Tokenized financial assets are rapidly opening up fresh trading opportunities across global capital markets, yet the accelerating wave of real-world assets (RWAs) being brought onchain has yet to be matched by commensurate investor demand. According to Alex Taaffe, chief revenue officer at prominent crypto trading firm GSR, this structural imbalance is shaping up to be one of the defining bottlenecks for the burgeoning sector.
Speaking during a high-level panel discussion dedicated to liquidity and market fragmentation at the CONNECT by Cointelegraph: Singapore Edition on Oct. 9, Taaffe detailed how market mechanics are evolving. He noted that liquidity conditions are visibly improving for pre-IPO stocks, global equities, and commodities—assets that historically remained out of reach or poorly accessible to everyday market participants. At the same time, however, he emphasized that the appetite for fully tokenized RWAs has failed to keep pace with the sheer volume of assets being issued into the blockchain ecosystem.
The event brought together an international roster of Web3 founders, institutional investors, and senior industry executives for a series of four comprehensive panel discussions. These sessions tackled pressing structural topics, ranging from the evolution of tokenization and stablecoin payment systems to next-generation onchain trading infrastructure and venture capital exit strategies, alongside a competitive startup pitch showcase.
Delving deeper into the structural dynamics of the tokenized economy, Taaffe pointed out that the mismatch is particularly acute in specific segments of the market. Specifically regarding real-world assets and fully tokenized instruments, he explained that a clear supply and demand imbalance persists because a vast number of asset managers and corporate issuers are aggressively pushing to conduct capital formation directly onchain.
This relentless drive toward tokenization by institutional issuers, combined with a proliferation of distinct blockchains and Layer-2 networks, has inadvertently exacerbated liquidity fragmentation across tokenized markets. Instead of consolidating into deep, unified pools of capital, trading volume and liquidity are increasingly scattered across disparate ecosystems.
Lingling Jiang, a partner at DWF Labs, echoed these concerns during the discussions, agreeing that fragmentation remains a stubborn structural challenge for the industry. Jiang noted that the problem is particularly pronounced when multiple different issuers tokenize the exact same underlying asset class, effectively creating isolated liquidity pools that hinder optimal price discovery and efficient capital allocation. Despite these hurdles, Jiang acknowledged that broader cryptocurrency market liquidity has improved significantly over recent years, even as the digital asset industry continues to grapple with systemic growing pains.
The discussions on tokenization closely followed recent market milestones, underscored by the performance of prominent financial platforms such as Securitize, whose stock saw a notable upward surge of over 10% following the strategic launch of tokenized United States equities on the Solana blockchain.
Stablecoin Adoption Hinges on Everyday Payments and User Experience
Moving from asset tokenization to the realm of digital currency rails, the panel titled “Stablecoins at the Point of Sale: Cards, Wallets and the Race for Everyday Spend” shifted the focus toward practical adoption and consumer utility. Mike Silagadze, the founder and CEO of ether.fi, argued that while stablecoins have undeniably revolutionized cross-border money movement and institutional settlement, their broader mainstream adoption ultimately depends on a fundamental shift: whether everyday consumers can seamlessly utilize them for routine, day-to-day living expenses.
To illustrate this ongoing friction, Silagadze pointed to advanced financial hubs like Singapore. In such environments, a tech-savvy consumer might easily hold digital dollars such as USDC in a self-custody or fintech wallet, yet they are still forced to rely on traditional fiat currency to pay monthly utility bills, buy groceries, or cover local transit costs. This disconnect neatly encapsulates the persistent gap separating sophisticated blockchain payment infrastructure from truly frictionless everyday financial services.
Weighing in on the consumer perspective, Yvonne Chia, head of communications at USDD, stressed that stablecoin issuers must anchor their product strategies in the lived experience of the end user. According to Chia, creating a frictionless user experience is the paramount objective for developers and issuers alike. The ultimate strategic direction for the industry, she noted, is to make acquiring, holding, and spending stablecoins so effortless that it never actively crosses the consumer’s mind that they are utilizing blockchain technology, transforming it instead into an invisible, regular component of daily life.
Echoing this sentiment, Silagadze reiterated that the primary reason stablecoins remain underutilized for everyday retail purchases in many parts of the world is simply that they fail to plug seamlessly into normal human routines and local point-of-sale infrastructure.
Beyond user experience hurdles, the regulatory landscape continues to present formidable challenges for payment providers. Ilya Podoynitsyn, co-founder and CEO of FinHarbor, highlighted that companies operating in the stablecoin space must continuously navigate a complex, highly fragmented web of regulations that differ significantly across global jurisdictions. These divergent legal frameworks force compliance-driven fintechs to constantly adapt their underlying technical infrastructure and risk-monitoring systems to meet the specific demands of individual regional markets.
Adding to the industry perspective, Ashna Vaghela, chief customer officer at digital asset payments provider Mercuryo, emphasized that stablecoin payment flows should eventually become as straightforward and ubiquitous as using established mobile wallet solutions like Apple Pay, enabling users to complete complex cross-border transactions without ever leaving a familiar software application. The ultimate goal, Vaghela suggested, is total invisibility.
These debates unfolded against a broader macroeconomic backdrop where the global stablecoin market capitalization hovered around $306 billion, reflecting a modest year-over-year increase of roughly 2% following an extraordinary growth phase of about 74% during the preceding 12-month cycle.
Onchain Trading Faces Liquidity Fragmentation and Risk Management Challenges
As digital asset markets mature, decentralized trading venues and crypto trading desks continue to confront operational hurdles regarding how to accurately identify available liquidity across a fractured multi-chain landscape while effectively mitigating complex counterparty risks. These themes took center stage during the panel focused on what remains missing in the onchain trading stack.
Austin Federa, co-founder of DoubleZero, pointed out that transferring liquidity dynamically between separate blockchain networks remains significantly more difficult and cumbersome than in legacy financial markets. Describing the core structural issue, Federa noted that fragmentation goes far beyond a mere execution hurdle, framing it fundamentally as a data problem. He explained that it is surprisingly difficult for market participants to ascertain precisely how much liquidity genuinely exists onchain at any given moment.
On the risk management front, Miguel Morel, founder and CEO of blockchain intelligence firm Arkham Intelligence, highlighted how modern trading firms can leverage transparent onchain analytics to better assess counterparty risk. This is particularly crucial in rapidly growing sectors like prediction markets, where certain institutional or well-funded participants may hold distinct informational advantages over retail traders.
By utilizing granular blockchain data to understand who sits on the other side of a trade and adjusting risk parameters accordingly, Morel explained that market makers can safely offer tighter spreads, ultimately resulting in more competitive pricing for end customers. Furthermore, Morel noted that the same public blockchain analytics tools can assist exchanges in evaluating incoming customer deposits by identifying the precise historical origin of funds. This capability streamlines regulatory compliance decisions without forcing platforms to rely solely on invasive manual onboarding procedures. Without needing to ask for a passport right away, platforms can trace where incoming deposits originate and use that intelligence to determine whether to instantly clear funds for trading or route them through secondary compliance reviews.
Crypto Investors Face Tougher Exits as Markets Mature
In addition to trading and payments, persistent liquidity constraints have significantly complicated exit strategies and capital returns for crypto venture capital investors. This shift was dissected during the panel titled “The Exit Problem: How Investors Get Their Money Back.”
Pulkit Gupta of Nomad Capital observed that liquidity conditions within broader altcoin markets have remained remarkably constrained over recent quarters, with the vast majority of active capital heavily concentrated within large-cap cryptocurrencies. For alternative tokens and early-stage project equity, Gupta admitted that securing clean exits has proven exceptionally difficult for institutional backers, despite Nomad Capital’s extensive portfolio of crypto projects featuring publicly traded tokens such as Movement, Solayer, and Berachain.
Reflecting a broader industry-wide realignment toward long-term fundamentals, Sonia Shaw, CEO of OneAsset, emphasized that the digital asset market has matured past the speculative fervor of previous cycles. Modern startups are now required by the market to demonstrate robust, sustainable business models rather than relying on narrative-driven hype. Comparing current market realities to past expectations, Shaw recalled an era when some investors routinely anticipated full liquidity exits within a mere six months, asserting that such short-term horizons no longer reflect the operational reality of the ecosystem. Shaw characterized this evolution away from rapid, speculative exits as a healthy and positive indicator of structural market maturity.
Meanwhile, Aleksandr Nechaev, a partner at Funders VC, drew attention to the unique operational challenges posed by the blistering pace of product and market evolution in the Web3 space. The extreme velocity of technological and economic change places the expertise, adaptability, and resilience of founding teams at the very center of investment decision-making. These critical questions surrounding adaptability and how founding teams navigate continuous market uncertainty were further explored during the event’s dedicated startup pitch competition, powered by Funders VC, bringing the day’s overarching discussions on maturity, infrastructure, and sustainability to a close.
Crypto Startups & Venture Capital
Crypto Startups & Venture Capital
Crypto Startups & Venture Capital
