Etherealize's Vivek Raman critiques Wall Street's shift to private blockchains, warning it threatens blockchain's core benefits of interoperability and liquidity.
Vivek Raman, co-founder and CEO of Etherealize, has expressed concerns regarding Wall Street's increasing inclination towards private blockchains. He argues that this trend could lead to isolated systems, which would compromise the interoperability and liquidity that blockchain technology is designed to enhance.
Raman acknowledges that while permissioned networks may find a role in finance, they must be built on transparent and open foundations to realize blockchain's full potential. Etherealize, supported by Ethereum co-founder Vitalik Buterin and the Ethereum Foundation, advocates for Ethereum's open mainnet as a neutral platform, enabling institutions to implement privacy-focused features while maintaining openness.
The swift adoption of private networks by leading corporations stands in stark contrast to the introduction of new Ethereum-based products by firms like BlackRock, highlighting the ongoing debate about whether institutional adoption will favor public chains or corporate-controlled systems.
Raman warns that the revival of private "consortium chains" mirrors past failures, such as R3's 2016 consortium, which collapsed when major banks exited. He fears this could initiate a "race to the bottom" among these chains.
He likens Ethereum's mainnet to the foundational layer of the internet, emphasizing that just as HTTPS enhances security on the internet, a strong open base is essential for maximizing blockchain interoperability and liquidity. Raman stresses the importance of a globally accessible, permissionless infrastructure that allows for customization at application and layer-2 levels.
However, the landscape has evolved since 2016, raising doubts about the market's dedication to decentralization and blockchain's core principles. Christian Catalini, founder of the MIT Cryptoeconomics Lab, points out that the current focus on enterprise sales casts uncertainty on whether the industry will prioritize curated networks with specific sponsors, which could diminish the competitive advantages of blockchain technology.
Etherealize, having secured initial funding from Buterin and the Ethereum Foundation in January 2025, followed by a $40 million Series A round later that year, aims to address these concerns. Raman sees BlackRock's recent Ethereum-based funds as a positive development, suggesting that once regulatory clarity is established, institutional investors will likely prefer open networks that are not dominated by any single entity. He warns that involvement in consortium chains might reduce incentives for those not part of the initial group.
