XRP vs XLM: What Is the Difference?

While XRP and XLM have a lot of similarities, there’s also some key points in which they differ. In this article, we’ll explore the topic of XRP vs XLM and explain the main differences between these two important cryptocurrency projects. Before we begin with the comparison of XLM vs XRP, let’s first learn a little bit about each cryptocurrency. This will help us better understand the key differences between the two.XRP is a cryptocurrency that was created in 2012. It was conceived by David Schwartz, Jed McCaleb, and Arthur Britto, a trio of developers who shared an interest in Bitcoin but aimed to create an alternative digital currency that would offer more efficient payments.The three creators of XRP were soon joined by investor Chris Larsen and created a company that’s known today as Ripple. They allocated 80 billion XRP coins (80% of the supply) to the company as a “gift”. At present, Ripple still holds a significant share of the XRP supply, although the majority of their XRP holdings remain locked within escrow accounts, so they can only access them under certain conditions.  The XRP cryptocurrency uses a unique consensus mechanism called the XRP Ledger Consensus Protocol. This design enables very efficient transaction processing. XRP offers transaction fees of less than $0.001, and users can expect to see their transactions confirmed in less than 5 seconds.Ripple integrates XRP into several of its offerings. One of the most noteworthy products powered by XRP is On-Demand Liquidity, which facilitates efficient cross-border fund transfers with the help of XRP.Stellar is a cryptocurrency project that was founded by Joyce Kim and Jed McCaleb, who also played an instrumental role in creating XRP. The technological foundations of XLM are quite similar to XRP, although the two projects have diverged to an extent in the years after Stellar’s launch in 2014. Similarly to XRP, XLM employs a unique consensus mechanism that isn’t based on either Proof-of-Work or Proof-of-Stake. This allows it to offer extremely efficient transactions, as the minimum transaction fee is only 0.00001 XLM. Realistically, users will be paying about 0.0001 XLM in transaction fees, which is still only about $0.00001239 at current prices.The Stellar protocol features built-in decentralized exchange functionality, which allows users to easily buy and sell different types of digital assets issued on the Stellar network. The Stellar Development Foundation has created a smart contracts platform called Soroban that brings advanced smart contracts functionality to the Stellar blockchain.XLM initially launched with a supply of 100 billion coins and an annual supply inflation set at 1%. In 2019, more than half of the XLM supply was burned, which effectively reduced the maximum XLM supply to 50 billion coins. At the same time, the inflation mechanism baked into the Stellar protocol was removed.Now, we’re ready to explore the main differences between XRP and XLM. Let’s begin with a comparison chart highlighting the key facts about each coin.Data as of April 22, 2025.An important difference between the XRP and Stellar projects concerns the organizations that play a crucial role in each project’s development. The most important player in the XRP ecosystem is Ripple, a United States-based fintech company. Meanwhile, the development of Stellar is led by the Stellar Development Foundation, which is a non-profit organization. In both cases, however, the organizations hold a very large part of the total coin supply. According to Ripple’s Q4 2024 XRP Markets Report, Ripple held 4.48 billion XRP, and had 38 billion XRP in escrow accounts as of December 31, 2024. Combined, these holdings account for roughly 42.5% of the total XRP supply.The Stellar Development Foundation holds about 21.1 billion XLM coins, which corresponds to roughly 42.2% of the total XLM supply.If you’re worried about cryptocurrencies where a large percentage of supply is concentrated in the hands of a single entity, you should probably stay away from both XRP and Stellar.Both the XRP Ledger and the Stellar network have a similar level of decentralization, although XRP has the edge in terms of the number of active validator nodes. At the time of writing, there’s currently 95 active validator nodes on the Stellar network, according to information from Stellarbeat. Meanwhile, data from XRPScan shows that there’s 178 validator nodes active on the XRP mainnet. One caveat to the XRP node count is that the default UNL (unique node list) only has 35 nodes on it. Most XRP network participants use the default UNL, although users have the option to customize the list of nodes they trust.Both XRP and Stellar have very low transaction fees. In fact, they are both among the cheapest cryptos to transfer on the market.The transaction fee mechanism of both networks is primarily designed as a measure against spam attacks, and not as an incentive for validators to secure the network. Essentially, the incentive for people to act as validators on either XRP or Stellar is simply having an interest in protecting the stable operation of the respective network. For example, a business that relies on the XRP Ledger has an incentive to contribute to enhancing the network’s security.Another difference between Stellar and XRP is the amount of coins users need to hold in reserve for each address. An XRP account must hold a minimum reserve of 1 XRP, which translates to about $2.1 at current prices. Stellar has a minimum reserve requirement of 1 XLM, which is about $0.24. Although the requirements are quite low on both networks, Stellar is more accessible. When it comes to regulations, Stellar has an edge over XRP as it hasn’t seen as much controversy. XRP is at the center of a lawsuit between Ripple and United States securities regulator SEC (Securities and Exchange commission).The SEC is alleging that Ripple’s sales of the XRP cryptocurrency constitute an unregistered securities offering, while Ripple is arguing that XRP is not a security. While there have been some positive developments for Ripple in this legal battle recently, the lawsuit is still not over and it could still end poorly for both Ripple and XRP.If you are concerned about the potential negative impacts of regulation on crypto, Stellar is likely a better choice than XRP at the moment.Hopefully, our overview of Stellar vs. Ripple helped you understand the main differences between these two popular cryptocurrency projects. As we can see, the two cryptocurrencies perform very similar functions, but the XRP ecosystem is headed by the for-profit company Ripple, while the XLM ecosystem is headed by the non-profit Stellar Development Foundation. XRP has managed to gain a much larger market capitalization than XLM, but that could mean that XLM has much more room to grow. Still, it’s difficult to deny that XRP has the upper hand over XLM at the moment due to the sheer size difference between the two coins.If you want to learn more about XRP, make sure to check out our article exploring if XRP is a good investment. XRP and XLM are very similar cryptocurrencies. While XRP is much bigger than XLM in terms of market capitalization, it wouldn’t be fair to say that it is better. The two cryptocurrencies are very close in terms of technology, and both offer extremely fast and cost-effective transactions.