The cryptocurrency industry faces a critical gap in secondary markets for locked and vested tokens, leading to opaque trading and distorted prices, according to industry expert Kanny Lee. In an opinion piece, Lee calls for a Nasdaq Private Markets-style infrastructure tailored for programmable assets to ensure fairer liquidity and support real-world asset adoption. This absence undermines the sustainability of token economies and hinders broader institutional participation.
Cryptocurrency markets excel at token issuance and spot trading, but a significant void exists in the mid-life stage of token lifecycles. Billions in locked and vested tokens currently trade through opaque over-the-counter (OTC) deals, creating price discrepancies and disadvantaging retail investors, as highlighted in a recent analysis.
Kanny Lee, CEO and co-founder of SecondSwap, a decentralized marketplace for locked tokens and real-world assets (RWAs), draws from his experience in crypto trading since 2018 at one of Hong Kong's earliest Bitcoin exchanges. He recalls inefficiencies like the 'kimchi premium,' where information asymmetry led to arbitrage opportunities for a few while confusing the broader market. "That kind of spread exists because markets are not joined up and information is not shared evenly," Lee writes.
Traditional finance addresses this through structured secondary markets, such as Nasdaq Private Markets, which manage liquidity for private shares before public offerings with regulatory disclosures and fair access. Crypto, however, skipped this step, jumping from issuance to volatile spot exchanges and perpetuals. This results in amplified volatility, inconsistent valuations, and grey-zone trading hard to supervise.
The issue is particularly acute for RWAs, including tokenized credit, private debt, and treasuries, which promise on-chain portability but lack reliable secondary liquidity. Without controlled exit options and standardized pricing, institutions hesitate to scale, and tokenization remains more demonstration than infrastructure. Lee proposes an on-chain, issuer-aware layer that enforces vesting, lockups, and compliance via smart contracts, ensuring transparent pricing and broader access. "A proper mid-life market lets a holder buy discounted locked tokens through transparent, issuer-aware rails," he explains.
Failing to build this could perpetuate OTC dominance, slow RWA growth, and invite regulatory interventions, mirroring legacy finance's flaws without its safeguards. Lee argues that such infrastructure would transform locked allocations into visible inventory, fostering sustainable Web3 liquidity.