The price of XLM, the cryptocurrency used on the Stellar blockchain, has recently started surging, despite a recent two-hour failure that affected its blockchain, in which users weren’t able to transact.
According to a Reddit thread, the outage occurred as Stellar Development Foundation (SDF) validators went down. Every Stellar validator can choose which validators to trust, and the majority have gone with SDF, leading to a certain level of centralization.
Once the SDF validators went down, the whole network wasn’t able to reach consensus and, as a security measure, stopped processing transactions. The reason the nodes to go down isn’t yet clear. Given the network’s temporary failure, some in the Stellar community have called for a debate on its centralization, hoping to avoid having a single point of failure in the future.
Breaking: yesterday the Stellar network went down for about 2 hours… only those who run validators noticed it.
no new transactions were added for ~2 hours.
— Tim Swanson (@ofnumbers) May 16, 2019
Despite the network’s failure, the cryptocurrency is currently up by nearly 25% in the last 24-hour period, suggesting users are still bullish on it. Related to its price performance could be Poloniex, a major cryptocurrency exchange, announcing support for Stellar inflation rewards.
On the Stellar network, new XLM is issued at a rate of 1% a year, and token holders who have over 0.05% of network votes are rewarded with those tokens. One XLM is the equivalent of one vote. Poloniex’s move could’ve seen various users buy tokens to take advantage of the rewards.
At press time, one XLM token is trading at about $0.15, and the cryptocurrency has a market cap of $2.87 billion. In the last two weeks, XLM tokens have seen their price rise by 48.1% as they’ve also been accompanying the wider crypto market rally.
Interestingly, XLM’s network went down at about the same time the Bitcoin Cash network faced a glitch, that saw someone take advantage of a bug to get miners to mine empty blocks, stopping transactions from being processed. The bug was fixed by BCH’s developers soon after being exploited.