Why order books keep failing for private tokens
Order books work when the underlying produces continuous information. Private funds don't. The fix isn't a better order book.
Every eighteen months or so, a new venue launches continuous order-book trading for tokenised private funds with fanfare, institutional partnerships, and a pitch deck that emphasises liquidity. Every eighteen months or so, turnover on the new venue settles into the same low-single-basis-points range as its predecessors, and the institutional partners quietly move on.
The problem is not execution. Several of these venues have executed excellently by the standards of continuous-trading venues. The problem is that continuous order books require continuous price-relevant information flow, and private-fund assets do not produce it.
A public equity produces a constant stream of signals. Earnings reports, news flow, sector rotation, macro data, order-flow imbalance, option-market pricing — informed traders have multiple signals arriving every hour, and their aggregated activity makes the order book informative. A private real-estate fund produces NAV monthly, material news quarterly, and everything in between is noise. An order book running on noise is noise.
The fix is not a better order book. The fix is a market microstructure that matches the information rhythm of the underlying asset. Quarterly auctions, windowed subscription/redemption cycles, periodic request-for-quote processes — these are the mechanisms that private-market microstructure reaches for when it is not trying to imitate public-market microstructure.
Our working paper (BA-2026-05) on secondary liquidity for tokenised private funds develops the argument in detail. The short version: stop trying to fit private-fund tokens into public-market venues. Build the venues that private-fund information flow can actually support.