Ripple vs. Stellar Lumens: Why the Discrepancy?

As of the time of writing the market cap of Ripple sits at $11.5B, while Stellar Lumens sit at $0.5B. This begs the question: why is there such a huge discrepancy? Aren't they both used to operate underlying payment processing solutions? The root of the answer lies in the business models of the respective companies.


The Company

According to its website, "Ripple enables banks to increase efficiency in their existing payment processes and create differentiated products and services for their customers."

It touts the following benefits for its payment processing solutions, which include retail remittance and corporate disbursement use cases:

  • Real-time payments with no settlement risk | Using Ripple’s solution, banks can coordinate funds movement across multiple ledgers to remove all settlement risk and minimize delays in the payment process. Having global reach through many nostro accounts is no longer necessary.
  • Flexible liquidity provisioning | Expand reach to new corridors with Ripple through more efficient liquidity sourcing. Either leverage existing nostro accounts for high-volume corridors that have competitive FX rates or utilize a marketplace of third-party liquidity providers.
  • Lower operational costs | While traditional processing costs - With Ripple’s bidirectional messaging, banks can validate transactions before funds are transferred and confirm delivery of funds, ensuring high Straight-Through Processing rates, low returns and negligible tracking and reconciliation effort.
The Currency

Ripple (XRP) is the digital currency and related infrastructure that can be used to power the Ripple payments processing solution.

Stellar Lumens

The Company (Stellar)

The Stellar network refers to the technology that processes financial transactions. The technology is open source, distributed, and community owned. is the nonprofit organization that contributes to the development of tools and social good initiatives around the Stellar network and financial inclusion. Employees contribute code to the Stellar network, but the technology is independent of the organization.

According to its website, " connects people to low-cost financial services to fight poverty and develop individual potential." Based on its mission, its classified as a non-profit organization.

Stellar covers operational costs in several ways:

  • 5% of the initial lumens are set aside for operational costs.
  • accepts tax-deductible donations from the public.
The Currency (Lumens, or STR/XLM)

According to its website:

Lumens are the native asset of the Stellar network. Native means that lumens are built into the network. Asset is how the network refers to an item of value that is stored on the ledger. One lumen is a unit of digital currency, like a bitcoin. While you can’t hold a lumen in your hand, they are essential to the Stellar network—they contribute to the ability to move money around the world and to conduct transactions between different currencies quickly and securely.


In short, the use cases for XRP surround profit-generating, payment processing solutions for banks, acquirers, and international corporations, while XLM focuses on non-profit distribution of wealth to the masses on an international level. Ripple is about saving costs and increasing efficiency; Stellar is about increasing access. While the two currencies may seem similar to the uninformed trader, it appears there is a logical reason for the discrepancy in market cap. The only question is, should the spread be that wide?


If people don't grasp the fact that different crypto has different intended purposes, they're going to lose a lot of fiat.

Thanks for actually listing the differences between Ripple and Stellar Lumens.

Unsophisticated people have a tendency to lump them together because "they're both for banking".

Thanks for the response. Exactly my reason for listing these specific currencies - easy to lump them together, especially since Stellar was a fork off of the Ripple protocol.

My approach doesn't even consider what protocol it's using.

I don't care if it's a fork off the dining room table, unless it has real world practical use, it's not going to be around long.

As far as I can tell (and I haven't researched it that deeply) Ripple is pushing itself as an alternative to the US Banking oligarchy controlled SWIFT network. There are enough people in the world who want that for it to have some staying power.

Stellar (IIRC), markets itself as a micro loan/payment system aimed at the 2+ billion people who don't have banks on the planet. As the old saying goes, "A billion here, a billion there, pretty soon, you're talking about REAL money."

Quality post with some great info!

A major misconception.
I'm a beginner to crypto, and it's staggering with a number of coins and coin offerings there are. From the beginning, I did what I was told. READ THE WHITE PAPERS!

Understand the product you are investing in.

These coins have infinite uses. It's not just a financial system. It can be soo much more if people began to realize the potential.

Thanks for sharing this, and I see we both look deep into the future of this. It's a game changer!

Thanks for your post, it was explained well the differences between both cryptos!

Keep the good work!

You guys do know the cryptos have no value right? Banks wont have to use ripple to do transactions on ripple network they can use usd or euro ny time already stated that. So the crypto coin itself has no value but the eco system has value. You guys are buying coins that have no worth. Those coins were made so they could get money to start their businesses thats it. If they can't use usd and fiat on stellar and have to use the crypto they will just use ripple where they can just use fiat directly. Visa is already building another system that will compete with ripple. I think they are bad investments cause bankers and businesses want to use the eco system but do it without using crypto currencies. Governments can use factom eco system without buying factom crypto to use the network. So be careful to not go all in on stellar or ripple. Banks and businesses only want to use fiat they do not want to use crypto currencies. So the coins have no value only that eco system does. I think that is the main reason cryptos are going down it has nothing to do with korea, or some holiday. Its the fact people are realizing cryptos themselves has no investment value just the eco system does. They will find ways to by pass using cryptos either by using another network or the company finding a way to by pass the coin itself to get the banks business like ripple is doing.

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