How does Stellar work?
Stellar is an open-source, distributed payments infrastructure.
It is a decentralized network that connects banks, payment systems, and people to facilitate low-cost, cross-border transactions. The Stellar network is powered by its native digital currency, Lumens (XLM). The Stellar network consists of a distributed ledger that records all transactions on the network.
This ledger is maintained by a consensus protocol that allows for fast and secure transaction processing. Transactions are validated by a network of computers called validators. These validators come to consensus on the state of the ledger using the Stellar Consensus Protocol (SCP).
The Stellar protocol also includes a built-in decentralized exchange (DEX) that allows users to trade assets without having to go through a centralized exchange. This DEX allows users to quickly and securely trade any asset supported by the Stellar network. In addition to its native currency, Lumens (XLM), the Stellar network also supports other digital assets such as tokens and stablecoins.
These assets can be used for payments or trading on the DEX. The Stellar protocol also supports smart contracts which allow developers to create custom applications on top of the platform. Overall, Stellar provides an efficient and secure way for people and institutions to send money across borders with minimal fees and fast transaction times.
It also provides developers with tools to create custom applications on top of its platform, allowing them to build innovative financial products and services.
