Cardano (ADA) vs. Stellar (XLM) | Which Currency Is a Better Investment?

Cardano (ADA) and Stellar (XLM) are among the top 30 cryptocurrencies by market cap. The respective platforms, Cardano and Stellar, are ambitious, constantly evolving projects. This article will give you a good idea of what these platforms and coins are so that you can see which of them can be a good investment for you.

1. What Is Cardano?
2. What Is Stellar?
3. Cardano vs. Stellar (table)
4. Cardano vs. Stellar (details)

What Is Cardano?

Cardano (ADA) is a native token of the Cardano platform. The platform functionality resembles Ethereum: Cardano is used for running smart contracts, building and hosting dApps, storing and managing data, etc.

Cardano was created by one of the former Ethereum team members Charles Hoskinson. His intention was to create a platform with functionality similar to Ethereum but better in terms of scalability. Cardano is cheaper and faster than Ethereum. The latter plans to transfer from the PoW consensus protocol to PoS. On Cardano, the consensus is achieved through PoS from the very beginning.

The project started in 2017 and quickly gained mass attention, becoming one of the most promising crypto platforms. As of August 2022, Cardano occupies the 7th position by market cap. Cardano had a number of collaborations with big businesses, financial organizations, etc. The token is available on many big exchanges.

What Is Stellar?

Stellar (XLM) is a native coin of the eponymous P2P network. The platform aims to allow users to exchange fiat currencies, cryptocurrencies, CBDCs, and other types of assets with each other. More than that, Stellar has an inbuilt decentralized exchange and a crypto on-ramp. Another purpose of Stellar is a connection between financial institutions.

The project was conceived in 2014 by ex-Ripple employee Jed McCaleb and the lawyer Joyce Kim. Their goal was to bring crypto to the mainstream by making transactions and exchange operations effortless. The target audience of Stellar is the developing countries with substantial unbanked populations and financial institutions that need convenient crypto on-ramps.

As of August 2022, the Stellar coin is available for trading on many popular exchanges. The price fluctuates around the 12 cents mark. The market cap exceeds $3 billion, making Stellar the 30th cryptocurrency with the most significant market cap.

Cardano vs. Stellar (table)

Cardano vs. Stellar (details)

The price and the market cap 

Cardano has a higher price and a bigger market cap than Stellar. More than that, Cardano had the most significant spikes this decade, while Stellar had its highest price in early 2018. Both projects are influential, but Cardano's market performance seems to have more energy.

Popular markets

We can't say that Cardano or Stellar has an advantage by this parameter. Both coins are well-presented on multiple markets, including the most popular exchanges. You won't likely have a problem selling/buying ADA or XLM on any significant exchange.

Platform

Both assets are built on top of custom networks. Cardano had a unique architecture from the very beginning, while Stellar was initially built on top of Ripple. However, now, both networks are fully autonomous.

Consensus mechanism

From the technology side, the Stellar Consensus Protocol (SCP) is one of the most progressive consensus protocols in the blockchain industry. Unfortunately, it's not as well-spread as popular protocols like Proof-of-Stake and Proof-of-Work. SCP is harder to understand for the major public, and it can turn some people away even though SCP is a decent protocol. Cardano is based on PoS, a protocol known to every crypto enthusiast. It has many critics, but at least everyone knows if PoS is good for them.

Products

Cardano products are better for institutions, while Stellar focuses more on end users. Depending on who you are, you can prefer Cardano or Stellar.

Use cases

Stellar is working to help unbanked people make cross-border transactions and interconnect financial institutions. Cardano can be a platform for building any service, including the one that has features resembling Stellar's functions. We think that Cardano is more versatile than Stellar. It gives users and developers essential tools that can be used for millions of purposes. Stellar's appliance is more narrow.