United States securities and exchange commission logo





                             June 13, 2022

       Michael Sonnenshein
       Chief Executive Officer
       Grayscale Stellar Lumens Trust (XLM)
       290 Harbor Drive, 4th Floor
       Stamford, CT 06902

                                                        Re: Grayscale Stellar
Lumens Trust (XLM)
                                                            Registration
Statement on Form 10
                                                            Filed May 5, 2022
                                                            File No. 000-56434

       Dear Mr. Sonnenshein:

              We have reviewed your filing and have the following comments. In
some of our
       comments, we may ask you to provide us with information so we may better
understand your
       disclosure.

              Please respond to these comments within ten business days by
providing the requested
       information or advise us as soon as possible when you will respond. If
you do not believe our
       comments apply to your facts and circumstances, please tell us why in
your response.

            After reviewing your response and any amendment you may file in
response to these
       comments, we may have additional comments.

       Exhibit 99.1

       General

   1.                                                   Please disclose as of a
recent date the percentage of the total circulating supply of XLM
                                                        held by the Trust and
discuss any material risks associated with the size of the Trust's
                                                        position. Please also
discuss whether this percentage ownership will allow the Trust or
                                                        the Sponsor to
participate in or otherwise influence the development of the Stellar
                                                        Network.
   2.                                                   We note your
description of XLM as being created through a "hard fork in the Ripple
                                                        Network" and as having
several similarities with XRP, a crypto asset created by Ripple
                                                        Labs. Please disclose
the differences and similarities between XLM and XRP, including
                                                        any differences or
similarities in the creation, promotion or sale of each crypto asset. In
                                                        addition, please
disclose, in your summary section, a summary of XLM's differences and
                                                        similarities with XRP,
and state that the outcome of the SEC   s enforcement action against
 Michael Sonnenshein
FirstName  LastNameMichael  Sonnenshein
Grayscale Stellar Lumens Trust (XLM)
Comapany
June       NameGrayscale Stellar Lumens Trust (XLM)
     13, 2022
June 13,
Page 2 2022 Page 2
FirstName LastName
         XRP may affect the Sponsor   s analysis regarding the status of XLM as
a "security" under
         the U.S. federal securities laws and that, if XRP is found to be a
security, this may have a
         material adverse effect on the Trust and the Shares. In this regard,
we note your
         disclosure on page 37.

3.       Please provide us with your analysis that XLM is not a security under
Section 2(a)(1) of
         the Securities Act.
Cover Page

4.       Please clarify here and throughout that the Shares quoted on the OTCQX
have traded at
         both a premium and a discount to the value of the Trust's Digital
Asset Holdings per
         Share. In this regard, we note that from January 1, 2022 to April 28,
2022, the maximum
         discount of the closing price of the Shares quoted on OTCQX below the
value of the
         Trust   s Digital Asset Holdings per Share was 10% and the average
discount was 4%.
Overview
The Trust and the Shares, page 4

5.       We note your disclosure that Stellar Lumens has a current circulating
supply of 24.7
         billion, that, as of December 31, 2021, the 24-hour trading volume of
Stellar Lumens was
         approximately $303 million, and that, as of December 31, 2021, the
aggregate market
         value of Stellar Lumens was $6.6 billion. So that investors have a
point of comparison,
         please disclose the circulating supply Bitcoin, the 24-hour trading
volume of Bitcoin
         and the aggregate market value of Bitcoin. In this regard, we note
that you compare
         Stellar Lumens to Bitcoin throughout the registration statement.
6.       Please revise to disclose here that, as of December 31, 2021, XLM was
the 28th largest
         crypto asset by market capitalization as tracked by CoinMarketCap.com.
In this regard,
         we note your disclosure on page 23.
7.       Please revise to include a summary of the Stellar Development
Foundation's current role
         in the distribution of XLM and the percentage of XLM it currently
holds. In addition,
         please revise to include a summary of how the validation on the
Stellar Network differs
         from proof-of-work and proof-of-stake.
8.       Please summarize the privacy features of XLM. In this regard, we note
your disclosure on
         page 28 that "[s]ervice providers may decide to terminate their
relationships with the Trust
         due to concerns that the introduction of privacy enhancing features to
the Stellar Network
         may increase the potential for XLM to be used to facilitate crime,
exposing such service
         providers to potential reputational harm."
9.       Please revise to include a discussion of the fact that XLM has seen
limited use and
         acceptance by the market for its primary purpose, and expand the first
complete risk factor
         on page 14 to describe more fully the limited use and acceptance of
XLM for its primary
         purpose. In this regard, we note your disclosure on page 57.
 Michael Sonnenshein
FirstName  LastNameMichael  Sonnenshein
Grayscale Stellar Lumens Trust (XLM)
Comapany
June       NameGrayscale Stellar Lumens Trust (XLM)
     13, 2022
June 13,
Page 3 2022 Page 3
FirstName LastName
Summary of Risk Factors, page 9

10.      Please revise the second to the last bullet point on page 9 to
disclose that, as of December
         31, 2021, SDF held 25 billion of the 50 billion XLM. Similarly, please
revise the first risk
         factor on page 16 to disclose the percentage of XLM held by SDF.
Risk Factors
Risk Factors Related to Digital Assets, page 12

11.      Please discuss risks related to the perception that the Stellar
Network may not be
         a decentralized network due to the fact that one entity controls and
distributes XLM and
         that there are a limited number of validators. Discuss what impact
this may have on the
         success and adoption of XLM. Please also consider revising your
statement on page
         57 that the Stellar Network has "many" validators to disclose the
number of validators the
         Stellar Network currently has.
12.      Given the Stellar Network's primary function as a cross-currency
payment platform,
         please include risks related to the use of the Stellar Network for
money laundering or
         other illicit purposes, and the effect that such activities could have
on the value of XLM
         and the Trust's shares, including, but not limited to, the risk of
potential criminal or civil
         suits or the removal of XLM from crypto asset exchanges.
If the digital asset award for validating blocks, page 16

13.      Please revise to disclose here that validators do not receive a
digital asset reward for
         acting on the Stellar Network.
Competition from the emergence or growth of other digital assets, page 23

14.      We note your disclosure on page 24 that XLM is currently supported by
fewer "regulated
         exchanges" than crypto assets such as Bitcoin and Ether. Please
clarify what you mean by
         "regulated exchanges."
Risk Factors Related to the Trust and the Shares
The Trust Agreement includes provisions that limit shareholders' voting , page
32

15.      We note your disclosure on page 32 that the derivative actions
provision in the Trust
         Agreement does not apply to claims under the federal securities laws
and the rules and
         regulations thereunder, but Section 7.4 of your Trust Agreement in
Exhibit 4.1 is silent as
         to whether the provision applies to claims under the Securities Act or
Exchange Act.
         Please tell us how you will inform investors in future filings that
the provision does not
         apply to any actions arising under the Securities Act or Exchange Act.
The Sponsor is solely responsible for determining the value, page 33

16.      We note your disclosure on page 53 that on February 1, 2022 the Index
Price Provider and
         the Sponsor entered into the Index License Agreement. If material,
please disclose how
 Michael Sonnenshein
FirstName  LastNameMichael  Sonnenshein
Grayscale Stellar Lumens Trust (XLM)
Comapany
June       NameGrayscale Stellar Lumens Trust (XLM)
     13, 2022
June 13,
Page 4 2022 Page 4
FirstName LastName
         the use of the the Index Price under the current agreement impacted
the Trust and
         investors as compared to the methodology used under the prior
agreement.
Risk Factors Related to the Regulation of the Trust and the Shares
A determination that ZEN or any other digital asset is a "security", page 36

17.      We note your disclosure on page 36 that the SEC staff has indicated
that the security
         status of a particular digital asset can change over time as the
relevant facts evolve and
         your disclosure on page 36 that the Sponsor acknowledges that XLM may
in the future be
         found by the SEC or a federal court to be a security notwithstanding
the Sponsor   s
         conclusion that XLM is not a security. Please revise here to clarify
that XLM, based on
         the relevant facts as they exist today, may be a security under the
federal securities laws.
18.      We note your disclosure on page 37 regarding the impact of the SEC   s
complaint against
         the promoters of XRP alleging that they raised more than $1.3 billion
through XRP sales
         that should have been registered under the federal securities laws but
were not. Please
         expand your discussion of the impact of the SEC   s action against the
promoters of XRP to
         disclose that the Sponsor subsequently terminated and liquidated the
Grayscale XRP Trust
         (XRP).
Regulatory changes or actions in foreign jurisdictions may, page 38

19.      We note your disclosure on page 39 that "[f]oreign laws, regulations
or directives may
         conflict with those of the United States and may negatively impact the
acceptance of one
         or more digital assets by users, merchants and service providers
outside the United States
         and may therefore impede the growth or sustainability of the digital
asset economy in . . .
         Russia . . ., or otherwise negatively affect the value of XLM." Please
disclose whether
         Russia's invasion of Ukraine has impacted the value of XLM or trading
volume of XLM.
Overview of Stellar Lumens
Creation of New XLM, page 49

20.      Please explain further the differences, and any potential risks that
may be associated with
         the fact that the Stellar Development Foundation created the full
amount of XLM and then
         distributes it via its distribution procedures, as opposed to block
creation via mining, or
         validation, as associated with crypto assets such as Bitcoin. Please
explain how a
         centralized distribution procedure, which can be changed by the SDF,
may present risks as
         to the future volume or price of XLM.
The Index and the Index Price, page 52

21.      We note your disclosure on page 53 that the Sponsor agreed to the
Index License
         Agreement with the Index Provider on February 1, 2022 and terminated a
previous license
         agreement. To the extent that the quantitative disclosure throughout
regarding the Trust's
         Digital Asset Holdings are based upon a different methodology than the
one used in the
         current Index License Agreement, please explain the material
differences between how
 Michael Sonnenshein
Grayscale Stellar Lumens Trust (XLM)
June 13, 2022
Page 5
         the index price under such previous agreement was calculated and how
the Index Price
         under the present Index License Agreement is calculated, and explain
the reason for
         terminating the previous agreement and entering into the present Index
License
         Agreement.
22.      Please confirm that you have provided a materially complete
description of the Index
         Price methodology.
Forms of Attack Against the Stellar Network, page 56

23.      We note your disclosure on page 56 that "the Stellar Network requires
users to maintain a
         list of trusted validators to verify transactions on the Stellar
Ledger," and that "[i]f a
         malicious actor were to gain control over a sufficient number of
trusted validators it would
         have the ability to manipulate the Stellar Ledger and thus the Stellar
Network." Please
         expand your disclose here to explain who is considered a "user", how
each user maintains
         a list of validators, and how a malicious actor would gain control of
validators.
        We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.

        You may contact Ben Phippen at 202-551-3697 or Amit Pande, Accounting
Branch
Chief, at 202-551-3423 if you have questions regarding comments on the
financial statements
and related matters. Please contact Christopher Wall at 202-551-4162 or Sonia
Bednarowski at
202-551-3666 with any other questions.



FirstName LastNameMichael Sonnenshein                          Sincerely,
Comapany NameGrayscale Stellar Lumens Trust (XLM)
                                                               Division of
Corporation Finance
June 13, 2022 Page 5                                           Office of
Finance
FirstName LastName