Wall Street's closed blockchains — a "race to the bottom": Etherealize CEO warns of liquidity fragmentation
Vivek Raman, co-founder and CEO of Etherealize, has sharply criticized the growing trend on Wall Street—the creation of closed blockchain networks with restricted access. In his recent analytical assessment, he called this development vector a "race to the bottom," emphasizing that consortium chains lead to liquidity fragmentation and return the industry to the isolated systems that distributed ledger technology was originally meant to move away from.
According to Raman, closed loops are unable to interact with each other, which destroys the two main advantages of blockchain: system interoperability and the concentration of the liquidity pool. Instead of proliferating separate networks, he insists that privacy and access restrictions should be implemented at the application level or through L2 solutions, on top of open public infrastructure. He illustrates his position with an analogy: Ethereum is HTTP, and additional privacy layers are HTTPS.
As examples of "consortium chains 2.0," Raman cites Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe. He reminds that similar attempts have been made before—the interbank initiative R3 and the corporate ecosystem Hyperledger, actively promoted since 2016, never gained proper traction.
"We have always maintained the position that a global, open permissionless infrastructure is needed as the base layer," stated the head of Etherealize. Notably, back in June he noted that traditional financial organizations had begun moving from experiments to real implementation of Ethereum-based solutions in their business processes.
My comment: Raman's criticism is absolutely justified. The history of R3 and Hyperledger clearly showed that closed consortia die due to the lack of network effects. However, Wall Street continues to step on the same rake in pursuit of illusory control. It is telling that even Stripe and Circle, which build public products, ultimately slide toward creating isolated sandboxes—this is a worrying signal for the entire industry.