Tokenized assets lack liquidity? An in-depth analysis of the liquidity challenges of stock tokens

Since 2026, tokenized U.S. stocks have been rapidly becoming one of the most watched tracks in the crypto industry. From the continuous emergence of on-chain stock trading platforms, to mainstream exchanges such as Gate rolling out built-in U.S. stock trading features, and then to global regulatory frameworks gradually becoming clearer, tokenized stocks have evolved from a fringe idea into the most explosive growth direction across the entire RWA (real-world assets) sector.

According to QYResearch, the global stock tokenization market size was approximately $1.35 billion in 2025, and is expected to reach $2.576 billion by 2032, with a CAGR of 9.8%. However, behind this wave of hype, a core issue that cannot be ignored is coming into view—whether the liquidity of the tokenized stock market is sufficient to support these growth expectations.

Slippage Dilemma: The High Hidden Costs of Tokenized Assets

The first hidden cost of tokenized assets is reflected in trading slippage.

Taking tokenized gold as an example, on major centralized exchanges, the slippage on the perpetual contracts for PAXG and XAUT rises exponentially as trade size increases. When the notional trading value is about $4 million, slippage is already close to 150 basis points; whereas in traditional markets (such as CME gold futures), slippage at the same scale is nearly negligible. The liquidity depth gap between the two can reach several orders of magnitude.

Tokenized stocks face a similar dilemma. High-slippage issues are common in tokenized stock products such as TSLAx and NVDAx, and their liquidity is far inferior to that of traditional securities markets. Because the tokenized asset market lacks sufficient depth, the order book limits that can provide effective liquidity on both sides are extremely limited— even when choosing the trading venues with the best liquidity, the effective depth often falls short of $3 million.

Structural Flaws: The Dual Bottlenecks of Minting and Redemption

Insufficient liquidity is not accidental; it stems from deep structural factors.

Tokenized assets commonly suffer from structural flaws such as high minting costs, long redemption cycles (T+1 to T+5), and low capital efficiency for market makers. This means:

• High minting threshold: On-chain issuance of tokenized assets requires pre-locking the underlying assets, involving multiple legal and custody processes, with costs far higher than deploying native crypto assets.
• Long redemption cycles: Redeeming on-chain tokens into underlying fiat currency or physical assets usually takes 1 to 5 business days, meaning capital cannot exit quickly.
• Low willingness of market makers: Due to an imprecise redemption mechanism and low capital efficiency, market makers are more inclined to allocate funds to other crypto markets with stronger liquidity and easier exits.

These structural flaws directly lead to a shortage of liquidity providers, which in turn traps the tokenized assets market in a vicious cycle of “insufficient liquidity → reduced participation → even less liquidity.” When market depth is inadequate, investors cannot build large-scale positions; when exits are unreliable, assets struggle to become qualified collateral for on-chain lending systems.

Regulatory Uncertainty and Fragmentation: Invisible Friction Against Liquidity

Liquidity issues for tokenized stocks are also deeply influenced by regulatory factors.

Stocks are financial assets subject to strict regulation. Different countries and regions impose different rules for securities issuance, trading, and custody. Once stocks are represented in token form and enter blockchain networks, their legal characterization may allow for new interpretations: some jurisdictions treat them as digital securities and require compliance with securities regulations, while other regions have not yet established a clear regulatory framework.

This lack of uniformity in global regulatory standards directly affects the cross-border circulation and trading activity of tokenized stocks. Compliance costs for investors and institutional participants rise, and market makers’ cross-regional activities are constrained, further compressing the market’s effective depth.

The Market Maker Dilemma: Why Is On-Chain Liquidity Hard to Build?

Market makers are the cornerstone of any liquid market, but in the tokenized stock space, their role has yet to be fully realized for a long time.

On one hand, the tokenized stock market is still relatively small. Large-scale market maker participation requires sufficient trading volume to reach break-even. Currently, the month-over-month trading volume of tokenized public stocks has already surpassed $800 million, and some months have reached $1 billion, but compared with traditional stock markets that can see daily trading volumes in the trillions of dollars, the gap remains enormous.

On the other hand, market makers face higher risk exposure and hedging costs on-chain than in traditional markets. The pricing of tokenized stocks needs to map underlying stock prices in real time, but fluctuations between on-chain and off-chain price gaps, oracle data delays, and uncertainties around cross-market arbitrage all increase market makers’ risk exposure. The core problem with tokenized assets is not technical—it is the lack of market fundamentals that can support large-scale liquidity.

Infrastructure Progress: The Liquidity Breakthrough Is Underway

Despite numerous challenges, the market is not standing still. Structural solutions to liquidity issues are being advanced.

On-chain liquidity innovation: Uniswap Labs and Securitize reached a strategic partnership to integrate BlackRock’s tokenized fund BUIDL into UniswapX for on-chain trading, unlocking near-instant liquidity for BUIDL holders. The BUIDL fund currently has assets of about $2.3 billion, and has become a benchmark product in the tokenized fund sector.

Institutional-grade liquidity infrastructure: Securitize and Grove jointly launched the Basin protocol, with an initial goal of supporting up to $1 billion in daily liquidity, providing tokenized funds with a near-instant stablecoin liquidity channel. BlackRock has participated as a key early launch partner, reflecting top asset managers’ confidence in on-chain liquidity solutions.

Exchange-level depth building: In the forefront of tokenized finance exploration, exchanges also play a critical role. CryptoQuant’s research report shows that, with tokenized stocks, metals, index products, and a 24/7 derivatives trading system, Gate has performed exceptionally well across core indicators including institutional trading activity, market liquidity, and TradFi derivatives trading. In March this year, Gate’s single-month TradFi perpetual contract trading volume at one point approached $290 billion, setting an industry-leading level.

In addition, Gate launched real stock trading services. Users can directly trade with USDT more than 10,000 mainstream U.S. stocks and ETF assets, connecting crypto users more closely to traditional financial markets through integration with compliant institutions holding U.S. brokerage licenses. In early June 2026, Gate’s daily stock trading volume surged to nearly $30 million, reaching the highest activity level in recent months.

Summary

The liquidity problem of tokenized stocks is, in essence, the growing pains that an emerging asset class inevitably faces before its market infrastructure is fully built. Four pillars make up the current liquidity challenges in the RWA track: persistently high slippage, long redemption cycles, insufficient market maker participation, and global regulatory fragmentation.

What’s worth noting, however, is that the engine of change has already started. From the new liquidity pipelines for tokenized funds driven by BlackRock, to ongoing iterations of on-chain market-making infrastructure, and to exchanges such as Gate building a dual-track system covering both tokenized stock trading and real stock trading, every piece of the puzzle for improving liquidity is gradually falling into place.

For investors, understanding these structural challenges is essential not only for risk mitigation, but also for seizing opportunities amid the tokenization wave. When liquidity barriers are gradually broken through one by one, a truly open global asset trading ecosystem will arrive in its era.