Crypto has built world-class launchpads and some of the most liquid spot markets globally. New tokens can be minted, listed, and traded almost instantly, and once vesting or unlocking schedules expire, liquidity is usually sufficient for prices to move efficiently.
However, a structural gap remains in the middle of the token lifecycle. Billions of dollars’ worth of vested and locked allocations sit in limbo, with no standardized or transparent venues to trade them, price them, or manage how they enter circulation.
From early crypto trading desks in 2018 to today’s global markets, inefficiency and opacity have consistently created asymmetric outcomes. Fragmented markets and uneven access to information allow a small group of participants to capture value, while the broader market absorbs the cost. This dynamic has reappeared repeatedly across token lifecycles, most notably through opaque OTC deals and off-chain price discovery.
Large holders negotiate privately, prices are formed in closed channels, and volatility eventually spills into public markets. By the time exchanges adjust, private transactions have often cleared at entirely different valuations, leaving retail traders exposed to the gap.
TradFi solved the problem crypto skipped
Traditional finance addressed this issue decades ago. Public markets require disclosures around fundraising terms, insider allocations, and discounted placements. Platforms such as Nasdaq Private Markets provide structured environments for secondary trading of private shares before IPOs, ensuring transparency, orderly liquidity, and accountable price discovery.
The lesson is straightforward: healthy capital markets require a clear secondary layer between issuance and open trading. Crypto largely bypassed this step, moving directly from token issuance to spot exchanges and perpetual markets. While effective for speculation, this structure does little to support sustainable ownership or long-term liquidity.
The absence of a mid-life market has produced predictable outcomes, including persistent price gaps between public and private venues, gray-area trading that is difficult to supervise, and inconsistent valuations across platforms.
RWAs make the gap impossible to ignore
The rise of real-world assets has brought the issue into sharper focus. Tokenized credit, private debt, treasuries, and yield-bearing instruments are increasingly promoted as a bridge between crypto and traditional finance. In theory, RWAs are ideal for on-chain markets due to their familiarity and cash-flow backing.
In practice, most RWA tokens still lack reliable secondary liquidity. Exit options are limited, and institutions lack standardized pricing mechanisms they can trust at scale. Without a functioning mid-life market, tokenization risks remaining a technical proof of concept rather than a durable financial infrastructure.
For RWAs to attract meaningful TVL across multiple chains, liquidity must exist not only at issuance and redemption but throughout the holding period. This requires secondary markets capable of enforcing lockups, compliance, KYC, and distribution rules programmatically, rather than through ad hoc agreements.
What a crypto mid-life market should deliver
A functional mid-life market does not require replicating traditional bureaucracy on-chain. It should reflect the programmable nature of digital assets. Issuers need visibility into trading activity and applicable rules, vesting and lockup conditions must remain enforceable by design, and pricing should be transparent. Compliance should be embedded in smart contracts, not handled through paperwork.
Access is equally critical. Today, secondary markets for locked tokens are dominated by institutions with the balance sheets and infrastructure to negotiate private deals. Retail participants rarely see comparable opportunities.
A well-designed mid-life market would broaden access without encouraging excessive speculation. Participants willing to accept lockups, commit capital, and take a long-term view should benefit from better pricing, as they do in traditional markets. There is no structural reason crypto should function differently, or why these opportunities should be reserved for a small group of funds.
Such a system would allow holders to acquire discounted locked tokens through transparent, issuer-aware mechanisms, hold them under agreed conditions, and relist them as circumstances evolve. Each transaction would occur on-chain, replacing opaque negotiations with verifiable market activity.
The cost of leaving the gap unresolved
If this structural void persists, OTC channels will continue to dominate secondary liquidity. Volatility will remain driven by information shocks rather than fundamentals, and information asymmetry will endure.
RWA adoption is likely to slow as institutions hesitate to deploy capital into assets without reliable entry and exit mechanisms. Exposure will remain concentrated in a narrow set of large-cap tokens, while regulators respond to shadow activity with increasingly blunt tools.
In that scenario, crypto risks inheriting the least efficient aspects of legacy finance, including opacity and insider advantage, without adopting the safeguards that made traditional markets resilient.
Every mature financial system relies on a structured secondary layer. For crypto to evolve into long-term financial infrastructure rather than a purely speculative arena, it must establish continuity between issuance and exchange trading. A Nasdaq-style private market model adapted for programmable assets could provide tokens with a predictable mid-life, fairer access, and sustainable liquidity, transforming locked allocations from hidden risk into visible inventory and determining whether Web3 markets mature or repeat the inefficiencies they set out to solve.
Ready to start trading Forex? Join iXBroker today and kick-start your trading journey now!
