Quick summary: Our recommendation is to use eToro to short Stellar. They have the most popular cryptocurrencies on offer, great support, and have an easy system for shorting cryptocurrencies in general.

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Stellar

While there are a lot of options out there for buying XLM, shorting is a different story. Luckily for us here in Australia, we do have a few crypto brokers and exchanges that allow for CFDs and shorting.

One of those brokers is eToro, which we’ll be using for this guide. Let’s get started!

How to Short Stellar in Australia

A quick recap first on what shorting actually is: The main objective of shorting or short selling is to make a profit (of course). The idea is to sell a stock/cryptocurrency hoping it will drop in value so you can buy it back later for cheaper, thus creating a net profit.

Shorting Stellar can be done in 4 easy steps:

  1. Choose a crypto broker or exchange
  2. Create an account
  3. Fund your account
  4. Short Stellar

1. Choose a cryptocurrency exchange

As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.

You can, of course, use any other crypto broker to follow along, they all work very similarly.

2. Create an account on the cryptocurrency exchange

Let’s start with just signing up with eToro.

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The sign-up process is very quick and easy, as is the verification that needs to be completed afterwards so you can get started.

3. Funding your eToro account

Next is funding your account. You have several options when it comes to depositing AUD into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.

4. Short Stellar

Now for the actual shorting:

  • Starting off at the search bar at the top, find Stellar by entering the name or symbol.
  • Then on the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
  • At the top of the trading interface: Click on sell to short sell the stock.
  • Enter the amount for which you want to sell Stellar and click on “Open Trade”.

Once you’re ready to close the trade, hopefully when the value of Stellar has dropped, go to your Portfolio, find the Stellar trade, and click on the red cross to close the trade.

If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.

Congratulations, now you know how to short Stellar!

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Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.

Affiliate Disclosure: This site is supported by its users. We may receive commissions for purchases made through the links on our site. This does not impact our reviews, guides or comparisons.

Where to Short Stellar (XLM)

Aside from eToro, the other major exchange you can use is Binance.

While Binance tends to be a bit more complex compared to eToro, they do have more cryptocurrencies on offer.

Frequently Asked Questions

Can I short Stellar on Binance?

Yes, you can short Stellar on Binance. They have over 300 cryptocurrencies on offer and specialise in the crypto market. They also have a great app and competitive fees.

About Stellar

Stellar is an open source distributed network that allows cross-asset value transfers. Stellar is an open-source financial system that provides low-cost financial services to people of all incomes. Stellar can exchange fiat-based currencies with cryptocurrencies. Stellar.org supports Stellar. It is centralized just like XRP. They are able to handle cross-platform transactions and micro transactions, much like XRP. Stellar.org is not for profit and their platform is open source.

Jed McCaleb was the founder of Stellar, which he founded in 2014. Jed McCaleb also founded Mt. Gox was co-founder and co-founders of Ripple. He launched the network system Stellar together with Joyce Kim, an ex-lawyer. Stellar is a payment platform that connects financial institutions to drastically cut down the time and cost involved in cross-border transfers. In fact, the protocol was used by both payment networks at first.

Users can use Lumens (XLM) to send any currency they own to others in a different currency.

To illustrate, Joe might want to send USD to Mary by using her EUR. He submits an offer to the distributed exchange to sell USD for EUR. This is called an order book. In order to minimize user fees, the network will use this order book to find the best rate of exchange for each transaction.

Anchors are what make this multi-currency transaction possible. Anchors are trustworthy entities that can issue credit or hold the deposits of individuals. Anchors are the link between different currencies and the Stellar Network.

Lumens, also known as digital currency or native assets, are used to facilitate multicurrency transactions on the Stellar network. XLM is the digital intermediary for multi-currency transaction.

A small fee of 0.00001XLM is charged for every transaction on the Stellar Network in order to stop DoS attacks (aka Spams) that will undoubtedly occur. It is low enough that it doesn't significantly impact the transaction's cost but high enough to deter spammers from spamming it.

Stellar was equipped with an inflation mechanism, which allowed account holders collectively to direct inflation-generated lumens to projects built on Stellar before Protocol 12.

As the network developed and grew, it became more apparent that inflation wasn't working according to plan. Account holders didn't set an inflation destination or joined inflation pools to claim the inflation. Inflation payments were still expensive to operate so a protocol modification to disable inflation was proposed and approved by validators. Finally, the protocol change was adopted as part a network upgrade.

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