Want TradFi to embrace tokenization? Crypto's distribution strategy must mature

Everyone says tokenization is being held back by regulation, custody infrastructure, or institutional conservatism. But I don't think that's true.

The technology works. Assets settle perfectly onchain. Yields are competitive, ranging from safe US Treasury bets at 3% up to 10% for riskier instruments. Compliance frameworks exist. Custody solutions from reputable providers are live.

But even with all that working smoothly, institutional adoption is only moving forward at a fraction of what its speed could be.

However, the real problem here isn't regulatory holdup or an ingrained TradFi conservatism that can’t be undone; it’s that the crypto industry fundamentally misunderstands distribution.

In crypto, "distribution" usually means token launches, liquidity incentives, or announcement campaigns. But in traditional finance, distribution means something entirely different. It's the structured process through which markets learn to evaluate, trust, and allocate to new products. It is education delivered through repetition in credible contexts. It's how buyers develop the internal language to justify participation to risk committees who've never heard of your protocol.

This distinction matters enormously. Crypto distribution optimizes for attention and initial traction. Financial distribution optimizes for sustained conviction and repeat allocation. These are fundamentally different goals requiring fundamentally different approaches. A viral tokenization announcement on crypto Twitter might generate temporary interest in the crypto markets, but it doesn't build the institutional comfort required for meaningful capital deployment.

Because without proper distribution, even technically excellent products remain invisible.

I've seen this pattern repeat across dozens of tokenized asset issuers. The product architecture is sound, the legal structure is clean, and the returns are attractive. But institutional traction stalls, and it’s not because institutions lack interest — but because they lack context. They don't know where this product fits in their existing mental models. They can't easily compare it to alternatives. They haven't seen it discussed enough times in trusted environments to feel confident advocating for it internally.

Crypto assumes institutions discover products the way retail traders do: stumbling across them on Twitter, experimenting quickly, and iterating in public. But that's not how asset allocators at pension funds or family offices operate. They need to see a product surface repeatedly across different trusted channels before it enters their consideration set. This is why liquidity remains a lagging indicator in tokenized markets, not a leading one. The industry keeps waiting for liquidity to validate adoption, but liquidity only appears after understanding is already established. Institutions don't allocate to products they can't explain to their investment committees. And they can't explain products that haven't been properly introduced to the market.

Over time, I came to formalize this idea into what I now think of as an institutional legibility framework. This is a repeatable approach for positioning tokenized products so that non-crypto investment committees can evaluate them within existing decision processes. In practice, this meant helping teams rethink how they explained products, what comparisons they used, and which channels they prioritized, way before they worried about liquidity or incentives.

Think about how ETFs scaled. The technology wasn't revolutionary, but what mattered was the systematic education of financial advisors, the repetition in financial media, the gradual accumulation of case studies and peer validation. Vanguard and BlackRock didn't just build better products; they built distribution networks that taught the market how to think about and use those products. The same pattern played out with derivatives, structured products, mortgage-backed securities, and, eventually, bitcoin-backed ETFs.

The distribution problem becomes even more acute in tokenization because you're asking institutions to adopt not just a new product, but a new rail. That's a higher bar. It requires more education, more repetition, more proof points; it took more than a decade from Bitcoin’s invention for the first bitcoin-backed ETF approval, after years of lobbying from established crypto firms. Yet most tokenization projects allocate the vast majority of resources to product development and a minimal fraction to actual market distribution, even though tokenization is arguably a new enough, not widely understood, financial process.

I've watched teams spend months perfecting technical architecture while giving distribution a few weeks of effort through a single press release and some conference presentations. Then they're surprised when institutions don't understand or adopt what they've built. The asymmetry is striking.

Tokenization is no exception to the rules of financial market formation. The industry keeps asking how to tokenize more asset classes, how to improve onchain settlement, how to enhance interoperability. But those are engineering questions. The adoption question is different: how do you make tokenized assets legible to buyers who don't live on crypto timelines or speak crypto language?

Until issuers treat distribution as a first-class function (not marketing, not PR, but genuine market education) tokenization will continue to underperform its technical potential. The bottleneck isn't what you can build onchain. It's whether institutions know how to evaluate what you've built.

Tokenization won't scale when it becomes easier to issue assets. It will scale when it becomes easier to understand them.