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Stellar is a decentralized blockchain-based platform and cryptocurrency designed to facilitate fast, low-cost cross-border transactions and enable the creation of digital assets. It was created in 2014 by Jed McCaleb, one of the co-founders of Ripple. Stellar operates with its native cryptocurrency called Lumens (XLM), which is used to facilitate transactions and prevent spam on the network. Unlike Bitcoin, which focuses primarily on being a digital currency, Stellar aims to bridge traditional financial systems and enable seamless transfers of various assets, including currencies, stocks, and commodities. The primary goal of Stellar is to make financial transactions more accessible and affordable, particularly for underserved populations and regions with limited banking infrastructure. Stellar achieves this through its unique consensus algorithm, the Stellar Consensus Protocol (SCP). SCP enables decentralized agreement among network participants, eliminating the need for a central authority to validate transactions. This consensus protocol ensures the security and integrity of the network while allowing for fast transaction settlement times, typically within a few seconds. Additionally, Stellar incorporates a decentralized exchange feature that enables users to convert one asset to another directly on the network, promoting liquidity and reducing the need for third-party intermediaries.

Stellar operates on a distributed network of servers that maintain a decentralized ledger called the Stellar Consensus Ledger (SCL). The ledger records all transactions and account balances, and it is accessible to all network participants. To initiate a transaction on the Stellar network, a user creates an offer, specifying the asset they wish to send and the asset they want to receive. Stellar's decentralized exchange then searches for a path of trust relationships and liquidity to facilitate the conversion at the lowest cost. The exchange relies on order books and market makers to provide liquidity for asset pairs. Stellar introduces the concept of anchors, which are entities that bridge the gap between the traditional financial system and the Stellar network. Anchors issue digital representations of real-world assets, such as fiat currencies, on the Stellar network. These representations, known as tokens, can be transferred and traded on the network, enabling cross-border transactions. Anchors also serve as the link for users to deposit and withdraw funds from the Stellar network.