Stellar holds $3.56B in tokenized assets but only 0.1% is used as DeFi collateral, RedStone finds

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The blockchain's tokenized asset market has grown 5.5 times in a year, but issuer restrictions and limited liquidity are preventing most assets from entering lending protocols.

Tue 27 Oct 2026 · 13:35 EDT · 4 min read

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Stellar has accumulated $3.56 billion in tokenized real world assets, but just $4.2 million, or approximately 0.1%, is being used as collateral in decentralized lending markets, according to a new report from blockchain oracle provider RedStone.

The research, based on data collected through October 16, found that Stellar’s tokenized asset market expanded 5.5 times over the previous year, making it the fourth largest blockchain for distributed RWA value.

Despite that growth, most of the network’s tokenized securities remain outside decentralized finance because of restrictions on who can hold, transfer and redeem the assets.

RedStone found that approximately 83% of Stellar’s tokenized RWA value has no available onchain trading market, making it difficult for lending protocols to liquidate collateral when borrowers default.

The findings come ahead of the Depository Trust & Clearing Corporation’s planned introduction of tokenized securities on Stellar in the first half of 2027, which could bring additional institutional assets to the network.

Stellar’s tokenized asset market grows 5.5 times in one year

According to RedStone, Stellar’s distributed RWA value increased from $645 million a year earlier to $3.56 billion as of October 16, with funds accounting for roughly three quarters of the total.

Spiko’s tokenized funds represent a significant share of activity, including its eurSAFO overnight swap fund, which accounts for approximately $1.35 billion.

Other major products include Ondo Finance’s USDY token at $537.5 million, Realiz’s VuMe Bond 2030 at $500 million and Franklin Templeton’s BENJI tokenized Treasury fund at approximately $441.7 million.

The network supports 83 tokenized assets, with the five largest representing 87% of total distributed RWA value.

Stellar’s RWA holder count reached 23,706, up 14.5% over 30 days, while monthly transfer volume totaled $642 million, according to the report’s RWA.xyz figures.

However, the growth in issuance has not translated into comparable activity across lending protocols.

RedStone found that only $4.2 million in tokenized assets was deposited as lending collateral, with another $8.7 million in decentralized exchange liquidity and approximately $1.5 million in a yield tokenization contract.

Together, these categories accounted for roughly 0.4% of Stellar’s tokenized RWA market.

The report found similarly limited collateral adoption on other blockchains. On Ethereum, approximately 2.5% of the value across 19 major tokenized fund products examined was being used as lending collateral.

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Issuer restrictions prevent tokenized assets from entering DeFi

RedStone attributed the gap to compliance controls that make Stellar attractive to institutional issuers but difficult to integrate with decentralized lending.

The blockchain supports authorization requirements, asset freezing and clawback mechanisms that allow issuers to control who holds tokens and, in certain circumstances, recover assets.

These capabilities are important for regulated financial products, but they introduce complications for lending protocols that depend on automated liquidations.

When a borrower defaults, a lending protocol typically needs to transfer collateral to a liquidator, who can sell the asset to recover the outstanding loan.

That process becomes difficult when the liquidator must be approved by the issuer before receiving the token.

Asset freezes and clawbacks create additional risks because collateral could become inaccessible or be removed while a loan remains outstanding.

According to RedStone, none of the major permissioned funds issued by Spiko, Franklin Templeton, Realiz or WisdomTree was held in a smart contract in its October 16 snapshot.

Instead, almost all RWA lending collateral was concentrated in Centrifuge’s deJAAA token, a freely transferable wrapper representing exposure to a fund holding AAA rated collateralized loan obligations.

The asset is used in lending markets operated by Templar Protocol, which supports borrowing USDC against tokenized assets.

Templar allows loans of up to approximately 95% of deJAAA’s collateral value, reflecting its relatively stable pricing and open transferability.

However, RedStone warned that the underlying fund’s credit rating does not account for the additional risks introduced by token wrappers, bridges, lending contracts and liquidation mechanisms.

DTCC’s 2027 Stellar rollout brings new questions for DeFi

The findings come as DTCC prepares to introduce tokenized securities on Stellar through its planned integration with the network.

In May, DTCC and the Stellar Development Foundation announced plans to make DTC custodied assets available on Stellar during the first half of 2027.

The initiative follows a December 2025 SEC no action letter authorizing DTC to operate a tokenization service under specified conditions.

Eligible assets under consideration include Russell 1000 stocks, major index ETFs and US Treasury securities.

However, the planned tokens will operate under strict ownership and transfer requirements.

Only registered DTC participant wallets will be authorized to hold and transfer the tokenized securities, while DTC will retain administrative powers to correct transactions and manage token issuance.

Those restrictions could make integrating the assets into permissionless lending protocols difficult without additional infrastructure.

RedStone argued that institutional tokenization requires lending systems capable of working with approved liquidators, reliable redemption mechanisms and pricing systems that account for traditional market closures.

The report pointed to permissioned liquidation auctions as one potential solution, allowing preapproved liquidity providers to purchase collateral from lending markets while preserving issuer compliance requirements.

It also highlighted the need for risk assessments covering not just underlying assets but the contracts, bridges and lending protocols built around them.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.