"Stellar is a platform that connects banks, payments systems, and people. Integrate to move money quickly, reliably, and at almost no cost." - stellar.org

Part 1 - Forming of Stellar Development Foundation & its Mandate

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Formation & Governance

The Stellar Development Foundation (SDF) was incorporated in the middle of 2014 as a nonprofit organization with Jed McCaleb and Joyce Kim as co-founders. The development of the network was initially lead by Jed McCaleb and Prof. David Mazières, while the foundation was led by Joyce Kim as executive director. The board of directors consisted of Jed McCaleb, Joyce Kim, Keith Rabois(co-founder of PayPal) and Patrick Collison(CEO of Stripe).

Stripe provided the initial contribution of $3 million to get the foundation up and going. They received 2% of Lumens (2 billion Lumens) in return. Four years later, at the time of writing, those 2 billion Lumens (which they received for $3 million) are worth $840 million. It is unclear how much of the initial distribution Stripe holds at present or how much they have auctioned off, but unless Stripe has changed their stance since 2014, whatever profit they make by auctioning off their Lumens will be returned to the Stellar Development Foundation for their operating expenses. You can read more about this on Stripes blog here.

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Since its formation, the SDF has undergone some changes to its board of directors and leadership. According to stellar.org, the current board consists of Keith Rabois, Shivani Siroya (CEO of Tala) and Greg Brockman (Former CTO at Stripe and co-founder of OpenAI).

Joyce Kim stepped down as Executive Director in 2016 to join SparkChain Capital as a Managing Partner. Source

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Members

Three individuals were elected as Members of the SDF at the time of incorporation. These Members serve for life and are in-charge of electing the Board of Directors.

The SDF Members are Patrick Collison, David Mazieres and Jed McCaleb. Each Member serves for life or until he or she becomes incapacitated or appoints a successor Member and resigns.

Members of Stellar.org are distinct from Directors (members of the Board of Directors). A Member can also be a Director and vice versa, but the Board and Members are entirely separate bodies with regard to SDF governance. Source

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Mandate

The mission of the Stellar Development Foundation (SDF) is to promote global financial access, literacy, and inclusion. SDF accomplishes this by expanding worldwide access to low-cost financial services through the development and maintenance of technology and partnerships.

SDF’s vision is an open and affordable financial system where people of all income levels can access simple-to-use, secure, and low cost financial services. SDF also aims to empower developers with useful technology to create financial products and services for their communities.

Responsibilities

To promote global financial access, literacy, and inclusion, SDF has taken up the following responsibilities:

• Develop and maintain a secure and low cost global transaction network (“Stellar Network”) and protocol (“Stellar Protocol”) that is high quality, open-source, and publicly accessible to everyone
• Develop and maintain publicly accessible tools and services to support the Stellar Network and its users
• Provide guidance and direction for the Stellar ecosystem
• Promote adoption of Stellar as a worldwide payment standard
• Distribute the native currency of the Stellar ecosystem, lumens, to the world to expand the reach of the network and create a more inclusive digital economy
• Create and support technical and non-technical partnerships and educational initiatives to boost digital financial literacy and development efforts at the institutional and community level

Funding

SDF employs full-time and part-time employees, as well as contractors, to develop and execute programs that promote global financial access, literacy, and inclusion. Aside from personnel costs, other operational expenses include the costs of office rent, office amenities, hardware, software, and partnership and educational programs.

Apart from the initial seed of $3 million from Stripe, SDF has 3 main methods of funding their operations;

1. 5% of the initially created Lumens were set aside as an operational fund. SDF auctions off these Lumens on various exchanges periodically.

2. Charitable contributions from companies or individuals

3. Foundation membership

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Authors note: In part 2 of this series, I will go over the native currency of the Stellar network (the Lumen). I will cover its creation, its distribution plan, its use case, its inflation mechanism and much more. So if you found this interesting , gained some knowledge that you didn't know before or if you feel that the article can be improved in any way, please leave a comment below as I would love to get some feedback! Thanks, and see you again soon.