Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with XLM.
No securities regulatory authority has expressed an opinion about XLM, including an opinion that XLM itself is not a security and/or derivative.
Token Description & Project Background
The Stellar Network provides a blockchain-based infrastructure to make money borderless. The open-source payments network enables anyone to issue new assets in the network and exchange has processed in excess of 2 billion operations to date.
The network relies on Stellar Consensus Protocol (SCP) to achieve consensus. It is an implementation of Federated Byzantine Agreement (FBA) pioneered by Ripple.
The Stellar Foundation is a nonprofit that oversees the Stellar Network’s development. However, it is a completely open-source project that enables anyone to contribute to the development or amendment of the core codebase.
XLM is the network’s native token that is required to access and execute network transactions. It can be used to represent any form of currency or value transacted on the blockchain.
Jed McCaleb, David Mazieres, and Joyce Kim founded Stellar in 2013. Jed McCaleb was previously served as Ripple’s CTO until 2013. Mazières teaches Computer Science at Stanford University, whilst Kim was previously CEO of the Asian entertainment site ‘Soompi’.
The XLM token was launched in 2014; the network initially ran on a fork of the popular XRP ledger, but transitioned in 2015 to run on its own native custom-built blockchain.
Risks of XLM
Like an investment in other crypto assets, there are some general risks to investing in XLM. These include: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to thestatement.
In addition to these general risks, an investment in XLM is subject to the following specific risks:
- The Layer-1 space faces intense competition. Any potential success associated with XLM depends on the Stellar Network’s rate of adoption.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with XLM. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.
The XLM community and Stellar Foundation are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of XLM have no recourse to the XLM community, Stellar Foundation, or Uphold if XLM declines in value for any reason.
Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.
Uphold’s Evaluation Process
Prior to listing XLM on the Uphold Platform, Uphold performed due diligence on XLM and determined that XLM is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following:
- The creation, governance, usage, and design of XLM, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of XLM.
- Any marketing materials put forward by the XLM social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with XLM, including any code defects, security breaches and other threats concerning XLM and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
- Legal and regulatory risks associated with XLM, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of XLM.
Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
Uphold users should read thestatement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.
Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following. Please also review the for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and statement.
How to buy Stellar Lumens (XLM)
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