Stellar's (XLM) Struggle for Relevance Amid Growing Competition in the Utility-Driven Altcoin Space

The real-world asset (RWA) tokenization market has exploded in 2025, growing from $15.2 billion in late 2024 to $24 billion by mid-year. Stellar (XLM), once a pioneer in cross-border payments, now faces a critical juncture: Can it reclaim its position as a top RWA tokenizer, or will emerging challengers like Algorand (ALGO), Hedera (HBAR), and Remittix (RTX) outpace it in this high-stakes arena?

Stellar's Strategic Moves in 2025

Stellar has made bold strides in 2025, leveraging its low-cost, high-speed infrastructure to tokenize assets like money market funds, real estate, and equities. Key developments include:
- Archax Partnership: The tokenization of Aberdeen Asset Management's money market fund on Stellar's Layer-1 network, backed by a direct investment from the Stellar Development Foundation (SDF).
- ERC-3643 Integration: Joining the ERC-3643 Association to enable cross-chain compliance between Stellar and Ethereum, ensuring tokenized assets meet global regulatory standards.
- Protocol 23 Upgrade: Scheduled for August 26, 2025, this upgrade introduces parallel execution for Soroban smart contracts, aiming to boost throughput to 5,000 TPS and reduce fees.
- $3 Billion RWA Target: Stellar aims to tokenize $3 billion in real-world assets by year-end, a 10x increase from late 2024, positioning itself as a bridge between traditional finance and blockchain.

These moves highlight Stellar's institutional-grade appeal, particularly for projects requiring fast, secure, and compliant tokenization. However, the network's focus on payments and remittances—its historical strength—may limit its ability to compete directly with platforms designed for broader RWA use cases.

The Rising Threats: Algorand, Hedera, and Remittix

Algorand (ALGO) has emerged as a dominant force in tokenized stocks, capturing 66% of the market share in 2025. Its Pure Proof-of-Stake (PPoS) consensus mechanism enables 10,000 TPS and sub-second finality, making it ideal for institutional-grade tokenization of real estate, commodities, and private credit. Algorand's partnerships with governments and enterprises, such as tokenized U.S. Treasuries and supply chain solutions, underscore its versatility.

Hedera (HBAR) leverages its Hashgraph consensus to offer ultra-fast transactions (settling in under three seconds) and robust security. Its enterprise-grade infrastructure has attracted projects tokenizing real estate, carbon credits, and government-issued securities. Hedera's governance by a council of global institutions (e.g., Google, IBM) adds credibility, particularly in regulated markets.

Remittix (RTX), a newer entrant, is disrupting the RWA space with its payFi (payment + finance) platform. By enabling real-time crypto-to-fiat conversions in 30+ countries, Remittix is tokenizing cross-border payments and bridging the gap between blockchain and traditional finance. Its deflationary model and $20 million presale funding position it as a high-growth contender in 2025.

Competitive Analysis: Strengths and Weaknesses

Platform	Key Strengths	Key Weaknesses
Stellar (XLM)	Low-cost, high-speed infrastructure; strong institutional partnerships (e.g., Archax); growing RWA target.	Historically focused on payments; limited developer tools for complex tokenization.
Algorand (ALGO)	High throughput and finality; 66% market share in tokenized stocks; institutional-grade compliance.	Smaller ecosystem compared to Ethereum; less emphasis on remittances.
Hedera (HBAR)	Enterprise-grade security and speed; governance by global institutions; tokenizing real estate and carbon credits.	Hashgraph's scalability untested at mass adoption; higher fees for compliance.
Remittix (RTX)	Real-world utility in cross-border payments; deflationary model; growing presale momentum.	Newer platform with limited institutional adoption; regulatory risks in emerging markets.

Investment Implications

Stellar's 2025 roadmap is ambitious, but its success hinges on executing Protocol 23 and attracting more institutional RWA projects. While its partnerships with Archax and Pi Network are promising, Algorand's dominance in tokenized stocks and Hedera's enterprise-grade infrastructure pose significant threats. Remittix's practical utility in payments could further erode XLM's market share in this segment.

For investors, the key question is whether Stellar can transition from a payments-focused blockchain to a full-fledged RWA platform. If Protocol 23 delivers on its promises of scalability and reduced fees, XLM could see renewed interest. However, Algorand and Hedera's established ecosystems and regulatory alignment may give them an edge in the long term.

Conclusion: A Tenuous Relevance

Stellar's 2025 initiatives demonstrate its commitment to RWA tokenization, but the landscape is increasingly crowded. While XLM's low-cost infrastructure and strategic partnerships remain strengths, Algorand's market leadership, Hedera's institutional credibility, and Remittix's real-world utility present formidable challenges.

For investors, a diversified approach is prudent. Allocations to XLM could be justified if the network successfully executes its upgrades and secures more institutional RWA projects. However, hedging with Algorand or Hedera—platforms with broader RWA use cases and stronger developer ecosystems—may offer more balanced exposure to the tokenization boom.

In the end, Stellar's ability to reclaim its relevance will depend not just on technological upgrades, but on its capacity to adapt to a market where utility and compliance are king.