Secondary Markets for RWA: Why Liquidity Needs Structure, Not Just Tokens

The rapid growth of tokenized assets creates the impression that liquidity will naturally follow. As of early 2026, the total value of real-world assets on-chain has surpassed $50–60 billion, more than doubling within just 12 months. Within this, tokenized U.S. Treasuries alone exceed $10 billion, while on-chain money market products have also attracted billions in capital inflows.

However, when placed in a broader context, this remains extremely small. The global bond market exceeds $130 trillion, while total global financial assets are estimated at over $400 trillion. More importantly, despite rapid asset growth, secondary trading activity remains limited, with many assets rarely changing hands.

This highlights a critical reality. Liquidity does not come from token issuance. Liquidity comes from market structure. Without proper structure, assets may exist on-chain, but they do not form functioning markets.

What Defines a Functional Market

A financial market only functions effectively when assets can be traded continuously, transparently, and at scale. This requires three core elements: price discovery, continuous trading, and market depth.

In today’s RWA market, all three remain underdeveloped. Many assets, such as real estate or private credit, are still priced through periodic valuations rather than real-time trading. This creates a gap between theoretical value and executable price. Trading is not continuous, but occurs in batches or through negotiated deals. Market depth is also limited, meaning even relatively small trades can significantly impact prices.

In practice, bid-ask spreads in some RWA platforms can reach several percentage points, significantly higher than traditional bond markets, where spreads are often measured in basis points. This directly reflects the lack of liquidity.

Current Limitations of RWA Markets

Despite rapid growth in total value, secondary trading remains concentrated in a narrow set of standardized assets such as government bonds and money market funds. Other asset classes, particularly real estate and private credit, see little to no consistent trading activity.

Market data suggests that more than 70–80% of RWA trading volume is concentrated in short-duration fixed-income instruments, while long-term or less standardized assets lack meaningful liquidity.

Order books, where they exist, are typically shallow, with low order sizes and wide spreads. This increases transaction costs and discourages participation.

At the same time, a significant portion of trading still occurs through over-the-counter agreements. While this model works for large, illiquid assets, it does not contribute to transparent price discovery or visible market liquidity.

The result is a market that exists in terms of asset issuance, but remains incomplete in terms of trading functionality.

Comparing Market Models

The current market structure reflects the early stage of RWA development.

Order book models provide transparency and continuous pricing, but require high trading volume and standardized assets to function effectively. These conditions are not yet met in RWA markets, where assets are diverse and participation is still limited.

Over-the-counter markets are more suitable for large and illiquid assets, offering flexibility in deal structuring. However, they lack transparency and do not scale efficiently, as liquidity remains fragmented and invisible.

Hybrid models are emerging as a more practical solution. In these models, smaller trades occur on exchange-like platforms to build baseline liquidity, while larger transactions are facilitated through intermediaries. This mirrors the evolution of traditional bond markets, where multiple layers of liquidity coexist.

Designing Liquidity Infrastructure

One of the most critical components is the presence of market makers. In traditional markets, these participants continuously provide buy and sell quotes, narrowing spreads and ensuring ongoing trading activity. In the RWA space, the absence of dedicated market makers is a major reason for low liquidity.

Incentive structures are equally important. Liquidity provision must be economically rewarded. While some platforms have experimented with incentive mechanisms, many remain short-term and fail to create sustainable liquidity. Long-term success depends on aligning incentives across participants.

Institutional participation is also essential. Banks, asset managers, and liquidity providers bring not only capital, but also stability and trust. This is already evident in tokenized Treasury markets, where institutional involvement has driven both growth and relatively stronger liquidity compared to other segments.

Conclusion

Even as the market reaches tens of billions of dollars, most assets are still not actively traded. This shows that the challenge is not the quantity of assets, but the presence of a market structure that enables trading.

In the next phase, competitive advantage will not belong to those who tokenize the most assets, but to those who build the most effective liquidity infrastructure.