Since 2026, tokenized US equities have been rapidly emerging as one of the most prominent sectors in the crypto industry. From the proliferation of on-chain stock trading platforms, to mainstream exchanges like Gate launching spot US stock trading features, and the gradual clarification of global regulatory frameworks, tokenized stocks have evolved from a fringe concept into the most explosive growth direction within the RWA (Real World Assets) sector.
According to QYResearch, the global market size for tokenized equities is expected to reach $1.35 billion in 2025, and grow to $2.576 billion by 2032, with a CAGR of 9.8%. However, behind this surge, a critical question is coming to the forefront—does the liquidity in the tokenized equity market truly support these growth expectations?
The Slippage Dilemma: Hidden Costs of Tokenized Assets
The first hidden cost of tokenized assets manifests in trading slippage.
Take tokenized gold as an example. On major centralized exchanges, the slippage for perpetual contracts of PAXG and XAUT increases exponentially as trade size grows. When the nominal trade amount reaches about $4 million, slippage approaches 150 basis points. In contrast, in traditional markets like CME gold futures, slippage for trades of the same size is virtually negligible. The difference in liquidity depth between the two can be several orders of magnitude.
Tokenized equities face similar challenges. High slippage is common for products like TSLAx and NVDAx, with liquidity far inferior to traditional securities markets. Due to insufficient market depth, the effective liquidity available on both sides of the order book is extremely limited—even at the most liquid venues, effective depth rarely exceeds $3 million.
Structural Deficiencies: Dual Bottlenecks in Minting and Redemption
Liquidity shortages are not coincidental; they stem from deep structural factors.
Tokenized assets typically face high minting costs, lengthy redemption cycles (T+1 to T+5), and low capital efficiency for market makers. This results in:
- High minting thresholds: On-chain issuance of tokenized assets requires pre-locking of underlying assets, involving multiple legal and custodial processes. The cost is much higher than deploying native crypto assets.
- Long redemption cycles: Redeeming on-chain tokens for underlying fiat or physical assets usually takes 1 to 5 business days, preventing rapid capital exit.
- Low market maker incentives: Due to inefficient redemption mechanisms and poor capital efficiency, market makers prefer allocating funds to more liquid and easily accessible crypto markets.
These structural flaws directly lead to a shortage of liquidity providers, trapping the tokenized asset market in a vicious cycle of "insufficient liquidity → reduced participation → even less liquidity." When market depth is lacking, investors cannot build sizable positions. When exits are unreliable, assets struggle to qualify as collateral in on-chain lending systems.
Regulatory Uncertainty and Fragmentation: Invisible Barriers to Liquidity
Liquidity issues for tokenized equities are also deeply affected by regulatory factors.
Stocks are strictly regulated financial assets, and different countries and regions have varying rules for securities issuance, trading, and custody. When stocks are tokenized and enter blockchain networks, their legal status may be reinterpreted: some jurisdictions treat them as digital securities requiring compliance with securities laws, while others lack clear regulatory frameworks.
This lack of global regulatory uniformity directly impacts cross-border circulation and trading activity for tokenized equities. Compliance costs for investors and institutions rise, and market makers face restrictions on cross-regional operations, further compressing effective market depth.
The Market Maker Challenge: Why Is On-Chain Liquidity So Hard to Build?
Market makers are the cornerstone of any liquid market, but their role in tokenized equities remains underdeveloped.
On one hand, the tokenized equity market is still relatively small. For market makers to commit significant capital, trading volumes must be sufficient to achieve break-even. Currently, monthly trading volume for tokenized public equities has surpassed $800 million, with some months reaching $1 billion. However, this still pales in comparison to traditional equity markets, where daily volumes often exceed hundreds of billions.
On the other hand, market makers face higher risk exposure and hedging costs on-chain than in traditional markets. Pricing tokenized equities requires real-time mapping to underlying stock prices, and volatility between on-chain and off-chain prices, oracle data delays, and uncertainties in cross-market arbitrage all increase risk. The core issue for tokenized assets is not technical, but rather the lack of a market foundation to support large-scale liquidity.
Infrastructure Advancements: Breaking Through Liquidity Barriers
Despite these challenges, the market is not standing still. Structural solutions to liquidity issues are underway.
On-chain liquidity innovation: Uniswap Labs and Securitize have formed a strategic partnership to integrate BlackRock’s tokenized fund BUIDL into UniswapX for on-chain trading, providing near-instant liquidity for BUIDL holders. With assets currently around $2.3 billion, BUIDL has become a benchmark product in the tokenized fund sector.
Institutional-grade liquidity infrastructure: Securitize and Grove have jointly launched the Basin protocol, initially targeting up to $1 billion in daily liquidity to offer stablecoin liquidity channels for tokenized funds. BlackRock is a key launch partner, demonstrating top asset managers’ confidence in on-chain liquidity solutions.
Exchange-level depth building: Exchanges play a critical role in advancing tokenized finance. According to a CryptoQuant research report, Gate stands out in institutional trading activity, market liquidity, and TradFi derivatives trading by offering tokenized equities, metals, index products, and a 24/7 derivatives trading ecosystem. In March, Gate’s monthly TradFi perpetual contract volume nearly reached $290 billion, setting an industry-leading benchmark.
Additionally, Gate has launched real stock trading services, allowing users to trade over 10,000 US mainstream stocks and ETFs directly with USDT. By partnering with compliant institutions holding US brokerage licenses, Gate provides crypto users with a closer link to traditional financial markets. In early June 2026, Gate’s daily stock trading volume surged to nearly $30 million, marking the highest activity level in recent months.
Conclusion
The liquidity challenges facing tokenized equities are, at their core, growing pains of an emerging asset class still building its market infrastructure. High slippage, lengthy redemption cycles, low market maker participation, and fragmented global regulation form the four pillars of the current RWA liquidity challenge.
Yet, the engines of change are already running. From BlackRock advancing new liquidity channels for tokenized funds, to ongoing iterations of on-chain market-making infrastructure, and exchanges like Gate building dual-track systems for tokenized and real stock trading, every piece of the liquidity puzzle is gradually falling into place.
For investors, understanding these structural challenges is essential for risk mitigation and seizing opportunities amid the tokenization wave. As liquidity barriers are broken down one by one, a truly open global asset trading system is poised to enter its era.
