Stellar's XLM Supply Concentration Sparks Decentralization Concerns, Despite 84% RWA Growth

Stellar (XLM) is currently facing scrutiny due to the concentration of its supply, with the top 10 wallets controlling nearly 80% of the total circulating supply. This situation has sparked concerns about decentralization and potential market fluctuations. The top 10 wallets hold approximately 25 billion XLM, which is about 80% of the total circulating supply of 30.9 billion XLM. This concentration of supply can undermine decentralization efforts, as a limited number of entities controlling such substantial amounts of XLM may be able to heavily influence market dynamics. In contrast, nearly 90% of XLM holders possess fewer than 100 XLM, indicating that the average retail investor has minimal market power. This dynamic heightens volatility risks, as a few “whale” investors can dramatically shift prices by selling large quantities.

Additionally, data indicates that XLM balances on Binance have surged from 180 million to 1 billion since late 2023. This drastic increase suggests heightened trading activity and potential selling pressure following adverse market news. Despite initial perceptions of negative implications from such data, some XLM proponents argue that increased circulating supply may signify growing adoption of the protocol. “This isn’t a random distribution — it’s a deliberate strategy. Supply growth is measured and controlled while adoption skyrockets,” noted one investor. On-chain metrics echo this perspective, with active Stellar accounts increasing from 7.2 million in 2023 to 9.5 million by May 2025, averaging 5,000 new wallet addresses added daily. This rise in accounts can help absorb circulating XLM, alleviating some concerns surrounding supply concentration.

Stellar is solidifying its role in the burgeoning real-world asset tokenization market, one of the most critical developments in the crypto space. Presently, Stellar ranks third in market capitalization related to RWAs, trailing only Ethereum and ZKsync Era. Key participants in Stellar’s RWA ecosystem include the Franklin Templeton OnChain US Government Money Fund, worth $497 million, and Circle’s USDC stablecoin, which currently holds $345 million on the Stellar network. The value of tokenized RWAs on Stellar has surged by approximately 84% in 2025, climbing from $275 million to over $500 million by May. This growth effectively illustrates Stellar’s increasing attractiveness for real-world asset tokenization applications.

In summary, while the concentration of XLM supply raises valid concerns about decentralization and market stability, the underlying demand for Stellar services, particularly in the RWA sector, presents substantial opportunities. Moving forward, staying informed about both supply dynamics and market adoption will be critical for investors looking to navigate Stellar’s complex landscape.