Tokenized is not liquid: closing the RWA secondary-market gap

Tokenized US treasuries and money market funds are the success story of real-world assets onchain. CoinGecko's 2026 report put tokenized treasuries near $13 billion, roughly triple the start of 2025, and rwa.xyz's tracking has since shown more. BlackRock's BUIDL alone holds billions.

Yet the promise of tokenization was not only faster issuance. It was liquidity: assets that trade around the clock, settle in seconds and plug into onchain markets. On that, the record is thin.

The problem: built to mint and redeem, not to trade

Academic work on RWA markets has found that many tokens trade in thin markets, and industry analyses estimate that a large share of tokenized value sits idle, moving only when an investor subscribes or redeems with the issuer. The causes are design choices:

• Transfer restrictions without a shared identity layer. A security token can only move to approved holders. If each issuer keeps its own allowlist, two approved investors at different platforms cannot trade.
• Settlement mismatch. The token settles in seconds; the fund behind it settles daily or slower. Without a buffer, an onchain buyer or seller still waits.
• No price the market trusts. Without a regularly published NAV that contracts can read, market makers cannot quote tight spreads.
• No integrations. A token that no lending market or exchange accepts as collateral has nowhere to go.

The proposal: design for the secondary market

1. 01Permissioned tokens with portable identity. Standards such as ERC-3643 enforce transfer rules against onchain identity claims. When those claims come from KYC providers recognised across platforms, any two approved investors can trade directly.
2. 02Async redemption done properly. ERC-7540 extends the ERC-4626 vault standard with asynchronous deposits and redemptions, matching how the underlying fund settles, so integrators can handle it without custom code.
3. 03An instant-redemption buffer. Hold a stablecoin reserve, sized to typical outflows, to settle small redemptions immediately while larger ones queue.
4. 04NAV and reserve oracles. Publish valuations and reserve proofs onchain on a fixed schedule, so market makers and lenders can price the asset.
5. 05Pre-approved venues. Launch with at least one RFQ venue or permissioned pool and one lending integration, agreed before issuance rather than hoped for after.
6. 06Distributions handled in code. Record dates, payouts and forced transfers in the contract, with an audit trail, so holders on any venue are treated the same.

Where the law sets the limits

Most tokenized funds are securities, and the legal wrapper decides who may hold and trade them. Engineering cannot remove those limits; it can make sure the product does not add friction the law does not require. That work happens with counsel, early.

What to measure

• Secondary share. The share of token transfers that are holder to holder rather than mint or redeem.
• Time to cash. How long a holder waits from deciding to sell to holding stablecoins, small and large orders separately.
• Spread at size. The quoted spread for a meaningful order on your venues, against NAV.
• Integrations live. Lending markets and venues that accept the token, and the value they actually hold.

How we would start

Before choosing a chain, list who should be able to buy the token from whom, and how fast they need their money back. The design follows from that. This is the core of our RWA tokenization work, and it overlaps with stablecoin compliance whenever subscriptions settle in stablecoins.