NeuronChain vs Stellar

Dmitri Dervoed
Articles
 — Jun 1, 2019
5min. read

Stellar has been one of the most popular projects which is well established and respected in the industry. Their mantra seems to be simple, “Move Money Across Borders Quickly, Reliably, And For Fractions Of A Penny”. Let us examine how it compares with NeuronChain’s vision of universal financial freedom and inclusive borderless markets.

Blockchain proprietary and open source comparison

Stellar’s proprietary blockchain claims to process 1,000 operations per second and their current processing time is estimated to be between 3-5 seconds per transaction. In addition, all transactions on the Stellar network are public and the network includes as annual inflation rate of 1% the total supply of lumens.

NeuronChain’s 100% open source blockchain on main net currently supports 100,000 tps and has the potential to scale to 1 million tps by the end of 2018. This layer facilities private, low cost, and high speed transactions that are processed within 1-3 seconds.

Consensus Mechanism SCP vs DPoI & TaPoS

Stellar uses the Stellar Consensus Protocol (SCP) which is based upon the Federated Byzantine Agreement (FBA) model. While it is suitable for achieving worldwide consensus, it comes with a number of downsides as when security depends upon a user-configurable parameter, there always remains the possibility that people will set it incorrectly. Furthermore, even when configured correctly SCP is not able to overcome all the security issues that may arise in a federated system. For example, widely trusted nodes may leverage their network position in order to gain beneficial information that would allow for front running or other
unethical activities.

In addition, validators are not financially incentivized to secure the network, as there are no block rewards and thus less motivation for individuals to act as node operators which could lead to possible issues with centralization, and there are currently under 40 validator nodes on the Stellar network.

NeuronChain makes use of a hybrid Delegated Proof of Importance (DPoI) and Transactions as Proof of Stake (TaPoS) consensus mechanism. This is further supported by a delegate system and Committee, and our governance structure allows all network participants to vote for the delegates that create blocks and help to secure the network. This system may also have an indefinite number of additional validators, who also verify blocks and transactions in compliance with the data exchange protocol.

Crucially, our elected delegates are paid for their services each time they produce a block, and their pay rate is set by coin holders via their elected committee member (CM). The reward size is determined by the network parameter (approved by CM) and paid out of the “Reserve pool” which is set by the Genesis block as 250m Neuron Coin initially and filled by the 1 Neuron Coin transaction fee for every transaction made across the NeuronChain network. This allows for a transparent, fair, and efficient system that places decentralized decision making at its core.

Nature of Governance and Control

The Stellar Development Foundation (SDF) is the non-profit organization that administers the development of various aspects of the Stellar network, and when the project launched in 2014 with 100 billion Stellars, (changed to XLM in 2015) the SDF was entrusted to oversee the handling of approximately 95 billion lumens. As a result, there is a concern that the SDF and Stellar team may be able to wield a large amount of influence over the entire network. Currently, approximately 18% of the total supply of lumens are circulating on the open market, meaning the future of the currency is very much dependant on the SDF.

NeuronChain by comparison will make 83.75% of all coins available to the community, and NeuronChain’s founders and advisors will be allocated just 16.25% of the coin distribution. In addition, the network is fairly administered and not controlled by a centralized entity as all coin holders are able to vote for the delegates and Committee members that help to secure and administer key network functions and general network maintenance.

Intrinsic Currency Value

While Stellar is one of the stronger blockchain projects currently in operation, this doesn’t guarantee that the XLM currency will appreciate in value. As we have seen, there are close to 19 billion lumens in circulation with over 80 billion still to enter the market, and once dispersed the remaining lumens will dilute the market and lead to a natural drop in valuation of XLM. In addition, the Stellar network operates with an annual inflation rate of 1% of the total supply of lumens which also leads to a natural decrease in the value of XLM.

NeuronChain’s fiat capabilities open up a whole variety of options and also act as the foundation to our peer to peer (P2P) decentralized NeuronEx exchange. Via our exchange, users can trade both cryptocurrencies and fiat currencies, as well as make earn a passive income as network agents. This provides further incentive for our network participants to become agents  and purchase and hold Neuron coins, and this gives us a marked advantage over Stellar as their network doesn’t contain such a feature.

While we welcome institutions, businesses, and entrepreneurs to enter into collaboration and use our technology to solve their financial needs, we also choose to focus on everyday users and by developing a body of committed users, our agent network of liquidity providers will keep our Neuron Coin in high demand and intrinsically valuable.

Summary

Both Stellar and NeuronChain share a similar ethos and aim to spread the reality of financial freedom across the world and employ non-profit governance models. However, there are concerns regarding the centralized nature of the Stellar network as a large quantity of XLM is suspected to be held by the Stellar team who wield a large amount of influence over the entire network. In addition, the governance methods employed by the Stellar Foundation may lead to an unsure future for XLM holders.

NeuronChain operates as an open source and fully transparent network technology, which makes use of a decentralized method of governance that is comprised of network participants. In addition, our ability to merge the use of both fiat and cryptocurrencies, allows our Neuron currency to appreciate naturally due to its intrinsic value as a central component of our agent network. Rather than acting as a purely speculative purchase, the Neuron currency allows our participants to earn passive income and realise financial gains in real time.

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