Protocol 23: Stellar’s Big Leap in Smart Contracts and Scalability
Why it matters: Stellar’s Protocol 23 is a major upgrade to the network’s architecture. It is designed to boost throughput, cut costs, and supercharge smart contract performance through eight new Core Advancement Proposals (CAPs). This is not just a technical update, it is the foundation for open DeFi markets on Stellar.
What’s Inside Protocol 23
1. CAP-0062, CAP-0065, CAP-0066 – Speed and Cost Optimization
- Live State Prioritization (CAP-0062): Separates active ledger data from archives into “Live State” and “Hot Archive.” Keeps contract state in RAM for faster and cheaper execution without manual restoration.
- Caching and In-Memory Reads (CAP-0065/66): Introduces a module cache and automatic restoration of archived entries. This reduces smart contract operational costs and minimizes disk I/O.
2. CAP-0063 – Parallel Execution for Smart Contracts
Transactions can now be executed across multiple CPU cores instead of one at a time. This delivers efficiency, speed, and scalability without requiring new hardware.
3. CAP-0067 – Unified Event Emission
Operators can emit standardized events for classic and Soroban operations, including fees and asset moves. Historical backfills are now possible with event flags EMIT_CLASSIC_EVENTS and BACKFILL_STELLAR_ASSET_EVENTS.
4. CAP-0068/0069 – Better Host Functions
Adds new tools such as smart contract getters and string or byte converters. This makes Soroban contract development smoother and more flexible.
5. CAP-0070 – Configurable Consensus Ring
Validators gain control over SCP timing. Block close time, nomination rounds, and timeouts can all be tuned gradually to improve latency and resilience without disruption.
Upgrade Timeline and Developer Steps
- Testnet live since mid-July 2025. Mainnet vote scheduled for September 3, 2025.
- Developers and validators need to upgrade Core, Horizon, SDKs, and RPCs, and prepare for breaking changes like TransactionMetaV4 and XDR updates.
Real-World Buzz
- XLM has surged about 97% since July, reaching $0.43. The rise is driven by network activity, DeFi growth, and anticipation for Protocol 23.
- Technical analysts see potential for a breakout, while institutional moves such as PayPal’s PYUSD integration amplify bullish sentiment.
The Lumexo Take
Protocol 23 is more than an upgrade. It is a path to cheaper, faster, and developer-friendly smart contracts on Stellar. That is exactly the foundation Lumexo builds on: autonomy, privacy, and open markets.
Expect higher capacity, native event support, lower friction, and real-time block optimization. With these tools in place, Lumexo’s vision of a user-owned financial frontier is not just possible, it is inevitable.
Summary Table
| Upgrade Feature | Benefit |
| Live state and caching | Lower cost and faster smart contract execution |
| Parallel execution | Higher throughput without new hardware |
| Improved event emission | Better tracing and backfill support |
| Host function enhancements | Easier Soroban development |
| SCP tuning config | Flexible block times and resilience |
| Event timeline | Testnet July 2025 → Mainnet vote September 3 |
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