Cardano (ADA) and Stellar Lumens (XLM) are two projects that are highly popular choices for investors who have gone past Bitcoin, Ethereum and Ripple. They are both solid projects to consider because they are working on specific use cases and have their own approaches to solving those problems.
Some people seem to think that ADA and XLM are competing with each other, but that’s just not true. They’re both focusing on different things, as we’ll see below.
The Cardano project is a very scientifically-oriented project and the development roadmap has some incredibly interesting milestones, not the least of which is the Ouroboros protocol. The protocol is a scientifically backed Proof-of-Stake protocol that has a lot of potential.
Like Bitcoin and Litecoin, it is intended for day to day transactions, but it has the added advantage of focusing heavily on financial applications being built on its platform. ADA is something like a marriage of Bitcoin and Ethereum. The team is led by scientists and engineers, which really lends some credibility to the project.
However, some investors might be put off by the fact that the development roadmap of Cardano is long. It will be about 5 years before Cardano comes into full maturity. At the same time, it is competing with the likes of Bitcoin and Ethereum, which is undergoing major changes themselves. Whether or not it can outperform these projects and garner adoption remains to be seen.
Stellar Lumens (XLM)
The Stellar Lumens project is working on cross-border transfers using its token XLM, which is similar to what Ripple and XRP are doing.
The competition here is hot. Stellar is backed by payments company Stripe and has already made some grounds in reaching existing enterprises. It is working with IBM to help banks release their own stablecoins which will then be used to facilitate the banks’ various services. This is similar to what Ripple is doing, except stablecoins are not involved. Stellar is focused on remittances, micropayments and removing overhead costs for financial institutions.
Stellar also has a history that is linked to Ripple. Ripple CTO and co-founder Jed McCaleb eventually left Ripple to form Stellar and that explains the common goals.
Some of Stellar’s greatest pros include transaction times of 3 - 5 seconds, a fixed 1% annual inflation, multisignatures and the consensus protocol itself, which permits decentralization while still being secure through asymptotic security.
But then again, like ADA, Stellar has its work cut out for it. As solid as the project is, it’s competing against Ripple, which already has over 200 financial institutions on its RippleNet and has a strong business strategy. I’m not sure if XLM can compete with Ripple in the cross-border space, but perhaps with facilitating banks’ release of stablecoins and other financial services like micrpayments.