Wall Street's closed blockchains — a 'race to the bottom': Etherealize CEO on the fatal mistake of consortia
The wave of interest from traditional financial giants in closed blockchain networks with restricted access is not an evolution of the industry, but a step backward. This statement was made by Vivek Raman, co-founder and CEO of Etherealize, who consistently advocates for integrating institutional capital into Ethereum's public infrastructure.
In his assessment, consortium networks are a direct path to liquidity fragmentation and a return to the isolated systems that distributed ledger technology was supposed to move away from. Raman calls this trend a "race to the bottom," emphasizing that closed circuits are unable to interact with each other. As a result, the market loses two key advantages of blockchain: interoperability and the concentration of liquidity pools.
Etherealize's position is crystal clear: privacy and access control should be implemented at the upper layers—in applications or within L2 solutions—rather than by creating separate closed networks. Raman draws an analogy with internet protocols: public Ethereum acts as HTTP, while additional privacy layers act as HTTPS. This architecture preserves the openness of the base layer without sacrificing security and confidentiality for institutional users.
Consortium Chains 2.0: Repeating Past Mistakes
As examples of the new wave of "closed" initiatives, Raman cites Canton Network from Digital Asset, the Arc project from Circle, and the Tempo payment network from Stripe. He calls this "consortium chains 2.0" and reminds of the sad fate of their predecessors—the interbank platform R3 and the corporate ecosystem Hyperledger, which were actively promoted as early as 2016 but never achieved mass adoption.
"We firmly believe and have always held this position that a global, open permissionless infrastructure is necessary as the base layer," emphasizes the head of Etherealize.
Notably, as early as June, Raman stated that traditional financial organizations were moving from experiments to real-world use of Ethereum-based solutions in business processes. His current criticism of closed networks appears to be a logical continuation of this strategy.
My comment: Raman's arguments about liquidity fragmentation are absolutely justified—the history of R3 and Hyperledger clearly showed that consortium networks without an open economic model are doomed to stagnation. However, regulatory requirements should not be dismissed: for many banks, a public network with anonymous validators remains unacceptable for now. The question is whether Ethereum can offer a sufficient level of compliance tools to close this gap, or whether Wall Street will continue building its "walled gardens."