that they are pretty similar. Let’s take a closer look at their similarities.

No Mining

Both projects, despite being decentralized and blockchain-based, do not let the public run full nodes, required for mining. The nodes can only be run by the developers themselves, or by banks and other private financial institutions.

Low Processing Costs

Both Stellar and Ripple use the distributed ledger to verify money transfers and track the movement of funds across banks. It means tiny fees: both networks will charge you a fraction of a coin for a transaction.

High Speed

For the same reason, payments are processed by both networks very rapidly — within a few seconds.

‘Light’ Value

Both Stellar and Ripple are interested in keeping the price of their coins comparatively low. If it gets very expensive (like BTC), they would be less mobile and therefore less convenient for smaller operations.

Centralized’ character

With the coin supplies controlled by the developers, who allow no public nodes, both Stellar and Ripple are often accused of being ‘too centralized’ for blockchain projects. Especially, Ripple.

Stellar vs. Ripple: Key Differences

Now it’s time to see to consider the basic differences between Stellar and Ripple. Let’s have a closer look at them.

Helping Banks vs. Helping The Unbanked

The projects have different priorities: Stellar targets the unbanked population in poorer countries vs Ripple that targets institutions. Therefore, Stellar and Ripple are somewhat different ideologically. McCaleb, one of the Stellar CEOs, regularly donates XLM to those in need.

Different Consensus Protocols

A consensus protocol is a technology that confirms transactions in the network without using a trusted intermediary. For instance, BTC uses the Proof-of-Work consensus model. As for Stellar and Ripple, they use the so-called ‘Stellar Consensus Protocol’ (SCP) and the ‘Ripple Consensus Algorithm’ (RCPA).

Coins Distribution

Of the 100 bln XRP originally created, 20 bln XRP were withheld by the Ripple co-founders. The remaining 80% went to Ripple Labs. They serve to increase the liquidity and thus strengthen Ripple’s position on the market.

In the case of Stellar, 100 bln coins have originally been pre-mined. The SDF (Stellar Development Foundation) intended to distribute 95% of XLM ‘to people’ and businesses, including those who otherwise would never be able to get it. The remaining 5% were withheld by SDF for ‘future development and operational costs’. At the end of 2019 the developers ‘burned’ (reduced the number of) tokens in existence ‘to become more efficient’. As a result, over 85 000 000 000 tokens intended for different purposes turned into 50 000 000 000.

Earlier, Stellar had a built-in inflation mechanism, created to use inflation-generated XLMs to support selected projects. It also made Stellar different from Ripple which had no such thing.
In the 4th quarter of 2019 it thу Stellar developers decided to disable the inflation as the mechanism was not working as expected.


We hope that after reading this article you don’t have any questions on how Stellar compares vs ripple.

Although these networks seem to be very similar at first sight, there are some important features that make them different — on technical and ideological levels.

Want to learn more about similar cryptocurrencies? Read our ETC vs ETH guide.

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