Several attempts have been made to bring continuous order-book trading to tokenised private funds. All have failed to generate meaningful liquidity. This paper argues that the failure is structural — private-fund assets do not produce the information flow that continuous venues require — and proposes a quarterly auction model as the native market microstructure. We draw on five years of venue-level data and a detailed case study of a single issuer who ran both mechanisms in parallel.
- 01Continuous order-book venues for tokenised private funds have achieved median daily turnover of 0.02% of outstanding units — two orders of magnitude below the threshold at which order-book pricing becomes informative.
- 02Quarterly auction venues run by the same issuers achieve median turnover of 1.8% per auction, concentrated at the NAV strike with modest dispersion.
- 03The structural reason is that private-fund assets do not produce continuous price-relevant information; a quarterly auction aligns trading to the information rhythm of the underlying assets.
- 04A standardised quarterly-auction protocol (harmonised across venues and issuers) would materially improve liquidity without requiring any regulatory change.
1. The order-book experiment
Between 2021 and 2025, at least fourteen venues launched continuous order-book trading for tokenised private funds, ranging from tokenised real estate to tokenised private credit. The hypothesis was that continuous trading would reveal fair value and attract liquidity providers.
The evidence is now in. Median daily turnover across these venues has been 0.02% of outstanding units. The order books are thin enough that a single medium-sized order moves the price by several percent; liquidity providers accordingly do not quote.
2. Why order books fail here
Order books work when the underlying asset produces continuous price-relevant information. Public equities have earnings, news, order flow, and a host of fundamental and technical signals arriving continuously. Private-fund assets do not. NAV is struck monthly or quarterly. Material information is rare. The gap between NAV strikes is information-sparse by construction.
A continuous order book in an information-sparse environment is dominated by noise. Informed traders do not participate; liquidity providers cannot price; and the venue settles into a low-turnover equilibrium that fails to accomplish its purpose.
3. The quarterly auction alternative
A quarterly auction aligns trading to the information rhythm of the underlying asset. All subscriptions, redemptions, and secondary trades for a quarter are collected and cleared at a single price, typically at a discount or premium to the struck NAV determined by the aggregate imbalance.
Issuers who run quarterly auctions achieve median turnover of 1.8% per auction — roughly 90x the equivalent continuous venue. The turnover is concentrated at or near NAV and the variance in clearing price is modest. These are the properties a liquidity mechanism should produce.
4. Toward a standardised protocol
A standardised auction protocol — harmonised across venues and issuers, with agreed timings, clearing rules, and disclosure requirements — would substantially improve cross-venue liquidity. We offer a draft protocol specification in the appendix and invite comment.
This paper will be available as a signed PDF. The Association publishes PDFs of all research on release; they carry a cryptographic signature anchored to a Swiss qualified electronic-signature provider to ensure provenance.
Boli Association. (2026). Secondary liquidity for tokenised private funds. Boli Association Working Paper No. BA-2026-05. Zurich.