Stellar vs Ethereum

Table of Contents

1. Metrics
2. Detailed Comparison
   • Core Purpose and Design Philosophy
   • Technical Performance
   • Economic Model
   • Consensus and Security
   • Smart Contract Capabilities
   • Network Architecture
   • Supply Economics
   • Development and Community
   • Use Case Suitability
   • Future Outlook
3. FAQs
   • Is Stellar faster than Ethereum?
   • Is Stellar cheaper than Ethereum?

Metrics

Detailed Comparison

Core Purpose and Design Philosophy

Stellar and Ethereum serve distinctly different primary purposes in the blockchain ecosystem. Stellar focuses on cross-border payments and asset transfers, positioning itself as a bridge between different currencies. Ethereum, on the other hand, operates as a general-purpose blockchain platform designed to support decentralized applications (dApps) and smart contracts.

Technical Performance

The technical capabilities of both chains show significant differences:

• Transaction Speed (TPS)
  • Stellar: 200 TPS
  • Ethereum: 27 TPS

Stellar's higher transaction throughput makes it more suitable for payment processing and financial transactions. This 7.4x advantage in speed allows Stellar to handle larger transaction volumes, making it more scalable for payment-focused applications.

• Block Time
  • Stellar: 5 seconds
  • Ethereum: 12 seconds

The faster block time on Stellar means quicker transaction finality, which is crucial for payment systems. Ethereum's longer block time, while still relatively quick, reflects its focus on supporting more complex computational tasks rather than pure transaction processing.

Economic Model

• Transaction Fees
  • Stellar: 0.0000000085 XLM
  • Ethereum: $17.48 (average)

This represents one of the most striking differences between the two networks. Stellar's near-zero transaction fees make it highly accessible for micropayments and financial inclusion initiatives. Ethereum's higher fees reflect its congested network and the complexity of operations it supports.

• Staking Rewards
  • Stellar: 1%
  • Ethereum: 3.31%

Ethereum offers more attractive staking rewards, encouraging long-term network participation. This higher yield reflects the network's focus on incentivizing security through stake-based validation.

Consensus and Security

Both networks utilize Proof of Stake (PoS) consensus, but with different implementations:

• Stellar uses the Stellar Consensus Protocol (SCP), a unique implementation focused on fast finality and energy efficiency
• Ethereum employs a more traditional PoS system following "The Merge"

Smart Contract Capabilities

While both chains support smart contracts, their approaches differ significantly:

• Ethereum is the pioneer of smart contract platforms, offering:
  • Turing-complete programming
  • Extensive developer tools
  • Large ecosystem of existing applications
• Stellar offers:
  • Simplified smart contracts
  • Focus on financial operations
  • Lower complexity but higher security for specific use cases

Network Architecture

• EVM Compatibility
  • Stellar: Non-EVM
  • Ethereum: Native EVM

Ethereum's EVM compatibility gives it a significant advantage in terms of developer adoption and ecosystem growth. This has led to Ethereum becoming the de facto standard for smart contract development, while Stellar's non-EVM architecture reflects its specialized focus on payment processing.

Supply Economics

Both networks feature an unlimited maximum supply, but their tokenomics serve different purposes:

• Stellar (XLM) uses its token primarily as:

  • Bridge currency for cross-border transactions
  • Network fee payment
  • Anti-spam mechanism

• Ethereum (ETH) uses its token for:

  • Gas fees for computation
  • Network security through staking
  • Store of value

Development and Community

Both projects maintain strong development communities, but with different focuses:

• Stellar

  • Active GitHub repository
  • Focus on financial inclusion
  • Strong presence in developing markets
  • Regular Medium updates

• Ethereum

  • Largest developer community in blockchain
  • Extensive documentation
  • Multiple client implementations
  • Regular protocol upgrades

Use Case Suitability

Understanding when to use each chain is crucial:

Stellar is optimal for:

• Cross-border payments
• Currency exchange
• Remittances
• Financial inclusion projects
• Micropayments

Ethereum is better suited for:

• Complex smart contracts
• DeFi applications
• NFT platforms
• DAOs
• General-purpose dApp development

Future Outlook

Both networks continue to evolve, but with different trajectories:

• Stellar focuses on:

  • Expanding payment corridors
  • Increasing institutional adoption
  • Improving cross-border transaction efficiency
  • Partnership with traditional financial institutions

• Ethereum emphasizes:

  • Scaling solutions (Layer 2)
  • Protocol improvements
  • Ecosystem growth
  • Maintaining network decentralization

This comparison demonstrates that while both networks are built on blockchain technology, they serve different purposes and excel in different areas. Stellar's focus on payments and cross-border transactions makes it highly efficient for those specific use cases, while Ethereum's general-purpose platform continues to lead in smart contract and dApp development.

FAQs