The Stellar blockchain has taken a significant step forward by upgrading its Testnet to Protocol 21, a crucial milestone in its journey towards supporting smart contracts. This upgrade positions Stellar to achieve the remaining goals outlined in its roadmap, as it aims to join the ranks of prominent layer-1 blockchain protocols with full smart contract functionality.

The Stellar community played a vital role in approving the proposal to adopt smart contract capabilities back in February. Now, with the Testnet upgrade complete, Stellar has unveiled a timeline for the upcoming milestones, including the implementation of stable releases for Stellar Core, Horizon, and RPC on May 30th, a Testnet reset on June 11th to ensure optimal performance of the changes, and a Mainnet upgrade vote on June 18th, which will determine the future direction of the network.

If all goes according to plan, Stellar's transition to smart contracts will bring substantial benefits to its native asset, XLM. As the blockchain embraces Decentralized Finance (DeFi), XLM will play a central role, potentially leading to a significant price impact in the long run. However, at the time of writing, XLM is trading at $0.103, down by 1.33% in the past 24 hours.

Stellar is not the only blockchain exploring major upgrades. Other layer-1 protocols, such as Filecoin (FIL), EOS, and Chainlink (LINK), have already implemented smart contract functionality to integrate with the Ethereum Virtual Machine (EVM) ecosystem. Ethereum itself has undergone a significant transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) through the Merge, one of the most ambitious upgrades in the industry to date.

The Soroban smart contract upgrade on Stellar has already gained broad ecosystem support, with the first set of smart contracts going live on the protocol following the certification of the Protocol 21 integration.