Navigating the Complex Landscape of Stellar (XLM) in 2025

Stellar (XLM) is navigating a complex landscape in 2025. While the blockchain network continues to gain traction as a real-world asset (RWA) hub, concerns around centralisation and potential market manipulation are also intensifying.

Stellar has recorded an 84% rise in RWA-linked value this year, surpassing $500 million. However, with nearly 80% of XLM supply controlled by just ten wallets, analysts warn of volatility risks if large holders move to sell.

Meanwhile, daily wallet growth and rising exchange balances suggest expanding adoption but also potential sell pressure. As institutional products integrate with Stellar and retail participation climbs, investors remain split on whether the current distribution model can support long-term price stability without triggering major corrections.

XLM supply is largely controlled by top wallets

The top 10 wallets hold around 25 billion XLM out of a total of 30.9 billion in circulation, which equates to roughly 80% of the available token supply.

This significant imbalance raises questions about decentralisation and network resilience. In contrast, 90% of holders reportedly own fewer than 100 XLM, giving them little to no influence over market trends.

This extreme concentration could have serious implications for XLM’s price stability. If a small number of holders were to liquidate significant volumes, the market could face sharp corrections.

The risk is further amplified by rising exchange balances, with XLM held on Binance growing from 180 million in late 2023 to 1 billion by May 2025, according to stellar expert. This increase indicates higher trading interest but also the possibility of mounting sell pressure.

RWA tokenisation pushes Stellar adoption

Despite supply concerns, Stellar has made clear inroads into the tokenisation of real-world assets — a sector that is drawing institutional capital and crypto-native investment in 2025.

Stellar currently ranks as the third-largest protocol by RWA market capitalisation, trailing only Ethereum and ZKsync Era.

Institutional-grade products like the Franklin Templeton OnChain US Government Money Fund, valued at $497 million, and Circle’s USDC stablecoin with $345 million on the Stellar chain have helped push the total RWA value on Stellar to over $500 million.

This is up from $275 million in January, marking an 84% increase within five months.

Such rapid growth indicates that more traditional financial institutions are considering Stellar as an alternative to Ethereum for tokenized assets. Faster transactions and lower costs remain key attractions.

On-chain growth supports the adoption trend

The Stellar network has also shown strong user base expansion. Stellar’s active accounts grew from 7.2 million in 2023 to 9.5 million by May 2025.

This represents an average addition of about 5,000 wallet addresses daily. The growth helps counterbalance the impact of concentrated holdings as demand rises across a broadening user base.

This daily activity suggests more than speculative trading. It indicates rising confidence in Stellar’s long-term utility, particularly in the RWA sector.

While increased circulating supply often raises concerns about dilution or dumping, in Stellar’s case, it appears aligned with deliberate expansion strategies aimed at onboarding more institutional and retail users.

Investors remain split on centralisation risks

While Stellar’s RWA integrations and active user growth highlight ongoing demand, the risk associated with token concentration cannot be overlooked. If the top holders, or “whales,” choose to exit positions, price shocks are likely.

However, if network development continues alongside strategic RWA partnerships, the Stellar blockchain could retain and grow its niche within the broader crypto asset ecosystem.

Although Stellar’s fundamentals appear strong, investors are likely to remain cautious until the network addresses its centralisation risks. Efforts to increase token distribution, improve governance, or introduce staking mechanisms may help mitigate future volatility.