Liquidity Determines Tokenization’s Value
Tokenization creates the most value when applied to highly liquid assets like stablecoins and Treasury bills, rather than niche or illiquid ones.Summary
This article argues that the success of tokenization hinges on liquidity, not novelty. While the crypto industry initially focused on tokenizing illiquid assets, the most impactful advancements have involved liquid assets like the US dollar (through stablecoins). Tokenization excels when applied to assets with existing demand and established financial frameworks, upgrading existing infrastructure rather than creating demand from scratch. Liquid assets enable new financial behaviors like continuous settlement and efficient collateralization, while illiquid assets struggle with standardization and valuation. The author emphasizes that tokenizing dollars, government bonds, and equities will drive blockchain’s evolution into foundational financial infrastructure, unlike the limited potential of NFTs and bespoke Real World Assets (RWAs).
(Source：Cointelegraph)