Secondary markets for locked tokens provide platforms for trading assets that are under lock-up or vesting schedules, allowing token holders to access liquidity before their assets are fully unlocked.
On Thursday, decentralized token marketplace SecondSwap launched its mainnet on Ethereum, aiming to create a more efficient market for illiquid assets by removing intermediaries and establishing fair market valuations.
SecondSwap employs a liquidity routing algorithm designed to optimize trade execution and minimize price slippage, ensuring secure and seamless transactions for buyers and sellers.
“By introducing a decentralized, order book-style exchange, we are bringing much-needed transparency to token secondary markets,” said Kanny Lee, founder of SecondSwap, in an email to CoinDesk.
“Our platform enhances visibility into buy and sell orders by leveraging price discovery mechanisms like market depth and liquidity profiling. Seamless wallet integration ensures proof of control for sellers and proof of funds for buyers, increasing security and trust.”
Unlocking Liquidity in Secondary Markets
These secondary markets offer a solution for holders of locked tokens by allowing them to convert their holdings into cash or other assets before full unlock, enabling early liquidity for sellers and discounted opportunities for buyers.
To kickstart liquidity and enhance price discovery, SecondSwap launched a bid campaign, allowing traders to set their own prices while the buy/sell flow feature is gradually enabled. Users can connect their wallets and browse a list of locked tokens, placing bids at their preferred price points. Participants will be notified when matching inventory becomes available, ensuring early adopters gain access to new trading opportunities.
Solana Expansion Set to Unlock $500M in Volume
Looking ahead, SecondSwap is preparing to expand to the Solana network, a move that Lee believes could unlock over $500 million in trading volume.
“Locked token liquidity represents billions of dollars in untapped value. Even activating just 10% of Solana’s dormant liquidity could inject over $500 million in actionable volume,” Lee stated.
He emphasized that SecondSwap’s vesting mechanism could be particularly beneficial for memecoins, helping reduce circulating supply and stabilize token value.
“Partnering with Solana will not only enhance liquidity access but also provide long-term benefits to the broader market,” he added.
With this latest expansion, SecondSwap aims to revolutionize the secondary token market by unlocking liquidity and providing greater transparency for investors and traders alike.
