Tokenized assets are rapidly opening new trading opportunities across global financial markets, but the burgeoning supply of real-world assets (RWAs) being brought onchain has yet to be matched by commensurate investor demand. This disconnect was highlighted by Alex Taaffe, chief revenue officer at digital asset trading firm GSR, during a high-level discussion on liquidity and market fragmentation.
Speaking at the CONNECT by Cointelegraph: Singapore Edition event on Oct. 9, Taaffe pointed out that while liquidity is visibly improving in sectors like pre-IPO stocks, commodities, and global equities—asset classes that previously offered investors very limited access—the overarching appetite for fully tokenized real-world assets has simply not kept pace with the sheer volume of issuance flooding the market.
The event successfully brought together a wide array of Web3 founders, institutional investors, and senior industry executives for a comprehensive series of panel discussions. The conversations tackled complex topics including the evolution of tokenization, the practicalities of stablecoin payments, the robustness of onchain trading infrastructure, and venture capital exit strategies, alongside a competitive pitch showcase for emerging startups.
Delving deeper into the structural dynamics of tokenization, Taaffe emphasized that the primary bottleneck lies in market calibration. Specifically regarding real-world assets and fully tokenized instruments, he noted a pronounced supply and demand imbalance. Every asset manager and issuer currently seems eager to conduct capital formation directly onchain, creating a massive influx of supply that outstrips current institutional and retail absorption capacities.
Furthermore, Taaffe explained that this proliferation of new asset issuers, combined with the expanding multi-chain ecosystem, has severely fragmented liquidity across tokenized markets. Instead of consolidating into deep, unified pools of capital, trading volume is spread thinly across numerous networks and platforms.
Lingling Jiang, a partner at DWF Labs, echoed these concerns during the panel, agreeing that fragmentation remains one of the most stubborn hurdles facing the industry. She noted that the problem is exacerbated when multiple different issuers tokenize the exact same underlying asset, inadvertently fracturing liquidity into separate, isolated pools rather than fostering a centralized marketplace. Despite these persistent challenges, Jiang acknowledged that general cryptocurrency liquidity has improved significantly over recent years, even as the ecosystem continues to confront structural inefficiencies.
Stablecoin Adoption Hinges on Everyday Payments and Infrastructure
The dialogue surrounding digital currencies shifted toward practical utility during the panel titled "Stablecoins at the Point of Sale: Cards, Wallets and the Race for Everyday Spend." Mike Silagadze, the founder and CEO of ether.fi, argued that while stablecoins have undeniably revolutionized cross-border capital movement and settlement efficiency, their broader, mainstream adoption ultimately hinges on a fundamental consumer requirement: the ability to seamlessly use them for mundane, everyday expenses.
Silagadze drew attention to regions like Singapore, where tech-savvy consumers might hold digital dollars like USDC in their digital wallets, yet are still forced to rely on traditional local fiat currency to pay routine bills and retail purchases. This glaring friction illustrates the persistent gap separating high-speed blockchain payment infrastructure from deeply entrenched everyday financial services.
Weighing in from an issuer’s perspective, Yvonne Chia, head of communications at USDD, emphasized that placing the user’s perspective at the center of product development is paramount. She noted that user experience must remain the guiding compass for the industry. The ultimate direction stablecoin developers want to move toward is creating an environment where holding and spending stablecoins is so frictionless that it entirely escapes the user’s conscious thought, integrating seamlessly into daily life like any traditional payment method.
Silagadze reinforced this sentiment, asserting that the primary reason stablecoins remain underutilized for daily commerce in many parts of the world is simply because they fail to plug directly into the fabric of daily routines.
Beyond consumer-facing usability hurdles, regulatory complexities continue to pose significant operational barriers. Ilya Podoynitsyn, co-founder and CEO of FinHarbor, pointed out that service providers must expertly navigate a patchwork of regulations that vary wildly from one jurisdiction to another. This regulatory fragmentation forces companies to constantly adapt their underlying infrastructure and compliance frameworks to meet the bespoke demands of individual markets.
Adding to the operational perspective, Ashna Vaghela, chief customer officer at crypto payments provider Mercuryo, argued that stablecoin transactions should eventually match the absolute simplicity of established systems like Apple Pay, enabling users to complete complex financial transfers without ever leaving an application interface. The ultimate objective, according to Vaghela, is total invisibility, where the underlying blockchain technology recedes entirely into the background.
These conversations unfolded against a backdrop of massive macroeconomic growth for the sector, with the total stablecoin market capitalization hovering around $306 billion. While this represented a modest year-over-year increase of about 2%, it followed an explosive previous 12-month period that saw the market surge by roughly 74%.
Onchain Trading Faces Liquidity Fragmentation and Risk Management Challenges
As digital asset markets mature, trading platforms continue to grapple with structural difficulties in accurately identifying available liquidity scattered across disparate blockchain networks, alongside the constant challenge of managing sophisticated counterparty risks. These issues took center stage during the panel session examining what elements are still missing from the onchain trading stack.
Austin Federa, co-founder of DoubleZero, explained that shifting liquidity across modern blockchain networks remains significantly more cumbersome than moving capital within legacy financial systems. He characterized the current state of the industry by noting that fragmentation is not merely an execution problem, but fundamentally a data problem. It remains remarkably difficult for market participants to calculate precisely how much genuine liquidity actually exists onchain at any given moment.
On the critical front of risk management, Miguel Morel, founder and CEO of blockchain analytics firm Arkham Intelligence, highlighted how trading firms can leverage transparent onchain data to rigorously assess counterparty risks. This capability is especially vital in emerging sectors like prediction markets, where certain sophisticated participants frequently maintain informational advantages over others.
Morel explained that knowing the precise identity or historical behavior of a counterparty allows market makers to take on reduced risk, which in turn enables them to offer tighter spreads and ultimately deliver better pricing to everyday customers. Furthermore, Morel pointed out that this exact same transparent blockchain data can assist centralized and decentralized exchanges alike in evaluating customer deposits, determining the precise origin of funds, and streamlining internal compliance protocols. Without needing to demand traditional identification documents like a passport, platforms can analyze where incoming deposits originate and make informed decisions on whether to permit immediate trading or route funds for deeper compliance review.
Crypto Investors Face Tougher Exits as Markets Mature
The maturation of the digital asset economy has inevitably introduced new complexities for venture capital investors, particularly regarding how early-stage backers successfully realize returns on their investments. During the panel dedicated to exploring the persistent exit problem in crypto, industry veterans discussed the shifting dynamics of capital return.
Pulkit Gupta of Nomad Capital observed that liquidity across broader crypto markets had been notably constrained over a sustained multi-month window, with the vast majority of active capital heavily concentrated within the largest, most established cryptocurrencies. For alternative tokens and smaller projects, Gupta noted that securing viable exit pathways has proven exceptionally difficult. His venture firm has previously backed several prominent crypto initiatives featuring publicly traded tokens, including Movement, Solayer, and Berachain.
Echoing this necessary evolution toward longer-term, more disciplined investment horizons, Sonia Shaw, CEO of OneAsset, argued that the broader market has fundamentally matured, forcing early-stage startups to demonstrate much stronger, sustainable business fundamentals rather than relying solely on speculative momentum. Reflecting on past market cycles where investors routinely expected rapid liquidity within compressed timeframes, Shaw asserted that the industry environment has permanently changed for the better.
Aleksandr Nechaev, partner at Funders VC, further emphasized the unique operational hurdles introduced by the breakneck speed of change impacting both underlying products and broader market structures. He explained that this rapid pace of evolution places the expertise, adaptability, and resilience of founders at the very center of all sound investment decisions.
Crypto Startups & Venture Capital
Crypto Startups & Venture Capital
Crypto Startups & Venture Capital
