From the Back Room to the Order Book

Lumpy, illiquid assets such as private funds, private credit and property interests have long been priced through manual over-the-counter (OTC) negotiation. Fractional trading changes that: orders meet on a real-time order book, and the bid-ask spread is visible to everyone.

The OTC Challenge

In an OTC deal, a broker connects a seller with a few buyers and the price is negotiated privately. Each side sees only its own quote, and the agreed price stays out of view. It reflects a single conversation, not the market’s view, so the next investor starts from scratch.

The Power of Fractions

聚沙成塔: grains of sand, gathered together, build a tower. A US$5 million minimum ticket attracts only a handful of buyers. Divide it into smaller units, and many more eligible investors can take part, each with their own size, time horizon and view of value.

Their orders stack across many price levels, which builds a deep, multi-tiered order book. As more participants compete, spreads can tighten naturally. Every matched trade becomes a visible price point between quarterly NAV reports, and direct matching replaces layers of broker markups with a visible spread and disclosed fees.

The Power of Blockchain

Tokenization records ownership on a shared digital ledger, adding new capabilities:

Faster settlement: minutes rather than days, with fewer records to reconcile

Built-in compliance: eligibility and transfer rules can be coded into the token

Collateral mobility: tokenized holdings can be put to work across platforms

Wider reach: assets can move across venues, connecting more pools of investors

Better Together

Fractionalization brings more participants in. Tokenization helps their capital move faster and work harder. More investors build deeper order books, faster settlement frees capital to trade again, and visible prices give everyone more confidence to take part.

Each helps on its own. Combined, the power of fractions and the power of blockchain make modern price discovery possible for assets once priced only behind closed doors.

Why Now: Tokenization Goes Mainstream

On 28 October 2026, DTCC launched its Tokenization Service (DTS). It lets eligible firms convert securities held at The Depository Trust Company (DTC) into tokenized “digital twins” that keep the same ownership rights and investor protections as the originals, and move collateral within minutes.

DTS launched with 20 participants, including Bank of America, Citi, J.P. Morgan, Morgan Stanley and UBS, and was built with input from more than 150 firms. It runs on the Canton Network and DTCC’s private Besu network, with more blockchains planned for 2027. As DTCC’s Brian Steele put it, “the industry is ready to move beyond experimentation and toward practical adoption.”

As more assets become tokenized, the need for transparent price discovery grows with them.

Liquidity Providers Deepen the Book

Many tokenized private-market funds still rely on redemption windows that are infrequent and often capped. A new generation of liquidity providers now quotes prices on these holdings and settles eligible investors in stablecoins within minutes. They back those quotes with capital and underwriting that account for each fund’s terms, redemption timing and asset-level risks.

On a regulated order book, these quotes sit alongside every other bid and offer, which adds depth and more competitive spreads.

Where 1exchange Fits

1exchange has been bringing fractions and blockchain together since before tokenization went mainstream. Backed by SGX and regulated by the Monetary Authority of Singapore as a Recognized Market Operator (RMO) since 2018, 1X built the world’s first private exchange on the public Ethereum blockchain in 2019.

Today, 1X’s fair, orderly and transparent matching engine replaces manual OTC negotiation with real-time order book matching. That gives clients:

• Continuous, data-driven valuation markers

• Competitive, visible bid-ask spreads

• Market-driven pricing for fractionalized and tokenized assets

Grain by grain, order by order, the market takes shape.

For general information only. Not financial advice or an offer of securities. Investments involve risk. This advertisement has not been reviewed by the Monetary Authority of Singapore