Breaking the Cold Start Problem in Tokenized Assets

The cold start problem is a common challenge when trying to introduce new innovations. It happens when both products and users need to grow together, but neither can succeed alone. In the world of tokenized financial assets, issuing tokens is easy, but real success comes only when network effects are in place. This means that users, such as investors, must see real value from the tokens through benefits like cost savings, better liquidity, or improved compliance.

However, in practice, both token issuers and investors face the cold start problem. Limited liquidity makes it hard for issuers to grow, and investors are cautious because there isn’t enough transaction volume to build a strong market. Issuers are also hesitant to move away from old systems, even though tokenization offers many advantages.

An example of this is the tokenization of bonds. There are many new tokenized bond issuances, but the benefits are still small compared to traditional methods, and secondary trading is limited. To overcome this, there needs to be a clear use case showing that tokenization brings real benefits, such as faster settlements and more liquidity.

At Autentic Capital, we’re focused on overcoming this by building a platform that ensures value for all participants—whether through cost savings, improved compliance, or better liquidity. As we progress, we aim to bridge this gap and create a thriving ecosystem for tokenized assets.

What solutions do you think can solve the cold start problem?