Stellar will invest $100M in Soroban smart contract apps in bid to beat Ethereum

Stellar is a blockchain that is trying to beat Ethereum. And so the Stellar Development Foundation will invest $100 million to get developers to make apps for its platform.

The foundation is launching the Soroban Smart Contracts Platform, which gives Stellar a better footing to compete with Ethereum. In the past, it handled just payments in cryptocurrency. But now it has a smart contracts platform that developers — including game makers — can use to create blockchain apps such as non-fungible tokens (NFTs), games and decentralized finance (DeFi) apps.

The $100 million fund to kickstart those develop apps comes as an important time, as funding for blockchain games dried up in the last few quarters.

Soroban is the Stellar Development Foundation’s long-awaited smart contracts platform. With Soroban now live on the network’s mainnet, Stellar enters a new era, enabling developers worldwide to create, deploy, and interact with decentralized applications (dApps) on its blockchain.

The release of Soroban represents the most substantial upgrade to the Stellar network in its decade-long history. Stellar, known primarily for its prowess in crypto payments, expands its capabilities to support decentralized finance (DeFi) and various applications with this major development, the company said.

During Soroban’s two-year testing phase, which concluded in January 2024, it garnered significant attention from developers globally. Over 190 projects spanning diverse sectors such as gaming, lending, insurance, and more participated in testing Soroban’s capabilities. Stellar says that the advantages are speed and scalability.

With $100 million allocated to the Soroban Adoption Fund, the Stellar Development Foundation aims to incentivize and support projects leveraging the smart contract capabilities of the network. This investment underscores SDF’s commitment to fostering innovation and growth within the Stellar ecosystem.

Tomer Weller, VP of product at The Stellar Development Foundation, said in a statement, “SDF aims to deliver the tools and technology necessary to power a next-generation financial system — one that is both decentralized and real-world ready. Soroban opens the doors for decentralized applications to easily plug into the existing global financial market, without compromising speed or scalability. We look forward to seeing a variety of world-changing dApps built on Stellar.”

A better blockchain?

Soroban, engineered to address industry demands and democratize financial services, offers a faster, cost-effective, and secure alternative to existing smart contract platforms. By streamlining transactions and reducing computing power requirements, Soroban minimizes smart contract fees while ensuring accessibility and ease of use for developers.

The launch of Soroban signals Stellar’s commitment to advancing blockchain technology’s real-world applications, promoting financial inclusivity, and driving global economic empowerment. Developers interested in exploring Soroban can find more information at stellar.org/soroban.

Stellar, a decentralized and sustainable network for financial products and services, connects the world’s financial infrastructure, facilitating cross-currency transactions and digital asset issuance. Over six million accounts are active on the Stellar network, which serves as a platform for financial institutions worldwide.

The Stellar Development Foundation, established in 2014, supports the growth and development of the Stellar network. As a non-profit organization, SDF maintains Stellar’s codebase, fosters community engagement, and advocates for equitable access to the global financial system through blockchain technology.

Beating Ethereum

But it won’t be easy to beat Ethereum, the king of decentralized applications for the past decade. Three of the five largest blockchain games are on Ethereum and $57 billion in locked in the network, or about 58% of the decentralized finance market share.

But Ethereum also has notorious scalability issues, both in cost and speed. Stellar has mastered scale — that’s why the UN uses it for crypto disbursements, and MoneyGram uses it for its global cash-to-crypto service.