Disclosure: The perspectives shared in this article are solely those of the author and do not reflect the views of crypto.news’ editorial team.
Cryptocurrency boasts premier launchpads and some of the most liquid spot markets globally. New tokens can be minted, listed, and traded almost instantly. Once unlocking or vesting contracts clear, there’s ample liquidity for transactions.
Summary
- There is no “mid-life market” for tokens in crypto: Between issuance and spot trading, billions in locked and vested tokens trade off-chain in non-transparent OTC deals, distorting prices and harming retail investors.
- This gap compromises sustainability and RWA adoption: Without structured secondary liquidity, price discovery falters, volatility increases, and tokenized real-world assets struggle to grow beyond demonstrations.
- Transparent, rule-aware secondary markets are essential: An on-chain, issuer-aware mid-life layer — akin to Nasdaq Private Markets for tokens — would facilitate fair access, visible pricing, and organized circulation throughout a token’s lifecycle.
In the midst of the token lifecycle, there remains a significant void. Billions in vested and locked allocations are in limbo, lacking structured and transparent channels for trading, pricing, or managing their circulation.
When I entered crypto trading around 2018, working at one of Hong Kong’s first Bitcoin exchanges, I observed how inefficiencies and lack of clarity created immense opportunities for a few while confusing others. We saw individuals flying in from Korea with suitcases of cash to capture the kimchi premium. Such spreads exist because markets are disconnected and information is not evenly distributed.
This pattern recurs in various forms throughout a token’s lifespan. Opaque OTC deals and off-chain price discovery flourish, causing price discrepancies, molding retail expectations, and destabilizing token economies. Large holders engage in backroom negotiations. Prices are established in private discussions. Volatility seeps into public markets later. By the time public markets adjust, exchanges may reflect one price while private transactions utilize another; generally, it’s retail that incurs the costs of the discrepancy.
Traditional finance addressed this issue long ago. Public markets require regulatory disclosures that outline fundraising terms and discounted allocations for insiders and institutions. Platforms like Nasdaq Private Markets offer structured solutions for private companies to manage secondary trading and liquidity for their shares before going public. The conclusion is obvious: healthy markets necessitate structured, transparent “mid-life markets” to maintain orderly and accountable liquidity throughout a token’s lifecycle.
TradFi constructed the bridge; crypto skipped over it
In healthy capital markets, primary and secondary markets support each other. Capital is raised in the primary market, while structured secondary layers recycle liquidity, refine price discovery, and expand distribution. This is how systems endure for decades rather than merely surviving a single cycle.
Crypto essentially skipped building that bridge. It transitioned from issuance directly to spot exchanges and perpetuals. In many venues, for every winner, there is someone who loses on the other side of a leveraged trade. This structure may be acceptable for speculation, but it does not foster sustainable ownership or long-term liquidity.
The absence of a mid-life layer results in predictable problems: pricing inconsistencies between public and private markets, ambiguous trading in grey areas that are challenging to monitor, and unequal valuations across venues.
RWAs amplify the gap
Real-world assets have emerged as a prominent topic within crypto. We’re beginning to see credit, private debt, treasuries, and other yield-bearing instruments represented as tokens. In many respects, RWAs are ideally suited for on-chain finance: they’re portable, familiar to traditional finance, and linked to cash flows already understood in the real world.
However, most of these assets still lack reliable secondary liquidity in practice. Holders lack a regulated method to exit positions. Institutions don’t have a standardized pricing layer they can trust at scale. Without a mid-life market, tokenization risks remaining a technical experiment rather than evolving into a genuine financial infrastructure.
To ensure RWAs garner substantial TVL across multiple chains, liquidity must not only be present at issuance and redemption but also circulate reliably in between. This entails secondary markets that can programmatically manage lockups, compliance, KYC, and distribution rules, rather than relying on spreadsheets and informal emails.
Characteristics of a crypto “mid-life market”
A genuine mid-life market for tokens doesn’t aim to replicate the bureaucracy of traditional finance on-chain. It focuses on creating a platform that reflects the functionality of programmable assets. Issuers should be aware of what’s trading and under which conditions. Vesting and lockup periods should be preserved by design. Pricing must be transparent, and compliance should be enforced through smart contracts rather than paperwork.
Above all, access must be equitable. Currently, the secondary market for locked tokens is largely dominated by institutions and professional trading desks. They possess the connections, risk management teams, and the patience to maintain substantial long-term positions. Retail hardly experiences those benefits.
The aim is to enhance that access, not by transforming everyone into a degenerate trader, but by offering more individuals a chance at value-focused positions if they’re prepared to invest patience and capital. In traditional markets, bulk purchases with an acceptance of lock-up conditions and a long-term perspective can yield better prices. There’s no reason why crypto shouldn’t operate similarly, nor why only a select few funds should enjoy such advantages.
An effective mid-life market allows holders to purchase discounted locked tokens through transparent, issuer-aware systems, retain them for the stipulated period, and even relist them as conditions evolve. Every time those tokens change hands, the value transmits through on-chain contracts instead of vanishing into phone calls and email attachments.
The consequences of not establishing this layer
If we leave this gap unresolved, OTC channels will persist as the default options. Volatility will continue to be heightened by information shocks instead of being grounded in fundamentals. Asymmetrical information will remain the norm.
RWA adoption will decelerate due to liquidity limitations because serious investments will shy away from assets with unreliable entry and exit points. Institutions will be reluctant to scale their exposure beyond a limited number of blue-chip assets. Regulators will feel compelled to intervene in shadow activities using blunt instruments.
In that scenario, crypto could mirror the least favorable aspects of traditional finance, such as lack of transparency, insider advantages, and unequal access, without incorporating the safeguards that contribute to the resilience of those markets.
Every mature financial system features a structured secondary layer. Crypto must maintain continuity between issuance and exchange if it intends to be recognized as lasting infrastructure rather than merely another speculative environment.
A Nasdaq Private Market-style framework, crafted for programmable assets, provides tokens with predictable mid-life transitions, fairer markets, and true tokenization. It transforms locked allocations into visible inventories rather than concealed risks. It bridges the gap between locked and liquid.
This critical layer will determine whether Web3 liquidity becomes sustainable, accessible, and trusted on a global scale or if we continue to pursue the same inefficiencies we sought to amend.
