19th November 2025 > > Tokenisation & liquidity.

tl;dr

Another tale of tokenisation. A costly mistake caused by underestimating the importance of liquidity.

Market Snap

Market Wrap

$89k marks the local low (thank you seller for hitting my bid), for now at least.

Curious Cryptos’ Commentary – Lanyardistas look away now

The CCC has been banging the drum for tokenisation for some time now, with little to show for it so far, to be brutally frank. There is a common theme that I am always expecting progress quicker than we experience in the real world, but I think we know the reasons for that.

Dar Global and the Trump Organization have announced a joint project to launch (another) high-end resort in the Maldives, an idea which is of no concern to us. What is interesting is that the project will be tokenised to provide some of the development funds:

https://www.prnewswire.com/ae/news-releases/dar-global-and-the-trump-organization-announce-two-global-firsts-trump-international-hotel-maldives-and-the-worlds-first-tokenized-hotel-development-project-302616868.html

Personally, you may or may not want to get into bed with the Trump Organization but, putting that obstacle to one side, this is an indicator of the potential for democratising the entire financial world using tokenisation. The opportunity to participate in infrastructure projects from the ground up, using small amounts of capital, with a liquid exit always available, will be a quite extraordinary development.

Perhaps this project crashes and burns, Perhaps, others do too. But in the decades to come, this type of financial investment will become run-of-the-mill, lowering the cost of capital for all business, improving productivity, and making everyone wealthier. Just one of the many beautiful things inherent to cryptos.

Curious Cryptos’ Commentary – Liquidity

One of the most under-rated and least understood aspects of financial markets is liquidity and its potential constraints. That applies to both TradFi and crypto markets, but especially so in DeFi. This cautionary tale will explain why.

An ADA whale accumulated 14.45mm ADA mostly in August 2020 at a price of around 15c, so call it $2mm. Remaining dormant since then, the owner decided to cash in at around 50c, totalling $7mm with a tidy profit of $5mm, which is not bad. 20% per annum return during a period when interest rates were mostly zero is a nice trade.

Except when it’s not.

The owner swapped to USDA, a USD stablecoin on the Cardano network. What he or she failed to do was to consider the liquidity of the pool. DeFi pools work as automated market-makers, simply applying an algorithm to determine the outcome of the swap.

$7mm of ADA was swapped for a measly 846k of USDA, providing a windfall to those who had added liquidity to the pool, to the detriment of the seller.

There is nothing untoward about this situation – it was algorithmically pre-determined. If the liquidity is not there, you pay for it in the price.

I hope you now understand that liquidity is as important as pricing when it comes to financial markets.