Lumens (XLM), the native token of the Stellar network, serve several key roles that are foundational to the network’s operation and its overarching mission.

• Medium of Exchange: Lumens facilitate multi-currency transactions. Stellar’s decentralized exchange (DEX) uses Lumens as an intermediary for currency trades, which means any currency can be exchanged for another by first converting to XLM.
• Anti-Spam Measure: Transaction fees on the Stellar network are paid in Lumens. This fee is nominal but serves to deter malicious users from flooding the network with excessive transactions. Every transaction incurs a small fee of 100 stroops (0.00001 XLM), which helps maintain the network’s integrity.
• Base Reserve Requirement: To maintain an account on the Stellar network, a small number of Lumens is required as a minimum balance. This base reserve ensures that the ledger is populated only with accounts that are genuinely required and helps prevent ledger spam.
• Participation in the Stellar Consensus Protocol (SCP): Lumens are used in the Stellar Consensus Protocol, which is the mechanism through which nodes on the Stellar network agree on the validity of transactions. Lumens do not directly influence this process, but they help facilitate the user’s engagement with the network.
• Bridging Currencies: Lumens act as a bridge between pairs of currencies that do not have a large direct market. This is crucial for enabling transactions between less commonly traded currency pairs and supports Stellar’s goal of financial inclusion.
• Providing Liquidity: Lumens contribute to liquidity within the Stellar network, which is essential for maintaining a healthy and functional marketplace, especially within the Stellar DEX.
  The utility and significance of Lumens go beyond just being a cryptocurrency; they are an integral part of Stellar’s infrastructure, designed to connect disparate financial systems and facilitate cheap, fast, and reliable cross-border transactions. This aligns with Stellar’s mission to unlock the world’s economic potential by making money more fluid, markets more open, and people more empowered.

Tokenomics of Lumens

The term “tokenomics” encompasses the economics of a cryptocurrency, detailing its management and distribution. For Lumens (XLM), the native asset of Stellar, the tokenomics are designed to support operational efficiency and enhance the network’s utility.

Source: https://tokeninsight.com/zh/coins/stellar/tokenomics

• Initial Distribution: The Stellar network started with a fixed supply of 100 billion XLM. In response to community votes, Stellar burned over 50% of the supply, bringing the total to around 50 billion XLM to align with the network’s goals more closely.
• Current Supply Dynamics: As of the last update, the total supply of XLM stands at about 50 billion, with about 20 billion in circulation among the public and the rest held by the Stellar Development Foundation (SDF) to support the project’s development and expansion.
• Inflation Mechanism (Discontinued): Stellar initially included an inflation mechanism, where new XLM were added to the network at a rate of 1% per year. However, this feature was removed to simplify the network’s economics and better fit its mission of creating an efficient payment system.
  Usage of XLM: XLM serves multiple purposes within the Stellar network:
• Transactional Currency: XLM is used for standard financial transactions across the Stellar network.
• Anti-Spam: It prevents spam transactions by requiring small transaction fees paid in XLM.
• Base Reserves: XLM is held as a minimum balance in Stellar wallets, deterring the creation of frivolous accounts and maintaining the network’s clean state.
• Distribution Mechanisms: The SDF has a mandate to distribute XLM in a manner that promotes widespread adoption and ecosystem growth. This includes direct giveaways, partnership programs, airdrops to broaden XLM holders, and grants for developing projects on the Stellar network.
• Token Use Cases: Beyond its utility as a bridge currency and transactional token within the Stellar network, XLM can be used for micro-payments, remittances, mobile banking, and services that aim to offer financial access to underserved communities.

Trading and Storing Lumens

Trading Lumens (XLM)

Lumens (XLM) are actively traded on a variety of platforms, ranging from major cryptocurrency exchanges to smaller specialized services. When trading XLM, it’s important to consider:

• Exchange Selection: Traders should select exchanges based on liquidity, trading pairs offered, security measures, fee structures, and regulatory compliance. Some exchanges also provide additional services such as staking or lending.
• Trading Pairs: XLM can be traded against various cryptocurrencies as well as fiat currencies, depending on the exchange. Common trading pairs include XLM/USD, XLM/EUR, and XLM/BTC.
• Market Analysis: As with any trading, market analysis tools and techniques, like technical analysis and news updates, can be critical for making informed trading decisions.
  Stellar Lumens (XLM) can be actively traded on various cryptocurrency exchanges, including Gate.io. Specifically, the XLM/USDT trading pair is available on Gate.io, providing traders with the opportunity to exchange XLM with the USDT stablecoin. This platform offers a range of features, including real-time charts, market insights, and different order types like market, limit, and stop-limit orders.

When trading on Gate.io or any other platform, it’s important for traders to consider factors like the platform’s security measures, fee structure, and the liquidity of the trading pair. As with all cryptocurrency trading, there are inherent risks, and it’s advisable to conduct thorough research or consult with a financial advisor before engaging in trades. Gate.io’s interface is designed to cater to both novice and experienced traders, offering tools and resources to assist in making informed trading decisions.

Storing Lumens (XLM)

Secure storage of XLM is crucial to protect against theft and unauthorized access. There are several wallet options for storing Lumens:

• Hardware Wallets: These physical devices store XLM offline, providing a high level of security. They can be more complex to use but are often considered the safest option for storing large amounts.
• Software Wallets: Software wallets are applications for desktop or mobile devices. They offer convenience and ease of use and are suitable for smaller amounts of XLM used for regular transactions.
• Stellar Account Viewers: Stellar’s web-based account viewers are simple interfaces for holding and transacting in XLM. While they are convenient, they should be used with caution and may not be as secure as hardware or software wallets.
• Paper Wallets: A paper wallet is a physical copy of the public and private keys for an XLM account. It’s immune to online hacking attempts but must be kept in a safe physical location and can be lost or damaged.
  Regardless of the storage method chosen, it’s essential to keep the private keys secure and to follow best practices for backups and security. This includes using strong, unique passwords and enabling two-factor authentication (2FA) when available.

When considering how to trade and store Lumens, users should evaluate their individual needs for security, accessibility, and convenience. Regular traders may prioritize ease of access, while long-term holders might prefer the enhanced security of a hardware wallet.