Uniswap decentralized exchange founder Hayden Adams has stated that the tokenization of real-world assets (RWA) will be the next major challenge for automated market makers (AMM). In his assessment, tokenization will fundamentally change the approach to liquidity provision in both cryptocurrency and traditional financial markets, while AMM protocols themselves are only at the initial stage of their evolutionary development.
This issue is taking on particular significance given that automated market makers process billions of dollars in transactions daily and could potentially play an important role in providing liquidity for tokenized real-world assets being moved onto public blockchain networks. AMM protocols allow decentralized exchanges to provide liquidity through pooled user deposits and set prices without using a traditional order book to match buyers and sellers. According to a working paper published by the Bank for International Settlements (BIS) in November 2024, AMM-based decentralized exchanges process more than $10 billion in digital assets daily.
If real-world assets move within blockchain infrastructure, these markets will also require reliable liquidity. Automated market makers represent one of the few technological solutions capable of providing liquidity at the scale needed for such markets to function.
Tokenized Assets Enter Global Markets
According to Coinbase Research, approximately $18 billion in tokenized real-world assets (excluding stablecoins) were placed on public blockchains in January 2026, representing an 18-fold increase over 2022 figures. A significant portion of this amount consists of tokenized U.S. Treasury bonds. According to Coinbase analysts, BlackRock's BUIDL fund manages more than $2 billion in such bonds, accounting for nearly 25% of the total volume of tokenized Treasury obligations.
The regulatory framework is also undergoing significant changes. Coinbase analysts note that with the passage of legislative initiatives in 2025 and shifts in regulatory approaches to digital assets, conditions for the development of tokenized financial instruments are becoming more structured. In the European Union, the MiCA regulation operates in parallel with the distributed ledger technology (DLT) pilot regime. In Asia, Singapore's Project Guardian and the UAE's VARA regulatory framework are contributing to the formation of regional asset tokenization hubs.
Market infrastructure is also evolving. On July 15, 2026, the Depository Trust & Clearing Corporation (DTCC) announced plans to convert assets held in its depository into tokenized form for use in real trading operations involving more than 30 traditional and digital market companies. DTCC plans to launch its tokenization service in October 2026.
Liquidity and Provider Concentration Challenges
Despite optimistic assessments of the prospects, the current functioning of AMM protocols reveals a number of structural challenges. According to the Bank for International Settlements study, only a small group of sophisticated participants provided between 65% and 85% of liquidity on the Uniswap V3 platform. Orders from these participants functioned similarly to the actions of traditional market makers and generated substantially greater profits than those of retail liquidity providers.
Despite the fact that automated market makers have theoretically democratized the market-making process, in practice liquidity has consolidated in the hands of specialized participants, replicating patterns observed in traditional financial markets.
Moreover, the tokenization process itself does not automatically provide liquidity. As industry analysts note, tokenizing an asset merely means it can technically be transferred within a blockchain environment, but does not guarantee the existence of an active secondary market. Markets operating within the blockchain environment still require professional market makers willing to provide two-sided quotes and maintain sufficient asset volumes. Many tokenized funds and bonds remain accessible only to accredited investors and qualified issuers, with secondary trading possible only in a limited volume of tokens.
Regulatory Questions for On-Chain Trading
The question of the legal status of automated market makers as platforms for listing tokenized securities remains a subject of professional debate. In a letter dated March 30, 2026, submitted to the U.S. Securities and Exchange Commission (SEC) crypto task force, the Securities Industry and Financial Markets Association (SIFMA) argued that regulators should focus on the functional characteristics of protocols. In SIFMA's view, functions such as order routing, trade execution, price discovery, and settlement may fall under existing securities law regardless of the degree of technological decentralization.
SIFMA representatives expressed concern over a number of technical aspects, including price slippage, liquidity provider incentive structures, the possibility of pseudonymous trading, and limited mechanisms for monitoring potential market manipulation.
This issue is of critical importance for the further development of tokenized asset markets. The DTCC's launch of its own spot trading service in October 2026 indicates that the regulatory approach to automated market makers will determine whether the innovative market-making model is implemented on public blockchains or within regulated exchange platforms.