10 Best Stellar Exchanges in 2024

Our List of The Top Stellar Exchanges

With several exchanges dealing with digital assets available today, it is indeed a tough task to choose one that fits your requirements while offering efficiency, accuracy, and up to date features. Thus, we present to you our list of best Stellar exchanges that have been curated after examining and analysing them on a wide range of qualitative and quantitative criteria.

What is a Stellar Exchange?

A Stellar exchange is a platform that enables users to trade Stellar tokens for other cryptocurrencies and allows the transaction of fiat money into Lumen and vice versa. It acts as an intermediary between those who want to sell and purchase digital currencies by matching buyers and sellers.

You can either trade digital assets directly or through peer-to-peer networks using a crypto exchange. Different Stellar exchanges offer different sets of options and functions. While some are designed for traders, others are customised to suit the needs of prompt crypto-fiat exchange. These platforms usually charge a commission fee on trades along with a small withdrawal fee. You can understand the types of crypto exchanges and examine their advantages and disadvantages in the coming sections.

How do Stellar Exchanges Work?

Most Stellar exchanges are very user-friendly and only require you to register yourself through a simple sign-up form on the exchange’s website. Here you will be asked to fill in your personal details including your name, email address, and phone number. It is important to understand the crypto laws and regulations in your region to examine the legality of a particular exchange, the kind of tax rules that apply to your earnings and your identity verification requirements.

Most countries have comprehensive Know Your Customer (KYC), and Anti-Money Laundering (AML) requirements from crypto exchanges. This means that you will be required to verify your identity using an official government-issued document or ID to access the services offered by the exchange. While some exchanges bypass these rules and allow you to trade XLM without completing your KYC to protect your identity, we strongly suggest against the same as such platforms carry high risk and might not be fully regulated.

Your account is live as soon as your verification process is complete. However, before you can start buying Stellar Lumens, you will need to add funds into your account using Lumens and other tokens. As soon as this transaction is reflected in your wallet, you can start buying and selling. You can withdraw at any point in time using a method of your choice; contact customer support in case of any troubles with deposits, transactions or withdrawals.

How to get started on a Stellar exchange?

Finding the right cryptocurrency exchange to trade Stellar Lumens is the first step you will need to take. Open an account with the Stellar exchange and fund it. Usually, the exchanges support a wide range of payment options, and they allow you to trade XLM against some fiat currencies and cryptocurrencies.

If you are dealing with centralised exchanges, ensure that the details you provide are accurate since you will have to verify your ID by uploading relevant documents. Some exchanges demand that you upload your proof of ID, proof of residence, bank statement, and more.

However, when dealing with decentralised exchanges, you don’t need to verify your identity. This comes with some negatives as you might be dealing with scammers.

The Stellar exchanges accept numerous payment methods, including debit cards, credit cards, e-wallets, bank transfers, and more. You can withdraw funds at any time by placing a withdrawal request.

XLM is popularly traded against BTC and USD. You can buy or sell XLM via the ‘Buy’ or ‘Sell’ orders’.

Using an Exchange Vs a Broker

While a typical Stellar exchange provides an online platform for buyers and sellers who trade cryptocurrencies with each other based on current market prices, crypto brokers enable buying and selling for customers at prices set by the broker. In essence, this is because through an exchange you will be trading the asset itself while brokers usually help you transact in the derivative products of Stellar.

Experts recommend using Stellar exchanges for traders with the knowledge of the cryptocurrency market and offer better security and compliance. Stellar brokers, on the other hand, are perfect for traders who are looking for a wide range of features. Further, in brokerage platforms, financial instruments are offered through leveraged CFDs to allow traders to boost their capital.

Types of Exchanges

In this section, we examine the different types of exchanges available to better understand their functioning and determine whether they fit user-requirements.

•  Centralised Exchanges

Targeted at inexperienced traders, centralised exchanges enable you to buy and sell Stella Lumen tokens through a trusted third-party platform that monitors the transaction and secures the assets on behalf of the buyer and the seller. Centralised exchanges are highly regulated and run on the firm’s private servers, which means that deals are not tracked on the blockchain.

You are required to pay a small fee to use their services. Further, such exchanges also typically require all users to register and verify their identity. Your withdrawal quota is dependent upon the level of personal details you provide to these exchanges. Despite being widely popular, centralised Stellar exchanges are often considered against the Stellar’s open-source platform’s decentralisation aspirations.

•  Decentralised Exchanges

Decentralised exchanges allow peer-to-peer (P2P) trading using assets, proxy tokens, or an escrow system which eliminates the need for an intermediary. All of the funds in decentralised Stellar exchanges remain stored on the blockchain. Decentralised exchanges are not regulated due to the absence of a central entity and thus enable trading anonymously.

However, decentralised exchanges require some advanced cryptocurrency industry knowledge and lack the liquidity of centralised platforms, occasionally leading to delays in transactions.  Thus, decentralised exchanges are not as popular as centralised exchanges, though most experts believe that decentralised exchanges will eventually give their centralised counterparts a run for their money as they develop their infrastructure.

•  Local Exchanges

Local crypto exchanges are P2P platforms that connect people from the locality to facilitate easy transactions. They abide by the crypto laws and regulations of that region and support local currencies, avoiding the foreign exchange fee. Local exchanges are non-custodial crypto marketplaces where people buy and sell crypto on their terms, using a payment method convenient to both parties. Messages between the buyers and sellers are encrypted and escrow accounts are secured by the blockchain of the respective cryptocurrency.

•   Fiat Vs Pure Exchanges

While fiat exchanges facilitate the transaction of cryptocurrency using fiat currencies, pure crypto exchanges strictly only trade crypto for crypto. Fiat exchanges are perfect for beginners as they support a wide range of fund deposit and withdrawal options that the user can choose from to execute their first few trades. Pure crypto exchanges require you to own some amount of any cryptocurrency which is then used to trade directly from your online wallet.

Key Things to Consider When Choosing The Best Stellar Exchange

Each Stellar exchange is equipped with its own unique set of features that are specifically designed to better your trading experience. These features must be studied and understood to choose an exchange that best meets your needs. However, here is a list of universal key criteria that will help you determine the best Stellar exchange:

Transaction Fee: 

Transaction fees add up quickly especially if you trade regularly in large amounts. Thus, it is important to compare the transaction fee percentage, commissions and withdrawal fees for crypto exchanges to choose the most cost-efficient one. It is also beneficial to check what payment methods are supported by the platform.

Transaction Speed: 

Usually, centralised exchanges transact in milliseconds while decentralised platforms can take up to a minute. The transaction speed will have a major impact on your trading potential, especially while dealing with the volatile crypto market and thus must be a significant criterion in making your choice.

Account Verification:

While regulated platforms require users to verify their identity and other personal details based on local KYC norms, there are Stellar exchanges that also allow you to trade anonymously. Users choose based on their own needs in a trade-off between regulatory compliance and cryptocurrency’s spirit of privacy.

Security:

You must also consider the security features of the platform in terms of how funds are stored and personal data is protected while selecting your Stellar exchange. Insurance options and offers are also another key determinant, to protect your interests in case of a safety breach.

Should I Buy or Trade Cryptocurrency?

Buying or trading cryptocurrencies is entirely the choice of the trader or investor. Market knowledge and objectives usually determine a trader’s decision. Leveraging the cryptocurrency’s price volatility and making money daily makes you a trader while holding XLM for the long-term, and profiting from price increase means you are an investor.

Experts recommend learning about the cryptocurrency markets as you grow your investments. Having adequate knowledge of the markets will allow you to make smart investment decisions. The presence of derivative products like futures, options and CFDs (Contract for Difference) have changed the crypto space. They allow traders to profit from XLM trading without owning the cryptocurrency. The alternative XLM trading products you can access on derivative exchanges include:

• Options: These are contracts between buyers and sellers of XLM where the buyer has the right to buy the crypto asset at a later date and an agreed-upon price.
• Futures: This is another contract where a trader agrees to buy or sell XLM at a strike price at a specified time in the future. Similar to options, futures is a highly risky investment product but has a high reward.
• Contracts for Difference (CFDs): CFDs are financial contracts between buyers and sellers that allow users to profit from XLM without owning the cryptocurrency.

Final Thoughts

It is important to understand the gains and pitfalls of investing through the different types of Stellar exchanges to choose one that best fits your requirements.

Most exchanges follow a simple process of registration, followed by an identity verification post which you are allowed to start trading. The best Stellar exchanges are also packed with advanced features to help experienced traders use their skills. While centralised exchanges offer speed and liquidity, decentralised exchanges are more privacy-friendly and transparent. Local Stellar exchanges are a great option if you are looking for convenience and want to avoid foreign exchange fees.

It is recommended to evaluate a prospective crypto exchange based on various factors including transaction time, transaction fee, registration and verification process, security, and design before making the final call.

For more of the best crypto exchanges check out our dedicated page.