Stellar has emerged as a key player in the rapidly expanding real-world asset (RWA) tokenization space, securing its position as the third-largest blockchain by RWA market value. With over $500 million in tokenized assets now live on its network—including major institutional offerings like the Franklin Templeton OnChain U.S. Government Money Fund and Circle’s USDC—Stellar is proving its appeal beyond speculative crypto circles and into mainstream finance.
However, a growing concern looms beneath the surface: nearly 80% of all circulating XLM tokens are held by just 10 wallets. This extreme concentration raises questions about decentralization, market resilience, and long-term price stability, even as user adoption and exchange holdings continue to climb.
XLM Supply Dominated by Top Wallets
The Stellar network currently has a circulating supply of approximately 30.9 billion XLM, with the top 10 wallets collectively holding around 25 billion XLM—nearly 80% of the total available supply.
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This level of centralization stands in stark contrast to broader crypto ideals of distributed ownership. For context, it's estimated that 90% of XLM holders own fewer than 100 tokens, meaning their individual influence on market dynamics is negligible.
Such imbalance creates potential vulnerabilities. If even one or two of these "whale" wallets decide to offload significant portions of their holdings, especially during periods of market uncertainty, it could trigger sharp volatility in XLM’s price.
Further amplifying concerns is the surge in exchange-based XLM reserves. On Binance alone, XLM holdings have skyrocketed from 180 million at the end of 2023 to over 1 billion by May 2025. While this indicates rising trading interest and liquidity, it also signals growing sell-side pressure—especially if these tokens are moved from cold storage to active trading accounts.
"High exchange balances often precede market movements. When whales accumulate on exchanges, it can be an early sign of distribution," notes a blockchain analyst tracking on-chain flows.
RWA Tokenization Fuels Stellar's Growth
Despite supply concerns, Stellar’s core utility continues to strengthen through its leadership in real-world asset tokenization—a sector expected to attract trillions in institutional capital over the next decade.
Today, Stellar ranks behind only Ethereum and ZKsync Era in total RWA value locked, hosting critical financial products such as:
- Franklin Templeton OnChain U.S. Government Money Fund – valued at $497 million
- Circle’s USDC stablecoin – with $345 million issued on the Stellar network
Together, these assets helped push total RWA value on Stellar past **$500 million**, up 84% from $275 million in January 2025. This rapid growth underscores increasing trust from traditional financial institutions seeking faster, cheaper alternatives to Ethereum for asset tokenization.
Stellar’s low transaction fees (averaging less than $0.01) and fast settlement times (3–5 seconds) make it ideal for high-volume, compliance-sensitive applications like bond issuance, fund tokenization, and cross-border payments.
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Moreover, partnerships with regulated entities signal a shift toward sustainable, compliance-first growth—positioning Stellar not just as a speculative platform but as a foundational layer for next-generation financial infrastructure.
Rising User Adoption Signals Strong Network Health
Beyond institutional traction, Stellar is also experiencing robust organic growth at the user level. Active wallet addresses have grown from 7.2 million in 2023 to 9.5 million by May 2025, adding roughly 5,000 new wallets per day.
This consistent expansion reflects more than just short-term speculation. It suggests growing confidence in Stellar’s long-term viability—particularly among developers, fintechs, and users engaging with RWA platforms built on the network.
Importantly, this rise in usage coincides with increased network activity tied to real economic functions: asset transfers, token redemptions, KYC-verified accounts, and regulated fund participation. These behaviors point to utility-driven adoption, not just price-based speculation.
While some might worry that increased circulation could dilute value or lead to dumping, in Stellar’s case, supply expansion appears aligned with strategic goals: onboarding more institutions, enabling broader access, and supporting scalable financial services.
Market Remains Divided on Centralization Risks
The debate over whether Stellar can sustain growth amid high token concentration remains unresolved.
On one side, bullish investors highlight:
- Strong fundamentals driven by real-world use cases
- Growing institutional validation via regulated product launches
- Consistent daily user growth indicating grassroots momentum
On the other hand, skeptics warn that until token distribution becomes more equitable, XLM remains vulnerable to sudden sell-offs. The risk isn't theoretical—historical data shows that markets often react sharply when large holders move substantial volumes to exchanges.
Still, there are potential solutions on the horizon. Proposals under discussion include:
- Introducing a formal staking mechanism to incentivize long-term holding
- Enhancing on-chain governance to give smaller holders a voice
- Launching initiatives to broaden token distribution through ecosystem grants or DeFi integrations
These measures could help reduce reliance on a few dominant addresses and foster a more resilient economic model over time.
Frequently Asked Questions (FAQ)
Why is Stellar popular for RWA tokenization?
Stellar offers fast transactions (3–5 seconds), near-zero fees (<$0.01), strong compliance tools, and native support for issuing custom assets. These features make it ideal for banks, asset managers, and fintechs looking to tokenize bonds, funds, and stablecoins efficiently and securely.
Does high XLM concentration pose a real risk?
Yes. With 80% of supply controlled by 10 wallets, any coordinated sale could cause significant price volatility. However, much of this supply may be held by foundations or long-term partners committed to network stability rather than short-term profit.
How does exchange reserve growth affect XLM?
Rising reserves—especially on major platforms like Binance—can indicate growing trading interest. But large deposits often precede selling activity. Monitoring exchange inflows is crucial for assessing near-term market pressure.
Is Stellar decentralized enough?
While its consensus protocol (Stellar Consensus Protocol) is decentralized, the token distribution is highly centralized. This discrepancy is a known challenge that developers and community leaders are actively working to address.
Can Stellar compete with Ethereum in RWA?
While Ethereum leads in total RWA value due to its vast ecosystem, Stellar competes effectively on cost, speed, and regulatory readiness. For institutions prioritizing efficiency and compliance over composability, Stellar presents a compelling alternative.
What could improve XLM’s long-term outlook?
Broader token distribution, introduction of staking rewards, deeper DeFi integration, and continued adoption by regulated financial institutions would all strengthen XLM’s sustainability and investor confidence.
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As Stellar continues to bridge traditional finance with blockchain technology, its success will depend not only on technological performance but also on fostering a fairer, more distributed economy. The road ahead is promising—but requires careful navigation of both opportunity and risk.