Stellar (XLM) is navigating a complex landscape in 2025.
As the blockchain network continues to advance as a hub for tokenized real-world assets (RWA), concerns over concentration and potential market manipulation are also intensifying.
Stellar has seen an 84% increase this year in risk-weighted asset value, surpassing $500 million.
However, with nearly 80% of XLM’s supply controlled by just ten wallets, analysts warn of increased volatility risk if large holders decide to sell.
At the same time, the daily growth in wallets and the rise in exchange balances indicate growing adoption, but also the potential for heightened selling pressure.
As institutional products integrate with Stellar and retail participation increases, investors remain divided on whether the current distribution model can support long-term price stability without triggering major corrections.
XLM supply concentrated in top wallets
The top 10 wallets hold roughly 25 billion XLM out of 30.9 billion circulating—about 80% of the available token supply.
Source: CoinMarketCap
This large imbalance raises questions about decentralization and network resilience.
Conversely, about 90% of holders own fewer than 100 XLM, giving them minimal influence over market trends.
Such concentration could have serious implications for XLM price stability.
If a small number of holders liquidated large volumes, the market could face sharp corrections.
The risk is further amplified by rising exchange balances: XLM held on Binance increased from 180 million at the end of 2023 to 1 billion in May 2025, according to Stellar Expert.
This rise signals stronger trading interest but also the possibility of growing selling pressure.
RWA tokenization drives XLM adoption
Despite supply concentration concerns, Stellar has made clear progress in tokenizing real-world assets—a sector that attracted both institutional capital and native crypto investment in 2025.
Stellar currently ranks third among protocols by RWA market capitalization, behind Ethereum and ZKsync Era.
Institutional-grade products such as the Franklin Templeton OnChain US Government Money Fund, valued at $497 million, and Circle’s USDC on the Stellar chain with $345 million have helped push Stellar’s total risk-weighted asset value above $500 million.
That marks an increase from $275 million in January—an 84% rise in five months.
This growth indicates that traditional financial institutions increasingly view Stellar as an alternative to Ethereum for tokenized assets.
Faster transaction throughput and lower costs remain key attractions.
On-chain growth supports adoption trend
The XLM network has also seen a notable expansion of its user base. Active Stellar accounts rose from 7.2 million in 2023 to 9.5 million in May 2025.
That equates to roughly 5,000 new wallet addresses per day on average. This growth helps offset the impact of concentrated holdings as demand expands across a broader user base.
Daily activity on the network is not only driven by speculative trading.
It also reflects growing confidence in Stellar’s long-term utility, particularly within risk-weighted asset use cases.
While increases in circulating supply often raise concerns about dilution or dumping, in Stellar’s case these increases appear aligned with deliberate expansion strategies to onboard more institutional and retail users.
Market remains divided on centralization risks
Although Stellar’s RWA integrations and rising active user counts highlight sustained demand, the risk tied to token concentration cannot be overlooked.
If major holders—or “whales”—decide to exit positions, price shocks are likely.
However, if network development continues alongside strategic RWA partnerships, Stellar could retain and expand its niche within the broader crypto asset ecosystem.
While Stellar’s fundamentals appear solid, investors should remain cautious until the network addresses its centralization risks.
Efforts to broaden token distribution, improve governance, or introduce staking mechanisms could help mitigate future volatility.