XLM vs. XRP (Stellar vs. Ripple): The 2020 Full Comparison

XLM vs. XRP (Stellar vs. Ripple): The 2020 Full Comparison

XLM vs. XRP (Stellar vs. Ripple): The 2020 Full Comparison

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Brief sidenote: the names of the actual blockchain networks are Stellar and Ripple, while the cryptocurrencies are called Stellar Lumens (XLM) and XRP (XRP) respectively. However, the crypto community commonly uses Stellar and Ripple to also refer to the cryptocurrencies of both networks.

Stellar and Ripple are two of the most popular cryptocurrencies. However, users often compare the two since they have a similar mission of disrupting cross-border financial payments. With that in mind, here’s the full, up to date comparison of Stellar vs. Ripple so you can get a better idea of their similarities, differences, and which crypto might be better.

History of Stellar and Ripple

Before we dive in, it’s a good idea to know the history of XLM and XRP to understand why they’re similar and how their backgrounds have played a role in their development.

One of the early key figures in the crypto movement, Jed McCaleb, who founded the infamous centralized exchange, Mt. Gox, the dominant Bitcoin exchange in the world at the time, which was handling more than 70% of all BTC transactions until its loss of ~$450 million of customer assets, also created Ripple and Stellar.

Before you get worried that Stellar and Ripple were also created poorly, McCaleb merely founded Gox, and its mismanagement and loss of customer funds is usually blamed on the person he later sold Gox to, Mark Karpeles.

The Mt. Gox hack was a catastrophic event in crypto history. At its peak, Mt. Gox handled more transactions than all of today’s top centralized exchanges combined. If a Mt. Gox level hack were to happen today, it would be equivalent to taking out pretty much all of the top centralized exchanges. Mt. Gox was yet another cautionary tale of what happens when you don’t keep your crypto in a wallet you control, as many, including yours truly, lost what would today be very significant sums of money. Image credit: Mt. Gox

After parting with Mt. Gox, McCaleb began work on a crypto network that wouldn’t be dependent on the energy-intensive mining process of Bitcoin. This network became Ripple. However, disagreement between McCaleb and the rest of the Ripple team led to McCaleb departing. In 2014, along with Co-Founder Joyce Kim, McCaleb created Stellar instead.

So not only are Ripple and Stellar’s mission similar, but their creator is, too!

Stellar vs. Ripple: Target Audience

One of the key differences of Stellar Lumens vs. Ripple is the type of user each project is targeting. Stellar wants to work with unbanked individuals around the world while Ripple is focusing on building close partnerships with banks to help them move money globally.

According to the World Bank, about 1.7 billion adults do not have a bank account. When you consider that the world has about 7.8 billion people, that’s about 1 in 5 people who do not have access to things like savings accounts, loans, and credit.

While the outdated financial system might be trying to bring in these individuals into the banking system, Stellar wants to skip all of that and grant unbanked individuals financial services, but with the benefits of blockchain.

For example, unbanked individuals could join Stellar and use either Stellar or Stellar-based versions of government currencies like the US dollar or Euro.

stellar vs ripple stellar account multiple currencies
Even if users live in countries with unstable currencies, they can use Stellar to hold Stellar versions of more stable currencies like the US dollar, on top of crypto assets like Stellar or Stellar-based BTC. This allows unbanked individuals to not only have a secure place to store their wealth but preserve it, too. Image credit: Stellar

Other benefits of Stellar for unbanked individuals include the ability to send money quickly and cheaply, even across borders. This is key for unbanked individuals, who might be workers abroad sending money back home but are limited to expensive money transfer services like Western Union.

Stellar also allows users to convert their assets on the network easily, which is something that would usually be difficult and expensive, as anyone who’s exchanged for foreign currencies can attest to.

On the other hand, while Ripple also enables things like cheap and fast cross-border payments, Ripple’s target customer is not so much unbanked individuals but the banks themselves.

When it comes to international payments, banks have to deal with high fees and long wait times, since payments often travel between multiple parties, each of whom charge a fee, before getting to their final destination.

HUNDREDS of TRILLIONS of dollars move across borders every year, so if Ripple can cut down or even eliminate the fees and wait times associated with those transactions, it would be a big win for both banks and Ripple.

Many well known banks and institutions use Ripple, including the likes of American Express, MoneyGram, PNC, and Santander. Image credit: Ripple

Stellar vs. Ripple: Functionality

When it comes to the functionality of Ripple vs. Stellar, we’d have to say that Stellar has the upper hand.

While Ripple focuses on its main use case of low-cost and quick international payments, Stellar does that and more. As mentioned above in the “Stellar vs. Ripple: Target Audience” section, Stellar allows users to convert their assets for other ones on the Stellar network. In other words, Stellar has a built-in exchange. Meanwhile, for Ripple, you’d have to take your XRP elsewhere to exchange it for another asset.

Moreover, Stellar also supports smart contracts, meaning that XLM is not just money, but programmable money. For example, using XLM smart contracts, you can create your own initial coin offering, or ICO, where you sell a Stellar-based token to fund development of a blockchain project.

This kind of functionality adds a lot more value to the network, as seen with Ethereum, the most popular ICO platform, which saw its price explode in 2017 thanks to that year’s ICO craze.

From ~the beginning of 2017 to early 2018, Ethereum’s price went from about $8 to about $1,400, or a 17,400% increase. This was largely due to Ethereum popularizing the idea of “Blockchain 2.0”, or expanding blockchain’s role from just payments to all kinds of decentralized applications. Image credit: Coinmarketcap

Stellar vs. Ripple: Decentralization

Another important factor to consider when comparing XLM and XRP is their levels of decentralization.

Ripple only allows select individuals or organizations - usually banks or other large corporations - to participate in consensus, or coming to agreement on and validating transactions. Stellar, on the other hand, allows anyone to participate in the consensus process.

Moreover, Ripple suffered a big stain on its image when it froze Jed McCaleb’s XRP holdings after he left the Ripple organization. While this was later resolved, it went against one of the main tenets of crypto, which is censorship resistance, or the ability for anyone to participate in financial transactions without fear of censorship.

Therefore, Stellar wins on this one, as it leans closer towards the original decentralized ethos of crypto.

Stellar vs. Ripple: Team

When it comes to the teams of the two cryptos, both have very strong teams. For instance, Stellar’s Jed McCaleb is more or less a “founding father” of the industry. However, Ripple has the edge here, as their team has a lot of people with strong experience in the corporate world. Not only that but their team has hundreds of employees with offices around the world.

Brad Garlinghouse, CEO of Ripple, brings a lot of experience to the Ripple team, having worked at AOL and Yahoo as a President and Senior Vice President respectively. Image credit: Ripple

Stellar vs. Ripple: Token Distribution

Token distribution, while technically a facet of decentralization, deserves its own section as both cryptos have rather centralized token distribution.

Ripple is the worse offender here, as the company behind Ripple controls about 60% of all outstanding XRP.

Stellar, too, had its own token distribution problems, as it previously controlled about 85% of all circulating XLM (though much of this was set aside for giveaways to grow Stellar’s userbase). Nevertheless, this was significantly improved in November 2019, when Stellar burned, or made useless by sending to an inaccessible Stellar account, over 55 billion XLM (around $4.7 billion at the time).

This still gives Stellar control of about 30 billion of the 100 billion Stellar originally created, or 30% of all circulating Stellar. While that is all meant for Stellar’s operations, giveaway programs, and partnership programs, it’s still quite a lot in one entity’s hands. Nevertheless, the situation is much better off than Ripple’s, as Ripple controls the majority of all outstanding XRP.

Stellar vs. Ripple: Inflation

The last point we want to touch on is inflation.

Ripple’s total supply is fixed, whereas Stellar has 1% inflation per year. On top of that, Ripple burns all transaction fees. Therefore, Ripple is deflationary (supply decreases over time), while Stellar is inflationary (supply increases over time).

If we’re to believe the economic theory of supply and demand, that means that as Ripple’s supply decreases and XRP becomes more scarce, its price should increase (assuming demand for XRP increases or stays the same). With Stellar, there is an opposite effect, since increasing supply puts downward pressure on price.

Therefore, from a price perspective, Ripple wins on inflation (or its lack thereof).


In sum, Stellar and Ripple are two very similar assets. However, there are clear things that both Stellar and Ripple are better at than the other.

When it comes to functionality, decentralization, and token distribution, Stellar wins. Meanwhile, Ripple beats Stellar on team and inflation policy.

Regardless, it’s likely that the two assets will play important roles for the foreseeable future rather than one overtake the other in all aspects. Ripple will continue trying to appeal to banks, and Stellar will try to give unbanked individuals an alternative to centralized and inefficient banks.

Want to buy some Stellar Lumens and/or Ripple?

Exodus allows you to purchase both XLM and XRP from your own Exodus wallet using other cryptos - without having to create an account!

If you don't have crypto, you can always use services like Cash App or Coinbase to buy Bitcoin, then exchange BTC for XLM or XRP using Exodus.

On top of letting you exchange cryptos for XLM or XRP easily (and vice versa), Exodus also:

  • Supports over 100 crypto assets, including both XLM and XRP
  • Focuses on premium design and ease of use, so you can manage your crypto easily
  • Is the only wallet to support desktop, mobile, and hardware wallet (Trezor) integration - XRP only has Trezor Model T support for now
  • Gives you the ability to sync your wallet between desktop and mobile
  • Has 24/7, fast human support if you ever need help
From left to right: Exodus on Trezor, mobile, and desktop. Download Exodus here

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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