Stellar Lumen

Consensus is reached through the Stellar Consensus Protocol (SCP), which is based on federated Byzantine agreement. This mechanism allows fast finality without mining or staking, but it depends on validators choosing other validators which they trust to reach agreement, called a quorum set. As a result, validator diversity and governance choices play a critical role in security, and concentration of influence among large operators may increase systemic risks.

Stellar does not use block rewards or mining. Instead, validators operate without direct protocol-level rewards. While this design keeps costs low, it may reduce incentives for validator participation compared to staking-based models. The sustainability of validator engagement depends largely on external factors such as institutional involvement and ecosystem adoption.

For the calculation of energy consumptions, the so called 'bottom-up' approach is being used. The nodes are considered to be the central factor for the energy consumption of the network. These assumptions are made on the basis of empirical findings through the use of public information sites, open-source crawlers and crawlers developed in-house. The main determinants for estimating the hardware used within the network are the requirements for operating the client software. The energy consumption of the hardware devices was measured in certified test laboratories. When calculating the energy consumption, we used - if available - the Functionally Fungible Group Digital Token Identifier (FFG DTI) to determine all implementations of the asset of question in scope and we update the mappings regulary, based on data of the Digital Token Identifier Foundation. The information regarding the hardware used and the number of participants in the network is based on assumptions that are verified with best effort using empirical data. In general, participants are assumed to be largely economically rational. As a precautionary principle, we make assumptions on the conservative side when in doubt, i.e. making higher estimates for the adverse impacts.