Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO slams consortium networks
A dangerous trend is brewing in the industry: major financial institutions are again getting carried away with creating isolated blockchain enclaves with restricted access. Vivek Raman, co-founder and CEO of the Etherealize platform, openly criticizes this approach, calling it nothing less than a "race to the bottom." In his view, consortium networks are not just useless but actively harm the entire ecosystem, fragmenting liquidity and returning us to the very isolated systems that distributed ledger technology was supposed to move away from.
The key problem I see in these initiatives is a fundamental misunderstanding of the nature of blockchain. Closed perimeters do not interact with each other, destroying the two main advantages of the technology: system interoperability and liquidity concentration. Instead of a unified market, we get fragmented pools, which negates the entire value of decentralized ledgers.
Raman proposes a fundamentally different architecture. He insists that privacy and access control should be implemented at the upper layers—in applications or through L2 solutions—rather than by creating separate closed networks. He illustrates his position with an elegant analogy: Ethereum should be a base protocol like HTTP, and additional layers with restrictions and encryption are HTTPS. This approach preserves the openness and liquidity of the base layer while providing the necessary institutional privacy.
The new wave of "closed" projects, such as Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe, the head of Etherealize has dubbed "consortium chains 2.0." He reminds us that we have already been down this path: the R3 and Hyperledger initiatives, actively promoted since 2016, never achieved widespread adoption. History is repeating itself, and this is alarming.
"We firmly believe that a global, open permissionless infrastructure is necessary as the base layer," Raman emphasizes. This position looks particularly weighty against the backdrop of his recent statements that traditional finance is beginning to move from experiments with Ethereum to real implementation in business processes.
My analysis: Raman's position is not just a defense of Ethereum's interests but a rational view of network economics. Creating closed consortia is a path to fragmentation that kills the network effect. In the long term, the winner will be the one who can offer institutional privacy without abandoning public liquidity. And technologically, this is achievable precisely at the L2 and application solution level, not at the level of isolated "side-chains."