Source: Cointelegraph
Original: “The first wave of tokenization was a missed opportunity, but the next wave of opportunities can still be grasped”

Author's Viewpoint: Arthur Breitman, Co-founder of Tezos

In 2019, the financial industry experienced a surge in “Security Token Offerings” (STOs). The concept itself is quite straightforward: representing traditional securities—such as bonds, stocks, and even structured products—on the blockchain, aiming to reduce issuance costs and expand coverage. The core focus is on the primary market, that is, issuing tokens corresponding to real-world assets. Some issuers see it as a way to lower back-office operational costs, while others believe that tokenization can attract a new type of investor, particularly those newly wealthy crypto users looking to diversify their assets.

However, after the hype subsided, the results were disappointing. Although the technology did bring marginal cost savings, most tokens did not deliver a real breakthrough. Why? One reason is that these neatly packaged tokenized securities lacked the “excitement” or “uniqueness” that crypto users seek—they prefer volatility, cutting-edge technology, and alternative assets. There was an “impedance mismatch” between the target “issuance channels” and the crypto market: the products did not match the audience.

Blockchain is not just a digital filing cabinet

The early wave of tokenization also missed another opportunity by overlooking the potential of the secondary market. After all, blockchain is not merely a digital filing cabinet. Its true advantage lies in enabling efficient, seamless transactions in a cross-border, cross-timezone context. Many early projects simply hashed shareholder structure tables onto the blockchain and called it “tokenization,” hoping that this form itself would bring liquidity. But in reality, they often did not.

What should have been a frontier of innovation ultimately became a routine task for bank innovation departments, later brought to market by sales teams, hoping that “novelty” would automatically generate demand. However, without truly addressing market friction, genuine interest would not arise.

Fast forward to today, the narrative is beginning to shift, especially in markets where structural frictions do exist. Attention is no longer focused on the tokenization of assets that have long been commonplace (such as gold or mainstream stocks), but rather on asset classes like commodities that have high entry barriers and weak price discovery mechanisms. Uranium is a typical example. As a key raw material for the nuclear energy industry, uranium's importance is continuously rising as the global energy system seeks low-carbon and stable baseload power.

The AI boom and the massive data centers further highlight the importance of stable, clean energy. However, for a long time, the uranium market has lacked transparency and accessibility. Traders face complex bilateral relationships, a lack of spot trading platforms, and inefficient price discovery mechanisms, resulting in limited market participants and extremely scarce liquidity.

Ending “pseudo-tokenization”

This is where blockchain-based tokenization can bring substantial change. By representing physical uranium on-chain and embedding it in a regulated, compliant trading environment, a high-friction market can become more accessible. Rather than merely dressing commodities in a digital guise for “novelty,” it addresses a real problem—global traders can now enter the spot uranium market at a lower threshold for the first time.

A smoother trading environment encourages broader participation and brings more accurate price signals. Unlike early STO projects that tried to attract crypto users who “couldn’t care less” about these products, uranium tokenization genuinely attracts participants who need better access channels.

This is not “pseudo-tokenization.” Instead, it uses powerful smart contracts and compliance modules to handle KYC and regulatory requirements, ensuring that the market is both safe and open, perfectly combining the liquidity advantages of decentralized infrastructure with the security of traditional markets. The result is a more efficient system: faster trade settlements, simpler custody, and significantly enhanced global accessibility. Traders can finally enjoy the results promised by blockchain: a low-friction, high-liquidity market.

The blueprint for successful tokenization

The case of uranium provides a blueprint for other high-friction commodities and niche markets. Imagine the critical metals market, essential for the transition to clean energy, such as cobalt, lithium, and rare earths. These materials are vital for modern industry, but their markets are as complex and opaque as the past uranium market. By applying the same logic—focusing on secondary trading, establishing global issuance channels that match assets with audiences, and ensuring regulatory compliance—we can create a more efficient commodity token market, optimizing resource procurement, pricing, and trading methods.

This approach succeeds because it addresses real pain points. In contrast, early tokenization resembled chasing channels to attract “crypto whales.” But now, by truly leveraging the strengths of on-chain technology, we can use it to solve market inefficiencies. In the case of uranium, connecting suppliers, traders, and end-users will bring a more efficient and transparent market structure to the nuclear energy industry.

For other commodities, tokenization can also bring numerous benefits, from accelerating settlement speeds to expanding global trading accessibility, providing more reliable market signals for industries that rely on these resources.

The era of tokenization as a marketing gimmick is over. It is time to focus on where blockchain can truly bring about change. For markets like uranium, characterized by real friction, limited liquidity, and high entry barriers, we can fulfill blockchain's original promise—building a more efficient, transparent, and user-centered market. This is a more forward-looking approach, moving beyond terminology to deliver tangible, measurable value.

Author's Viewpoint: Arthur Breitman, Co-founder of Tezos

Related: Analyst: Bitcoin (BTC) hits the $2 trillion market cap threshold, the surge is "crazy"

This article is for general reference only and does not constitute legal or investment advice. The views expressed in this article are solely those of the author and do not represent the position or views of Cointelegraph.

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