CONNECT Recap: Liquidity Remains Tokenization’s Key Bottleneck

Tokenization is expanding quickly beyond crypto-native assets—yet traders and investors are still catching up to the pace at which new real-world asset (RWA) markets are being launched, according to remarks made at Cointelegraph’s CONNECT by Cointelegraph: Singapore Edition on Oct. 9.

Speaking on panels focused on liquidity, stablecoin payments, and the future of onchain trading infrastructure, industry leaders described a core mismatch: supply of tokenized assets is growing faster than demand, while trading venues face persistent challenges around liquidity fragmentation, data transparency, and risk management.

Key takeaways

• Executives say tokenized RWA issuance is outpacing investor demand, creating a supply-and-demand imbalance in fully tokenized markets.
• Liquidity fragmentation is worsening as more issuers tokenize similar underlying assets into separate pools.
• Stablecoin adoption depends on day-to-day usability and smooth integration with consumer payment flows—not just cross-border transfer convenience.
• Onchain trading infrastructure still struggles with identifying where liquidity truly sits across networks and managing counterparty risk using onchain data.
• As crypto markets mature, exits for venture-backed projects may take longer, particularly for liquidity outside the largest tokens.

RWA tokenization grows faster than trading demand

Alex Taaffe, chief revenue officer at crypto trading firm GSR, argued that liquidity is improving for tokenized instruments such as pre-IPO stocks, commodities, and global equities—assets that previously had limited access for many participants. Still, he said the market’s fundamentals for fully tokenized RWAs have not matched the rate of new issuance.

Taaffe said the challenge is structural: “there’s a supply and demand inbalance,” noting that asset managers and issuers are actively seeking “capital formation onchain.” In his view, the number of tokenized offerings and the number of blockchains they run on can fragment liquidity further, reducing efficiency for traders who need deep and consistent order books.

In response to that dynamic, Lingling Jiang, partner at DWF Labs, highlighted how fragmentation can become particularly acute when multiple issuers tokenize the same underlying asset but each create distinct liquidity pools. That setup can dilute trading activity and make it harder for market participants to find enough depth where they need it.

Jiang also emphasized that crypto liquidity has improved significantly over recent years, even if the industry still has substantial work ahead in aligning liquidity and product development across venues.

Stablecoin payments: moving beyond transfers

Another panel, “Stablecoins at the Point of Sale: Cards, Wallets and the Race for Everyday Spend,” shifted the focus from market structure to consumer experience. Mike Silagadze, founder and CEO of ether.fi, said stablecoins can simplify moving money across borders, but widespread adoption will hinge on whether consumers can use them for everyday purchases.

Silagadze pointed to Singapore as an example of a common friction point: even if people hold USDC, they may still need local currency to pay bills. In other words, payment rails built for blockchain transfers are not automatically the same as mainstream financial services that fit into daily life.

Yvonne Chia, head of communications at USDD, argued that stablecoin products should be designed around the user’s perspective. She said “the most important thing for you is the user experience,” describing an aim to make stablecoin use feel ordinary—something that “doesn’t cross their mind” that they are using a stablecoin.

Silagadze reinforced that the problem is integration rather than technology alone, warning that stablecoins don’t see broad usage in many regions because they “just doesn’t plug into your day-to-day life.”

Regulation remains another constraint. Ilya Podoynitsyn, co-founder and CEO of FinHarbor, said providers have to adapt infrastructure and compliance systems across jurisdictions, which can slow deployment and increase operational complexity.

Ashna Vaghela, chief customer officer at crypto payments provider Mercuryo, framed the target experience as “invisible” payments—transactions that work seamlessly within familiar applications, comparable to using Apple Pay.

Market adoption context also featured in the discussion: stablecoin market capitalization stood at $306 billion, up about 2% year over year after rising roughly 74% in the prior 12 months, according to DefiLlama data referenced during the event.

Onchain trading infrastructure needs better visibility and risk controls

Panelists discussing “What’s Still Missing in the Onchain Trading Stack in 2026” described a set of practical hurdles that traders and platforms still face even as onchain markets expand.

Austin Federa, co-founder of DoubleZero, said moving liquidity between blockchain networks remains harder than in traditional financial markets. He described fragmentation as not just a trading execution issue, but also a data problem—adding that it is “very hard to figure out how much liquidity truly exists onchain.”

On the risk management side, Miguel Morel, founder and CEO of Arkham Intelligence, argued that onchain data can help firms assess counterparty risk. He pointed to prediction markets as an area where knowledge about who is on the other side can influence risk pricing. Morel suggested that better visibility can enable tighter spreads, which may translate into improved customer pricing.

Morel also said blockchain analytics can support compliance decisions for exchanges by helping assess the provenance of customer deposits. He described a workflow where exchanges can determine where funds originate and decide whether to allow trading or route deposits for compliance review—framing the advantage as gaining insight without requiring customers to provide a passport.

VC exits become harder as liquidity concentrates

Liquidity constraints have also affected how crypto venture capital can realize returns. On the panel “The Exit Problem: How Investors Get Their Money Back,” Pulkit Gupta of Nomad Capital said liquidity has been particularly weak over the past three months, with more depth concentrated in larger cryptocurrencies.

Gupta noted that exiting altcoin positions has been “really tough,” describing the practical challenge of finding enough liquidity to unwind positions at favorable terms.

Sonia Shaw, CEO of OneAsset, connected this to a broader shift in investor expectations. She recalled an investor who expected an exit within six months and said that view no longer fits today’s market reality. Shaw characterized slower, longer-term timelines as a sign of maturation rather than a purely negative development.

Aleksandr Nechaev, partner at Funders VC, added that the speed of change in crypto can shape investment decisions, since founders’ expertise and how teams navigate uncertainty become central to what investors are betting on. The event also referenced a pitch competition later in the day powered by Funders VC, underscoring that market transitions remain a theme across the ecosystem.

For market participants, the next test will be whether issuers can align tokenized RWA supply with real demand and whether exchanges and trading platforms can reduce fragmentation through better onchain liquidity visibility and risk tooling—especially as stablecoin payments push further toward “invisible” consumer experiences.