Wall Street's closed blockchains — a 'race to the bottom': opinion of the head of Etherealize
The market is once again witnessing a surge of interest from traditional financial giants in isolated blockchain networks with restricted access. However, as I see it, this trend carries serious risks for the entire ecosystem, returning us to the fragmentation that distributed ledger technology was originally designed to overcome.
Vivek Raman, co-founder and CEO of Etherealize, sharply criticized this trend in his recent analysis. He rightly notes that consortium networks created by banks and corporations only fragment liquidity and create new isolated "islands," undermining two fundamental advantages of blockchain: interoperability and a shared liquidity pool. He aptly characterized this process as a "race to the bottom."
Privacy on top of the public, not instead of it
Raman's key thesis, with which I fully agree, is that privacy and access control should be implemented at the upper layers of the stack—in applications or at the L2 solution level—rather than by creating separate closed networks. He draws a fitting analogy with the internet: in this model, Ethereum acts as HTTP—an open base protocol—while HTTPS is the encryption and security layer that does not require replacing HTTP itself. This approach preserves network effects and liquidity while providing the level of confidentiality corporate clients need.
As examples of the new wave of "closed" projects, he cites Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe. In his view, these initiatives are "consortium chains 2.0." This is a dangerous déjà vu: we have already seen how similar ambitious projects, such as R3 and the Hyperledger enterprise ecosystem, actively promoted since 2016, failed to achieve mass adoption and were effectively forgotten.
"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.
My comment: Raman's position is not merely a defense of Ethereum's interests, but a pragmatic view of the architecture of future financial markets. Creating closed networks in the long term is a dead-end path that will only lead to new intermediaries and complexities. Given that traditional financial organizations have already begun integrating Ethereum-based solutions into real business processes as early as June this year, the arguments in favor of open infrastructure are becoming increasingly compelling.