The crypto world is full of intriguing patterns — and one of the most fascinating is how often XLM (Stellar Lumens) mirrors the price movements of XRP (Ripple). 🚀 But why does this happen? Are the two projects connected? And what does the future hold for Stellar?
In this blog, we’ll dive deep into the roots of this correlation, uncover the history of XLM, compare it to XRP, explore its real-world use cases, discuss its pros and cons, and look at what’s coming in the Stellar roadmap for 2025 and beyond.
🧬 Shared Origins: The XLM & XRP Connection
To understand why XLM tracks XRP, we need to go back to the beginning.
Jed McCaleb, the founder of Stellar, was also a co-founder of Ripple. After helping launch Ripple Labs and the XRP Ledger, McCaleb left the company in 2013 due to differences in vision. In 2014, he co-founded Stellar Development Foundation (SDF) with Joyce Kim, aiming for a more open, inclusive global financial system.
While Ripple focused on banking and financial institutions, Stellar positioned itself as a decentralized platform for remittances, payments, and underbanked populations.
🧠 Fun Fact: Jed McCaleb was also the creator of Mt. Gox, one of the first major Bitcoin exchanges.
📚 Source: Jed McCaleb – Stellar.org
🔗 XLM vs. XRP: Key Differences
| Feature | XRP (Ripple) | XLM (Stellar) |
|---|---|---|
| Founded | 2012 | 2014 |
| Founder | Chris Larsen, Jed McCaleb | Jed McCaleb, Joyce Kim |
| Target Audience | Banks, Financial Institutions | Individuals, Unbanked Populations |
| Governance | Ripple Labs (private) | Stellar Development Foundation (non-profit) |
| Consensus Mechanism | Ripple Protocol Consensus Algorithm | Stellar Consensus Protocol (SCP) |
| Supply Cap | 100 Billion (pre-mined) | 50 Billion (burned from 100B) |
Despite the differences, the projects are often seen as cousins. Traders and investors tend to group them together, which leads to price correlation.
📈 Why XLM Price Follows XRP
Here are 6 key reasons why XLM frequently mimics XRP’s price movements:
- Shared History – Same founder, similar mission.
- Similar Use Cases – Both facilitate cross-border payments.
- Investor Sentiment – Viewed as alternatives or complements.
- Exchange Pairing – Often paired together (e.g., XRP/XLM).
- Regulatory Spillover – XRP news affects XLM sentiment.
- Speculative Trading – Retail traders move between the two.
📊 In multiple bull runs (2017, 2021), when XRP surged, XLM followed shortly after — a behavior that’s now baked into crypto market psychology.
🌐 Stellar’s Real-World Utilization
Stellar isn’t just a “cheap XRP” — it’s a powerful blockchain in its own right, with real-world partnerships and utility.
🌍 Key Use Cases
- Cross-Border Remittances – Fast, low-fee international payments
- Stablecoins – USDC runs natively on Stellar 💵
- Tokenization – Any asset can be tokenized on Stellar
- DeFi & NFTs – Expanding support for decentralized finance
🤝 Notable Partnerships
- MoneyGram – Users can convert cash to crypto and vice versa 🔗
- IBM World Wire – A Stellar-based global payments platform (though paused, it set precedent)
- Circle (USDC) – Native Stellar integration
✅ Pros of Stellar Lumens (XLM)
✔️ Fast Transactions – Settles in 3–5 seconds
✔️ Low Fees – A fraction of a cent per transaction
✔️ Eco-Friendly – No mining, low energy usage
✔️ Strong Team & Community – Backed by an active nonprofit
✔️ Developer-Friendly – Simple APIs and SDKs
❌ Cons of Stellar Lumens (XLM)
❗ Lower Brand Recognition – Compared to Ethereum or Bitcoin
❗ Heavy Token Burns – Raised centralization concerns
❗ Lagging Behind in DeFi – Not yet a top DeFi platform
❗ XRP Shadow – Struggles to escape XRP’s shadow in investor sentiment
❗ Stiff Competition – Competes with Ripple, Ethereum, Solana, etc.
🛣️ Roadmap & Future of Stellar (2025 and Beyond)
The Stellar Development Foundation (SDF) publishes its priorities publicly, and 2025 looks promising.
🔮 2025 Roadmap Highlights
- Smart Contract Deployment (Soroban)
Stellar is integrating Soroban, a Rust-based smart contract platform. This will bring full programmability to Stellar and attract DeFi/NFT projects.
👉 More on Soroban - Enhanced User Experience
Stellar is working on easier onramps, wallet UX, and fiat integrations to boost adoption. - Regulatory Compliance
Partnering with regulated entities like MoneyGram, aiming for broader institutional use. - Scaling & Security
Continuous improvements to keep transactions fast and secure.
👤 Founder & Leadership
Jed McCaleb remains an influential figure, although no longer directly involved in Stellar’s day-to-day operations. The SDF is led by experienced blockchain and financial professionals committed to building an open financial ecosystem.
🔎 Final Thoughts: XLM’s Place in Crypto
While XLM and XRP are linked by history, their futures may diverge as Stellar moves toward a more open, developer-friendly ecosystem with Soroban smart contracts. Investors should watch for these developments, alongside broader market trends and regulatory news.
Whether you’re a crypto newbie or a seasoned trader, understanding the XLM-XRP relationship provides a fascinating lens into crypto evolution and market psychology.
🚀 Ready to explore Stellar? Check out Stellar.org for the latest updates.
