- Stellar and Ripple are leading players in the payment industry.
- Ripple is a better buy in 2023 because of the ongoing litigation.
Ripple and Stellar are some of the biggest payment solutions in the blockchain industry. Indeed, Stellar was started by a co-founder of Ripple, to disrupt the payment sector. In 2022, XRP and XLM prices plunged by 57% and 73%, respectively. In this Ripple vs Stellar piece, I will look at the better buy between the two coins.
Ripple vs Stellar: Where they differ
Ripple and Stellar were created to change the payments industry and lower the cost of doing business and boost speeds. The two networks use different approaches to achieve this. Ripple uses On-Demand Liquidity (ODL).
ODL helps customers move money internationally without the need for corresponding banking relationships and pre-funding of accounts abroad. It uses XRP into the middle of cross-border transactions, thus removing intermediaries. The token works as the intermediary between two fiat currencies.
Stellar, on the other hand, uses the Stellar Consensus Protocol that tackles the scalability and speed problem that BTC has. It makes it possible for people to create digital representations of cash. For example, assume that you want to send $1,000 to a person in the UK.
In this case, you will tell your bank, which will contact the other bank. Your USD will be transformed into XLM and moved to Stellar’s network. Stellar then looks at the best exchange rate and converts the funds to sterling.
Stellar had a great year even as XLM price plunged. Total accounts rose by 17% to 7.3 million while total operations processed rose to 3.6 billion. Total payments processed rose to more than 345 million. Another major milestone was the launch of Soroban, a new smart contract standard that makes it possible for developers to build apps. It has set aside a $100 million adoption fund.
XLM vs XRP for 2023
XRP and XLM faces numerous challenges in 2023. The biggest challenge will be Ripple, which is expected to hear the verdict of the ongoing litigation in the US. It is still too early to determine whether Ripple will succeed in this case. However, in my view, I believe that the SEC has a higher bar to prove that XRP is a security.
Therefore, from a risk-to-reward perspective, I believe that XRP is a better buy than XLM in 2023. XLM faces significant challenges ahead. For example, it experiences thin volumes, which explains why Coinbase Wallet delisted it. Also, while Soroban was a big milestone, it is too early to determine whether it will be successful. Besides, the smart contract industry is one of the most competitive.
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