The company you keep
Why institutions choose to become Stellar validators
Author
José Fernández da Ponte
Publishing date
There is no money in it.
That’s the first thing to understand about the decision MoneyGram, Figure, and Range just made. All three plan to join the Stellar network as Tier 1 validators. As validators on Stellar, they will receive no block rewards, no staking yield, no MEV awards, and no share of transaction fees.
If not for a reward, why would an institution operate infrastructure it could otherwise just use?
During a recent live stream, I asked Luke Tuttle, MoneyGram’s Chief Product and Technology Officer; Karl Samsen, Principal for $YLDS at Figure; and Andres Monteoliva, co-founder and CEO of Range.
The consensus effect
Most blockchains, including Ethereum, Solana, Cardano, and Avalanche, use some form of proof of stake. Under proof of stake, influence generally follows the amount of coin an operator controls, either directly or through delegation.
Two problems follow from that, and Stellar was designed to avoid both of them.
The first is concentration. Coinbase reported that 4.5 million ETH (12.17% of all ETH staked) was assigned to its validators in the first quarter of 2026. Coinbase does not control Ethereum, but more than one in eight staked ETH was being operated through a single company. When exchanges and staking services pool coins from millions of customers, a network that appears widely distributed can end up depending on a handful of operators.
The second is front-running. On many networks, whoever builds a block can determine transaction execution order. Whoever controls that order can place trades ahead of yours or sell preferred placement to professional traders. Front-running is one harmful form of what the industry calls Maximal Extractable Value (MEV). In March 2025, a trader swapping $220,000 of USDC for USDT on Uniswap lost more than $215,000 when a bot temporarily drained the pool’s liquidity in under eight seconds.
The infrastructure behind MEV is widespread. Agave is Solana’s official reference validator software, but validators representing more than 97% of stake use a modified fork called Jito-Solana. While Agave is neutral, one might conclude that Jito is more like an off-chain auction house, where traders pay validators to reorder transactions for profit. In many cases, they profit at the expense of ordinary users, who receive a worse price.
The Stellar network works differently on both counts. No validator receives protocol rewards, and no validator controls transaction order on its own. After validators agree on a batch, the protocol determines its order. Stellar relies on trust instead of money. Anyone can run a validator, but it has no influence unless other participants choose to trust it. Running more validators or acquiring more tokens does not change that. Influence must be earned through a public record of reliable behavior, and everyone can see which operators the network depends on. The group trusted by nearly everyone is known as Tier 1. This makes validator-driven MEV much harder to pull off, and unlike Eth and Solana, Stellar has no MEV networks or protocols to facilitate frontrunning.
When I describe it this way, the response is usually some version of “that sounds permissioned”, which is a fair thing to push on. The answer is in how the group forms. Nobody at the Stellar Development Foundation can appoint a Tier 1 validator. There is an onboarding process and a set of published requirements, but existing operators decide independently whether to trust a new one. Tier 1 is what emerges when enough of those decisions overlap. MoneyGram, Figure, and Range will join as Tier 1, but only as the current operators add them to their quorum configurations.
Three seats, one answer
In 2021, MoneyGram began its partnership with the Stellar Development Foundation, a relationship that now reaches several parts of its consumer payments business. MoneyGram Ramps connects digital wallets to its global cash network. Stellar is also the exclusive blockchain behind MoneyGram’s consumer balance feature and the network on which it issues MGUSD. MoneyGram itself serves more than 60 million active customers across over 200 countries and territories. Luke put the validator decision plainly: “I think it’s a natural extension to want to be part of the governance of something that you consider to be core to your infrastructure.”
Figure comes to the Stellar network from capital markets. It issues $YLDS, the first SEC-registered yield-bearing stablecoin, on the network and intends to remain a permanent issuer. Because $YLDS is a registered security, Figure Certificate Company must publicly disclose how it operates and is distributed. By issuing it on Stellar, Figure has chosen to rely on the network for a regulated part of its business. Karl described the validator set as a way of reading where a network is heading: “If you want to see the forward-looking vision of a blockchain, where we’re going together, take a look at those that are at the table securing the network right now.”
Range does something different from the other two. It runs treasury, risk, and compliance for companies moving money across stablecoins, digital assets, and fiat rails. Andres and his team spend their time judging whether networks are fit for institutions to use. He told me the standard has changed, and that transactions per second and even reliability now matter less to him than whether a company’s risk, finance, and compliance teams can operate on a network at all. One of the things he weighs is the validator set, which in his view has to be trusted and diverse, both geographically and in its infrastructure. Range applied that standard to the Stellar network and chose to join the set it had been assessing. As Andres put it: “For us, it’s an act of ownership, but also responsibility; it’s an evolving economy that relies on trust and reputation.”
Three different businesses, and underneath them the same reasoning. Each has enough riding on the Stellar network that an outage could affect its operations, products, or customers, and each concluded that this was reason enough to help hold it up. Once their integration is complete, Stellar will be secured in part by companies with something to lose if it breaks. That kind of commitment is harder to buy than stake and harder to walk away from.
Why this should matter to you
If you are weighing whether to issue on a public blockchain, what you are really weighing is a multi-year commitment to infrastructure you will not own and cannot control. The question is not only whether the technology works. It is also who will still be holding it up in five years and what their incentives will be.
On Stellar, the parties holding the network up carry some of the same exposure you do. If it stops, MoneyGram cannot settle over it, Figure loses a distribution channel, and Range’s customers cannot use the network. That is the basis of trust on Stellar: the validators are known, their performance is visible, and they share an interest in keeping the network running.
Look ten years ahead. The question is not just who keeps the network running, but who has the power to change it. Think of the Stellar network like Linux: open software that anyone can build on and no single company controls. No one actor, including us, can change the rules for everybody else. We could not do it alone if we wanted to, and that is the point.
What comes next
MoneyGram, Figure, and Range are expected to be fully integrated into the Stellar network’s quorum configuration by mid-August 2026. Once that happens, their validators will participate in consensus and coordinate with the other Tier 1 operators on future protocol upgrades.
These companies came to Stellar to build products and serve customers. They are now taking on the work required to keep the network operating.
That is the answer to why an institution would run infrastructure it could otherwise just use. Once a network becomes part of your business, keeping it running becomes part of the business too.