XLM as a Foundational Asset in Tokenized Finance and DeFi

In the rapidly evolving landscape of tokenized finance and decentralized finance (DeFi), Stellar's native token, XLM, is emerging as a critical infrastructure asset. The Stellar network, long celebrated for its cross-border payment capabilities, has pivoted to become a cornerstone for real-world asset (RWA) tokenization and smart contract innovation through its Soroban platform. With Protocol 23's activation in September 2025, Stellar has unlocked a new era of scalability, cost efficiency, and institutional adoption, positioning XLM as a 10x opportunity for investors who recognize its foundational role in this transformation.

Soroban's Technical Breakthroughs: Enabling Enterprise-Grade Utility

Stellar's Soroban smart contract platform, launched in 2024, has been a game-changer for RWA tokenization. However, the recent Protocol 23 upgrade has elevated its capabilities to enterprise-grade levels. Key advancements include parallel transaction execution, which allows multiple smart contract operations to be processed simultaneously, and in-memory state management, eliminating the need for disk reads during contract execution. These innovations reduce transaction costs by up to 70% and increase throughput to 5,000 transactions per second, making Stellar competitive with Ethereum and Solana for complex financial applications Stellar | Announcing Protocol 23^[3].

The introduction of reusable Wasm module caching further optimizes developer workflows by minimizing redundant code parsing and validation. This not only lowers entry barriers for developers but also aligns Stellar with the growing demand for modular, interoperable blockchain solutions. As stated by Stellar's official documentation, these upgrades “position the network as a preferred infrastructure for tokenizing real-world assets while maintaining sub-five-second finality and energy efficiency” Stellar | Intro to Stellar | Blockchain for Real World Applications^[2].

XLM's Dual Role: Gas Token and Consensus Mechanism

XLM's utility extends beyond transaction fees. As the native token of the Stellar Consensus Protocol (SCP), it secures the network through a decentralized, reputation-based system that avoids the energy inefficiencies of proof-of-work models Stellar | Blockchain Network for Smart Contracts, DeFi, Payments^[1]. This dual role—serving as both a gas token and a consensus mechanism—creates a flywheel effect: increased RWA tokenization drives higher transaction volume, which in turn increases demand for XLM to cover fees and secure the network.

In 2025, Stellar's RWA ecosystem has already attracted $522 million in tokenized assets, including WisdomTree's U.S. Treasuries and Franklin Templeton's BENJI fund, the first U.S.-registered money market fund on a public blockchain Stellar (XLM) Price Prediction For 2025 & Beyond^[4]. These projects rely on XLM to facilitate low-cost, high-speed asset conversions and settlements. For instance, the BENJI fund uses Stellar's asset issuance framework to tokenize shares, enabling fractional ownership and 24/7 trading—a use case that could scale to trillions of dollars in the coming years.

Institutional Adoption and Regulatory Alignment

Stellar's appeal to institutions stems from its compliance-first design. The network's anchor ecosystem—comprising regulated entities that act as gateways between fiat and crypto—ensures seamless integration with traditional financial systems. This has attracted major players like Franklin Templeton and WisdomTree, which prioritize regulatory clarity in their tokenization strategies Stellar | Blockchain Network for Smart Contracts, DeFi, Payments^[1].

Moreover, Stellar's low-cost, high-throughput infrastructure aligns with the needs of RWA projects, which often require frequent, small-value transactions. For example, tokenized real estate or infrastructure assets may involve daily yield distributions or fractional transfers, tasks that Ethereum's high gas fees render impractical. By contrast, Stellar's $0.0001 per transaction cost model makes it a viable backbone for these applications Stellar (XLM) Price Prediction For 2025 & Beyond^[4].

The 10x Opportunity: Demand Elasticity and Network Effects

The case for XLM's 10x potential rests on its demand elasticity. As RWA tokenization scales, the need for XLM to pay for smart contract execution, asset conversions, and consensus security will grow exponentially. This is compounded by network effects: the more institutions adopt Stellar for RWA, the more developers build on Soroban, further entrenching XLM's utility.

Protocol 23's parallel execution and cost reductions have already triggered a surge in enterprise interest. For instance, a major European bank recently announced plans to tokenize $1 billion in commercial real estate assets on Stellar by Q1 2026, citing the platform's “predictable costs and institutional-grade security” Stellar (XLM) Price Prediction For 2025 & Beyond^[4]. Such developments suggest that XLM's role will expand from a niche utility token to a systemic asset in global finance.

Conclusion: A Catalyst for the Tokenized Future

XLM's journey from a cross-border payment token to a foundational asset in tokenized finance underscores Stellar's adaptability. With Soroban's technical maturity, Protocol 23's scalability, and a growing RWA ecosystem, XLM is uniquely positioned to benefit from the convergence of DeFi and traditional finance. For investors, this represents a rare opportunity to back a blockchain infrastructure asset with clear, measurable growth drivers—and a 10x trajectory that hinges on the very real demand for scalable, compliant, and energy-efficient financial innovation.