Stellar (XLM) Sets Stage for Major Upgrades and Privacy Features

Stellar (XLM)'s Strategic Developments in 2025

The Stellar Development Foundation (SDF) has marked 2025 as a pivotal year with significant advancements in scalability and privacy. According to the Stellar blog, these efforts are part of a broader strategy to enhance the Stellar network's performance and adoption.

Technical Upgrades to Boost Performance

Throughout the year, Stellar protocol upgrades focused on scalability, leading to increased network speed and capacity. These enhancements resulted in a 95% climb in Total Value Locked (TVL), reaching over $179 million. Key upgrades included the introduction of parallelism in core processes, aggressive caching of ledger states, and a significant boost in transaction throughput to over 2000 transactions per second (TPS). The ultimate goal remains achieving 5000 TPS.

Whisk Protocol and Developer Benefits

The Whisk upgrade, or Protocol 23, stands out as the most significant protocol enhancement since the introduction of smart contracts. It includes eight transformative Core Advancement Proposals (CAPs) designed to streamline the development process on Stellar. These CAPs focus on reducing transaction costs, increasing throughput, and simplifying the building experience for developers. The upgrade paves the way for future developments anticipated in 2026 and beyond.

Privacy Innovations and Partnerships

In line with its commitment to privacy, SDF unveiled its privacy strategy at the Meridian 2025 conference. The foundation is focusing on creating a configurable and compliance-forward privacy infrastructure. This initiative includes partnerships with Nethermind for bridging Stellar and Wormhole, and integrating RISC Zero verifier support into Stellar smart contracts. These efforts aim to equip developers with the tools necessary to build privacy-enabled applications.

Next Steps: X-Ray Protocol and Privacy Solutions

The upcoming X-Ray Protocol (Protocol 25), scheduled for release on January 22, 2026, will introduce native support for zero-knowledge primitives such as BN254 and Poseidon. This upgrade aims to facilitate the development of configurable privacy applications. SDF's commitment to privacy is further evidenced by its involvement with the Confidential Token Association, working alongside projects such as OpenZeppelin and Inco to establish industry standards for confidential tokens.

Future Outlook

With these advancements, Stellar is poised to enhance its DeFi ecosystem, providing a clear path for scaling privacy-focused applications. The emphasis on privacy does not compromise the network's operational stability or compliance considerations, ensuring that both existing and future enterprises on Stellar can leverage these new features effectively.