Tokenization Use Cases [P2.1] - Unlocking Liquidity and Market Reach
Beyond fundraising: This post explores how tokenization is transforming illiquid assets into tradeable, globally accessible instruments—through fractionalization, secondary markets, & financial infra.
Tokenization is rewriting the rules of liquidity in finance. By converting real-world assets (RWAs) into blockchain-based digital tokens, tokenization allows assets that were once expensive, opaque, or downright illiquid to trade with the speed and efficiency of the internet. In Part 1 of this series, we explored how token issuance enables fundraising for projects and investment funds. Now in Part 2.1, we shift the focus to what happens after issuance: how tokenized assets become more liquid, tradeable, and globally accessible. This section covers the first three pillars of liquidity enhancement: Fractional Ownership, Liquifying Private Markets, and 24/7 Trading.
1. Fractional Ownership: Making Illiquid Assets Tradeable
Fractionalization not only improves liquidity, it radically expands market reach. By lowering capital thresholds, tokenization allows a broader range of global investors—from retail in emerging markets to digitally native high-net-worth individuals—to participate in real estate, art, and other once-exclusive asset classes. This democratization brings new capital sources into play and expands geographic distribution of capital formation.
Historically, high-value assets like real estate, fine art, and luxury collectibles were the domain of the ultra-wealthy. The rest of the market had limited access—either you had enough to buy the entire asset, or you didn’t participate. Tokenization changes that. By dividing an asset into smaller digital shares (tokens), tokenization enables fractional ownership, letting investors buy "slices" of an asset just like they might buy shares in a company.
Fractionalization not only lowers barriers for investors, it also introduces price discovery and trading activity to previously stagnant markets. As highlighted by GetJara and Caldwell Law, tokenization ensures the underlying asset stays intact while the ownership structure becomes fluid and digital.
2. Private Markets Made Liquid
Liquidity and market reach go hand-in-hand here. By tokenizing private assets and enabling fractional and secondary access, asset managers can open their investor base to a broader, more global community. A 2023 Coalition Greenwich study showed that 70% of investors cited liquidity as a barrier to private credit investing.
Tokenization is tackling the illiquidity of private markets – assets like private equity, venture capital, and private credit that traditionally lock up investor capital for 5 to 10 years, and exiting early typically involves cumbersome over-the-counter negotiations or fire-sale discounts.
In private equity, secondary sales are rare and cumbersome, and in private credit, loans often have multi-year horizons with no easy exit. Tokenization offers a new paradigm: by representing private assets as blockchain tokens, investors can potentially trade or exit positions much more readily on digital secondary platforms. This means private investments can start to behave a bit more like public markets in terms of liquidity availability.
A prominent example comes from Hamilton Lane, a $900 billion alternative asset manager. In 2024, the firm collaborated with Securitize to tokenize a portion of its $5.6 billion Secondary Fund VI. By deploying on Polygon, Hamilton Lane reduced the fund's minimum investment from $5 million to just $20,000 and listed the tokenized interests on Securitize Markets—a registered Alternative Trading System (ATS). This step not only democratized access but also enabled a path to liquidity for Limited Partners (LPs) far earlier than the standard multi-year lockup.
Early this year, Victory Park Capital advanced this model by tokenizing a $1.7 billion SME loan portfolio on zkSync, an Ethereum Layer 2 solution. By issuing tradeable tokens representing slices of the underlying loan exposure, they broke through the illiquidity of private credit. These tokens, sold via compliant platforms, can be traded peer-to-peer or in micro-tranches, enabling what the industry calls "secondary activation": the unlocking of value in assets that are still performing but previously un-tradeable.
This isn’t just about convenience. Through tokenization, assets like venture capital stakes or SME loans become flexible instruments: easier to price, trade, and rebalance. This shift has strategic implications for asset managers and investors alike—creating a pathway for earlier exits, customized liquidity windows, and smoother portfolio adjustments.
3. Always-On Markets: 24/7 Trading and Global Access
The 24/7 nature of blockchain-based trading systems doesn't just enhance liquidity—it also maximizes market reach. Investors from different continents, from different profiles and time zones can access and act on tokenized assets without waiting for overlapping business hours. This flexibility reshapes investor behavior and creates a more inclusive global investment landscape, especially for geographies underserved by traditional banking infrastructure.
In traditional finance, markets close. Trading hours are dictated by geography and infrastructure. But blockchain-based tokens live on networks that operate around the clock, enabling an always-on, borderless financial environment. And of course, more transparency. With tokenization, real-world assets adopt this new standard of continuous availability.
Consider gold. In its traditional form—bars or ETFs—gold can only be bought and sold during limited trading hours, often requiring brokers and banks. But PAX Gold (PAXG), a tokenized version of physical bullion, is available 24/7 on global crypto exchanges like Binance and Kraken. It lets holders buy, sell, or move gold instantly, even in the middle of the night, from anywhere with an internet connection.
Real estate is also waking up to this paradigm. A 2025 Deloitte report highlights that tokenized property enables not just fractional ownership but round-the-clock access and instant settlement. Platforms like RealT allow U.S. properties to trade globally, continuously. This opens doors for investors in time zones far from the asset itself—whether they're in Singapore or São Paulo, participation is always just a click away.
Tokenization also compresses the traditional T+2 settlement window into near-instant or same-day settlement. In legacy systems, investors typically wait days to finalize ownership transfer—a friction that adds risk and cost. By contrast, tokenized assets on blockchain rails can be transferred and settled within minutes, or even seconds, reducing counterparty exposure and improving capital efficiency. According to Tren Finance research, this shift removes the latency and administrative overhead of manual processing, enabling faster portfolio rebalancing, real-time pricing, and better access for both retail and institutional players. For markets that used to sleep, tokenization is offering a powerful wake-up call.
In Part 2.1, we explored the foundational ways tokenization enhances liquidity by fractionalizing assets, liquifying private investments, and creating round-the-clock trading markets. But these aren’t just enhancements in financial mechanics—they represent a fundamental widening of market reach.
By lowering investment minimums, dissolving time zone barriers, and making exclusive asset classes accessible globally, tokenization is not just injecting liquidity into stagnant markets—it’s welcoming new participants and capital sources into the fold. These developments are reshaping not only how money moves, but who gets to participate in its movement. Together, they break free from traditional limitations and usher tokenized assets into more inclusive, dynamic financial ecosystems.
But what happens next? In Part 2.2, we take a deeper dive into the mechanics of advanced liquidity. We'll look at how tokenized assets start to function not just as ownership claims but as capital-efficient instruments: traded across secondary markets, deposited as DeFi collateral, bundled into structured products, or reused across multiple platforms. Get ready to explore how liquidity becomes composable, programmable, and ever more powerful.
Disclaimer: This content is for informational and research purposes only. DYOR!
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