Stellar (XLM) and Ripple (XRP) are blockchain platforms built for fast, low-cost cross-border transactions. While both share similarities, they target different audiences and operate under different structures.
- XRP (Ripple): Focuses on institutional money transfers, run by a for-profit company, and uses the Ripple Protocol Consensus Algorithm (RPCA).
- XLM (Stellar): Targets individuals and small businesses, managed by a non-profit foundation, and uses the Stellar Consensus Protocol (SCP).
Key Differences
| Feature | XRP (Ripple) | XLM (Stellar) |
|---|---|---|
| Organization Type | For-profit | Non-profit |
| Primary Focus | Institutions | Individuals and small businesses |
| Network Structure | Centralized | Decentralized |
| Transaction Speed | ~4 seconds | ~5 seconds |
| Transaction Cost | ~0.00001 XRP (~$0.0014) | ~0.00001 XLM (~$0.0000009) |
| TPS (Practical) | ~38 | ~136 |
| Market Cap | $127.68 billion | $9.75 billion |
| Legal Status | Facing SEC lawsuit | Recognized as a cryptocurrency |
Both networks are efficient and affordable but serve different purposes. XRP is ideal for banks and institutions, while XLM focuses on financial inclusion for individuals and small businesses.
Which One to Choose?
- Choose XRP if you need enterprise-level solutions or work within banking systems.
- Choose XLM if you prioritize decentralization and affordable, small-scale transactions.
This article explores their differences in detail, covering technical design, transaction costs, regulatory status, and market activity.
Technical Foundation
How Each Network Confirms Transactions
XLM and XRP differ significantly in how they confirm transactions. Stellar uses the Stellar Consensus Protocol (SCP), which operates on a Proof-of-Agreement system. This process achieves consensus through quick communication between nodes, skipping energy-intensive mining. It relies on "quorum slices", which are groups of trusted participants, to validate transactions efficiently .
"The Stellar Consensus Protocol (SCP) provides a way to reach consensus without relying on a closed system to accurately record financial transactions." – Stellar.org
Ripple’s XRP Ledger, on the other hand, uses a different approach. Its system functions as long as fewer than 20% of its trusted validators are faulty. Validators adjust their proposals step by step until they reach agreement . These methods directly shape the performance and structure of both networks.
Network Structure
Stellar and Ripple also differ in how their networks are built and perform:
| Feature | Stellar (XLM) | Ripple (XRP) |
|---|---|---|
| Network Type | Decentralized | More centralized |
| Consensus Model | Federated Byzantine Agreement | RPCA |
| Practical TPS | 136 | 38 |
| Theoretical TPS | 1,000 | 1,500 (up to 50,000 optimized) |
| Validator Structure | Open validator participation | Curated validator list |
Stellar’s design focuses on decentralization and horizontal scalability. As the network expands, it spreads the workload across multiple nodes . This aligns with its goal of fostering an open and transparent system.
"… is a new model for consensus called federated Byzantine agreement (FBA). It promotes organic network growth by allowing open membership, in contrast to traditional models that rely on a fixed membership list." – Stellar Whitepaper
Ripple, while more centralized, prioritizes speed and performance. Under specific optimized conditions, it can handle up to 50,000 transactions per second. However, its current practical average is closer to 38 TPS .
Stellar also emphasizes transparency by requiring nodes to provide public identification.
Speed and Network Capacity
Transaction Times
Both XLM and XRP networks boast transaction speeds that far outpace traditional banking systems. XRP processes transactions in just 4 seconds , while Stellar takes around 5 seconds . These quick settlement times highlight their ability to handle transactions efficiently, even under heavy network demand.
When congestion happens, the networks handle it differently:
| Network Response | XRP | XLM |
|---|---|---|
| Congestion Management | Fee escalation adjusts fees in real time | Surge pricing prioritizes higher fee bids |
| Base Transaction Fee | 0.00001–0.0005 XRP | 0.00001 XLM |
| Network Focus | Geared toward institutional transactions | Designed for individuals and small businesses |
Maximum Transaction Limits
Processing capacity is another area where these networks differ. Stellar’s architecture includes a structured approach to managing transaction volume:
- The public Stellar network supports up to 1,000 operations per ledger .
- During busy periods, 52% of transactions still use the minimum fee .
- In January 2021, the average fee per operation was 1,221 stroops (equivalent to 0.0001221 XLM) .
"The solution: submit higher fee bids. Fees on Stellar are dynamic, so the fee you submit is the maximum you’re willing to pay. You will be charged the minimum necessary to make the ledger." – Justin Rice
This flexible fee system ensures the network remains efficient while keeping costs manageable. On the other hand, RippleNet has proven to be cost-effective for institutions, helping banks cut operational expenses by as much as 60% .
Transaction Costs
Fee Comparison
Transaction costs are a key factor when comparing the XLM and XRP networks. Both offer extremely low fees, especially when stacked against other cryptocurrencies.
XLM charges a fixed minimum fee of 0.00001 XLM per transaction, which is about $0.0000009 . This makes Stellar an appealing option for micropayments and small-value transfers. Denelle Dixon, CEO of the Stellar Development Foundation, highlights this advantage:
"On the Stellar payment network, businesses and developers benefit from near-instant settlement and transaction fees of fractions of a cent."
XRP, on the other hand, requires a base fee of 0.00001 XRP (10 drops) , translating to roughly $0.0014 per transaction. However, fees can sometimes be as low as $0.0002, depending on network conditions . These rates are still far below those of major cryptocurrencies like Bitcoin (averaging $3.50) and Ethereum (averaging $1.48) .
| Fee Aspect | XLM | XRP |
|---|---|---|
| Fee Structure | Network fees | Burned tokens |
| Fee Purpose | Spam prevention | Network protection |
| Dynamic Pricing | Congestion-based | Load-based |
| Fee Mechanism | Resource + inclusion fee | Load factor system |
These fee models influence how users and businesses decide between the two networks. Transaction costs can also vary based on the size of the transaction and the network’s activity level.
Cost by Transaction Size
Both networks handle transaction scaling differently, building on their fee structures. Stellar calculates fees as the sum of a resource fee and an inclusion fee . Additional charges may apply for smart contract operations, depending on the number of operations involved.
For XRP, the cost scaling is tied to a load factor system:
- Base transactions start at 10 drops
- High network activity triggers automatic fee adjustments
These scaling mechanisms are especially relevant for high-volume transactions. For instance, a January 2025 analysis by Fuze Finance noted:
"Stellar (XLM) is suitable for businesses processing international payments, with transaction fees of approximately $0.00001 per transaction. Ripple (XRP) is beneficial for financial institutions using Fuze’s B2B2C model to process high-value transactions at minimal fees, with transaction fees around $0.0002 per transaction."
XRP fees are permanently destroyed as a safeguard against spam . While XRP itself doesn’t carry transfer fees for its native token, issuers of other tokens on the XRP Ledger can impose transfer fees for their assets .
Current Applications
Main Market Sectors
XLM and XRP cater to different areas within the financial landscape. Stellar (XLM) focuses on improving access to financial services through cross-border payments, micropayments, asset tokenization, and decentralized exchanges. Ripple (XRP), on the other hand, is geared towards facilitating international money transfers and addressing liquidity challenges with its On-Demand Liquidity (ODL) solution.
These targeted approaches align with their underlying technical designs and fee structures.
XLM’s Key Markets:
- Cross-border payments
- Micropayments
- Asset tokenization
- Decentralized exchanges
- Broader financial access
XRP’s Core Areas:
- International transfers via RippleNet
- Liquidity solutions through ODL
Ripple’s ODL is particularly effective, reducing transaction costs by 40–60% compared to traditional systems . It’s predicted that over 80% of Japanese banks will adopt Ripple’s solutions by 2025 .
Business Partnerships
Both networks have secured partnerships to strengthen their ecosystems and expand their reach.
Stellar (XLM) Partnerships:
- MoneyGram International: Links Stellar’s digital infrastructure with a global retail network .
- Franklin Templeton: Introduced a tokenized money market fund .
- Vibrant: Offers inflation protection solutions using Stellar USDC .
- BiGGER: Supports cross-border employee payments .
Ripple (XRP) Partnerships:
- SBI Remit: Facilitates international transfers in Asia .
- Tranglo: Implements ODL solutions in Southeast Asia .
- Banco Rendimento: Provides remittance services .
- Bitso: Manages ODL operations in Latin America .
"The necessary systems, structures, and regulatory approvals are already in place [for financial institutions to utilize XRP]." – SMQKE, XRP Researcher
Upcoming Projects
Both platforms are actively enhancing their capabilities. Ripple processed over $70 billion in payments across 90+ markets in 2024 .
Recent Highlights and Future Plans:
- Ripple: Launching RLUSD stablecoin for use on the XRP Ledger and Ethereum .
- Stellar: Facilitating near-instant USDC settlements through MoneyGram .
- WisdomTree: Developing blockchain-based financial products on Stellar .
| Network | Focus Area | Recent Milestone | Future Goal |
|---|---|---|---|
| XLM | Expanding financial access | MoneyGram integration | CBDC initiatives |
| XRP | Institutional solutions | $70B+ processed in 2024 | Stablecoin advancements |
| Both | Cross-border payments | Improved settlement systems | New payment innovations |
These advancements pave the way for a deeper trading analysis of XLM and XRP.
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Legal Status
Regulation Status
The legal standing of XLM and XRP differs significantly across major markets. XRP’s situation has been heavily influenced by the SEC’s lawsuit against Ripple Labs, filed in December 2020. The SEC accused Ripple of conducting an unregistered securities sale worth $1.3 billion . A court ruling in July 2023 clarified that institutional sales (around $728 million) were considered unregistered securities, but programmatic sales were not. In October 2024, the SEC filed an appeal regarding this decision .
On the other hand, XLM (Stellar) has largely avoided legal complications. For instance, the New York Department of Financial Services has approved Stellar , and the European Union identifies it as a cryptocurrency rather than a security . This regulatory clarity gives XLM a more stable legal profile.
Here’s a quick comparison of their regulatory positions:
| Aspect | XRP | XLM |
|---|---|---|
| US Legal Status | Facing SEC lawsuit; institutional sales classified as unregistered securities | Recognized as a cryptocurrency |
| Regulatory Challenges | Ongoing legal battles with the SEC | No major legal challenges |
| Market Impact | Prone to price swings due to legal uncertainties | Benefits from a more predictable regulatory environment |
Regulatory Outlook
The regulatory future for these tokens is evolving quickly, shaped by their current legal statuses. In the U.S., efforts like the Eliminate Barriers to Innovation Act of 2021, the GENIUS Act, and the establishment of a Crypto Task Force aim to clarify cryptocurrency rules .
"New technology deserves new approaches to regulation" – Denelle Dixon, CEO of the Stellar Development Foundation
Changes in SEC leadership could also impact enforcement strategies. As former SEC Commissioner Paul Atkins pointed out:
"unclear rules stifle innovation in the US"
Several factors will likely influence the regulatory landscape for XRP and XLM moving forward:
- The outcome of the SEC’s appeal in the Ripple case
- Introduction of new stablecoin regulations
- Global efforts to align cryptocurrency regulations
- Trends in institutional adoption
These developments will continue to shape the legal and market environments for both XRP and XLM, building on their current distinctions.
Trading Analysis
Price History
XRP has shown notable price swings, currently trading at $2.19 as of March 2, 2025 – a 10% jump from its recent lows. In contrast, XLM is trading at $0.3057, reflecting steadier price movements .
Here’s a snapshot of key market metrics for both tokens:
| Metric | XLM | XRP |
|---|---|---|
| Current Market Cap | $9.75 billion | $127.68 billion |
| 24h Trading Volume | $330.75 million | $3.29 billion |
| Maximum Supply | 50 billion | 100 billion |
| Volume/Market Cap Ratio | 3.39% | 2.58% |
Market Activity
When it comes to trading volumes, XRP holds a clear lead. Over the past 24 hours, XRP recorded $3.29 billion in trading activity, significantly outpacing XLM’s $330.75 million . This higher liquidity often translates to more dynamic trading and market behavior for XRP.
A standout moment came in February 2025, when XRP saw its trading volume spike to $32.98 billion, marking a 393% surge. This increase was largely driven by Ripple’s token management initiatives . Such activity highlights XRP’s ability to influence market trends on a larger scale.
Future Outlook
Looking ahead, analysts predict notable shifts in the market, heavily influenced by regulatory decisions and institutional interest. For XLM, Changelly forecasts an average price of $0.337 by the end of 2025 , while DigitalCoinPrice estimates a potential climb to $1.61 by 2030 .
Several factors are expected to shape future trends:
- Regulatory Environment: The outcome of legal proceedings, especially those involving XRP, will play a major role.
- Institutional Adoption: Growing partnerships with financial institutions could drive demand.
- Market Competition: The rise of new payment systems like FedNow may impact both tokens .
- Technical Development: Advancements in blockchain infrastructure will be critical.
For XLM, WalletInvestor projects more modest growth, with an average price of $0.317 by the close of 2025 . Meanwhile, XRP’s trajectory remains closely tied to regulatory outcomes and its expanding network of institutional partnerships, leaving room for potentially large price shifts.
XRP vs. XLM: How Ripple and Stellar Are Revolutionizing Finance
Final Comparison
Here’s a breakdown of the main distinctions between XRP and XLM based on the earlier technical, legal, and market analyses.
Main Differences
XRP and XLM play different roles within the crypto ecosystem. Here’s how they compare:
| Feature | XRP | XLM |
|---|---|---|
| Primary Focus | Institutional money transfers and banking networks | Individual transactions and financial accessibility |
| Network Type | Permissioned network managed by Ripple | Decentralized network maintained by the community |
| Consensus Method | Ripple Protocol Consensus Algorithm (RPCA) | Stellar Consensus Protocol (SCP) |
| Practical Speed | 38 TPS (current performance) | 136 TPS (current performance) |
| Transaction Fee | 0.00001 to 0.0005 XRP | Fixed at 0.00001 XLM |
| Market Position | ~$80.5 billion | ~$14.2 billion |
These differences highlight their suitability for different use cases. While Ripple claims its network can handle up to 50,000 TPS in ideal conditions, its current performance is 38 TPS, which is slower than Stellar’s practical speed of 136 TPS .
Selection Guide
Choose XRP if you:
- Work within traditional banking systems or invest in them
- Require enterprise-level payment solutions
- Value partnerships with major institutions
- Favor integration with the banking sector
Jacky Lee, Group CEO of Tranglo, underscores XRP’s enterprise appeal:
"By partnering closely with Ripple and introducing Ripple Payments to new markets, we aim to further Tranglo’s ambition to provide accessible and equitable financial services to the masses. Together we’ve eliminated pre-funding requirements for partners in more than 20 countries" .
Choose XLM if you:
- Focus on peer-to-peer transactions
- Support financial accessibility initiatives
- Need tools for creating custom assets
- Prefer a decentralized network structure
The Stellar network’s design emphasizes accessibility with its fixed low fees and higher transaction throughput. While banks using RippleNet can cut operational costs by up to 60% , Stellar’s consistent fee structure makes it a strong choice for individuals and small businesses. Your decision boils down to whether you value institutional integration or a focus on individual accessibility – key factors explored throughout this comparison.