Supply-Demand Mismatch and Liquidity Fragmentation Challenge Tokenized Assets, Industry Leaders Warn

Tokenized financial assets are rapidly opening up fresh trading opportunities across global markets, yet the accelerating wave of real-world assets (RWAs) being brought onchain continues to outpace actual investor demand. This core structural imbalance was a central theme of discussion among senior industry executives at the recent CONNECT by Cointelegraph: Singapore Edition event, held on October 9.

Gathering Web3 founders, venture capitalists, and market executives for a series of high-level panel discussions, the conference addressed critical developments across tokenization, stablecoin payments, onchain trading infrastructure, and venture capital liquidity. While technological frameworks are evolving to support a wider array of financial instruments, industry leaders pointed out that the current macroeconomic and structural realities of onchain markets present distinct hurdles that must be addressed for the sector to achieve sustainable maturation.

Speaking during a panel dedicated to liquidity and market fragmentation, Alex Taaffe, chief revenue officer at prominent crypto trading firm GSR, highlighted the stark differences between various classes of onchain assets. According to Taaffe, trading liquidity has noticeably improved across sectors like pre-IPO stocks, global equities, and commodities—traditional asset classes that retail and institutional investors previously struggled to access efficiently.

However, Taaffe cautioned that the market for fully tokenized real-world assets tells a different story. The rate at which new assets are being issued is vastly outstripping current buy-side interest.

“Specifically on RWAs, and fully tokenized assets, there’s a supply and demand imbalance. There’s a ton of supply. Every asset manager issuer wants to do capital formation onchain,” Taaffe explained to attendees.

He further noted that the proliferation of diverse asset issuers, coupled with an expanding array of blockchains, has severely fractured liquidity across these nascent tokenized markets. Rather than concentrating capital in deep, efficient pools, issuance is frequently scattered across disparate networks and protocols.

Lingling Jiang, a partner at DWF Labs, echoed these concerns regarding market fragmentation. Jiang pointed out that the structural challenge is particularly acute when multiple distinct issuers choose to tokenize the exact same underlying asset, inadvertently creating isolated liquidity pools that hinder efficient price discovery and smooth trading. Despite these hurdles, Jiang acknowledged that overall cryptocurrency liquidity has expanded significantly over recent years, even as the industry continues to work through its remaining operational and structural growing pains.

Stablecoin Adoption Hinges on Everyday Payments

Moving from asset tokenization to currency infrastructure, the conference’s panel titled “Stablecoins at the Point of Sale: Cards, Wallets and the Race for Everyday Spend” tackled the ongoing friction preventing mainstream consumer adoption. While stablecoins have firmly established themselves as powerful tools for fast, cost-effective cross-border settlements, panelists emphasized that broader utilization ultimately depends on practical, everyday utility.

Mike Silagadze, founder and CEO of ether.fi, highlighted the disconnect between current blockchain payment infrastructure and routine consumer financial behaviors. Pointing to tech-forward financial hubs like Singapore, Silagadze observed that a consumer might hold digital dollars such as USDC in a Web3 wallet, yet they still require traditional local fiat currency to pay routine utility bills and daily expenses.

“The reason no one uses stablecoins in many parts of the world is because it just doesn’t plug into your day-to-day life,” Silagadze stated.

Echoing this user-centric perspective, Yvonne Chia, head of communications at USDD, argued that effective stablecoin issuance must prioritize the consumer experience above all else. The ultimate goal, according to Chia, is to build financial pathways so seamless that users do not even realize they are leveraging blockchain technology during a transaction.

“That’s the kind of direction that we want to move in, to make it as easy as possible for the user to have stablecoins, use stablecoins, to the point where it doesn’t cross their mind that they are using a stablecoin. It’s just a regular part of their lives,” Chia said.

Beyond user experience, regulatory compliance remains a formidable barrier. Ilya Podoynitsyn, co-founder and CEO of FinHarbor, explained that payment providers and infrastructure developers must constantly navigate a complex patchwork of rules that vary widely from one jurisdiction to another. This regulatory fragmentation forces firms to continuously adapt their technical and compliance systems to satisfy local legal requirements.

Ashna Vaghela, chief customer officer at crypto payments provider Mercuryo, suggested that the industry should aspire to make stablecoin transactions as frictionless as mainstream mobile payment solutions like Apple Pay, enabling users to complete purchases effortlessly within existing digital environments without complex manual interventions.

“I think that’s the whole point, to be invisible,” Vaghela remarked.

These discussions unfolded against a backdrop of steady macroeconomic growth for the sector, with total stablecoin market capitalization standing at approximately $306 billion—representing a modest year-over-year increase of about 2% following a remarkable 74% surge over the preceding 12-month period.

Onchain Trading Faces Liquidity Fragmentation and Risk Management Challenges

As digital asset markets continue to evolve into 2026, crypto trading platforms are grappling with complex hurdles regarding how to accurately map available liquidity across a multi-chain ecosystem while simultaneously managing sophisticated counterparty risks. These themes took center stage during the panel titled “What’s Still Missing in the Onchain Trading Stack in 2026.”

Austin Federa, co-founder of DoubleZero, noted that routing liquidity seamlessly between disparate blockchain networks remains far more difficult than in traditional, legacy financial markets. Describing the core obstacle, Federa explained that fragmentation is not simply an execution hurdle, but a fundamental data problem. He added that it is surprisingly difficult for market participants to determine precisely how much liquidity genuinely exists onchain at any given moment.

From a risk management perspective, Miguel Morel, founder and CEO of blockchain analytics firm Arkham Intelligence, highlighted how trading firms can leverage transparent onchain data to evaluate counterparty exposure. This capability is especially critical within prediction markets and decentralized exchanges, where certain market participants may hold informational advantages over others.

“If you know who’s on the other side and you’re taking less risk, you can offer a tighter spread,” Morel said, pointing out that enhanced transparency ultimately translates to better pricing for everyday consumers.

Furthermore, Morel explained that the exact same foundational blockchain data can assist exchanges in evaluating customer deposits, enabling compliance teams to trace the historical origin of funds without resorting to intrusive personal data collection like passport checks. According to Morel, exchanges can utilize this data-driven insight to instantly determine whether to permit trading activity with deposited funds or route them for secondary compliance reviews.

Crypto Investors Face Tougher Exits as Markets Mature

The broader maturation of digital asset markets has also introduced new complexities for early-stage backers, with liquidity bottlenecks complicating traditional exit strategies for venture capital investors. Panelists exploring “The Exit Problem: How Investors Get Their Money Back” discussed how shifting market dynamics have fundamentally altered the venture capital landscape.

Pulkit Gupta of Nomad Capital noted that crypto market liquidity has experienced notable constraints, with capital remaining heavily concentrated within the largest, most established digital assets. For early-stage funds holding portfolios of alternative tokens, realizing profitable exits has become a considerably more demanding task.

“For me, on the altcoins, it has been really tough for us to get an exit,” Gupta admitted, noting that his firm has historically backed prominent projects with publicly traded tokens, including Movement, Solayer, and Berachain.

Sonia Shaw, CEO of OneAsset, viewed this shift toward more rigorous market conditions as a natural and ultimately healthy sign of industry maturation. Reflecting on past market cycles where investors routinely expected rapid liquidity within months, Shaw asserted that the ecosystem has evolved to demand much stronger underlying business fundamentals from startups.

“I don’t think the market’s like that anymore,” Shaw said, framing the transition away from speculative, short-term expectations as a positive step forward for sustainable innovation.

Concluding the discussions on venture dynamics, Aleksandr Nechaev, partner at Funders VC, emphasized that the breathtaking speed of transformation across both products and markets places an immense premium on the expertise and adaptability of founding teams, factors that now drive the vast majority of modern investment decisions.