Forbes: Is Ethereum the best choice for reshaping Wall Street's financial infrastructure?

Author: Jón Helgi Egilsson

Compiled by: Deep Tide TechFlow

Ethereum co-founder Vitalik Buterin, along with his foundation, Electric Capital, and Paradigm, is supporting Etherealize's $40 million launch—this startup has only one mission: to reshape Wall Street on the Ethereum foundation. (© 2024 Bloomberg Finance LP)

Every day, the financial system on Wall Street handles trillions of dollars in capital flows—much of which still operates on systems built decades ago. Mortgage and bond trades can take days to settle. Intermediaries add layers of costs, tie up capital, and amplify risks. For the world's largest banks and asset management firms, choosing the wrong technological infrastructure could lock them into a new generation of inefficiency. However, blockchain technology has the potential to change this situation. The question is, which blockchain is the best choice?

Opponents argue that Ethereum is slow and costly, while competitors claim to have higher throughput. Additionally, fintech giants have even started building their own blockchains. However, Danny Ryan, co-founder and president of Etherealize, and a core architect of Ethereum's evolution, led the coordination of the historic "Proof of Stake" "Merge" project. He insists that Ethereum's security, neutrality, and cryptographic privacy make it exceptionally well-suited to bear the weight of global finance. Indeed, Wall Street needs to be reshaped — Ryan believes that Ethereum is the only blockchain capable of doing this.

Ryan has worked at the Ethereum Foundation for nearly a decade, closely collaborating with Vitalik Buterin and shaping the Ethereum protocol at its most critical turning points. Today, Etherealize has secured a $40 million investment from Paradigm, Electric Capital, and the Ethereum Foundation, along with initial funding from the Ethereum Foundation. He firmly believes that Ethereum is ready to enter the Wall Street market.

Ryan's response—direct, precise, and somewhat surprising—went far beyond the hype of cryptocurrency, but he also elaborated on why Ethereum might be the safest choice for reshaping the financial system.

Danny Ryan, co-founder and president of Etherealize, believes that Ethereum is the only blockchain that possesses security and neutrality, capable of reshaping Wall Street.

Security is a scarce resource

I start with an obvious question: Given the congestion and high fees of Ethereum, why would Wall Street trust it?

Ryan said without hesitation: "The security of the crypto economy is a scarce resource." In proof-of-stake systems, validators need to lock up capital to make the cost of attacks prohibitively high. Today, Ethereum has over a million validators, with a total staking value approaching $100 billion. "You can't achieve this overnight," he added.

In contrast, newer blockchains can create faster networks but often rely on a few institutional backers. "This looks more like a consortium model," Ryan explained. "You trust the companies, contracts, and legal recourse involved. This is a different type of security assurance. It's different from maintaining a neutral global network that involves hundreds of billions of dollars."

Data confirms his statement. According to the latest research from Etherealize, Ethereum secures over 70% of stablecoin value and 85% of tokenized real-world asset security. If security scale is crucial, then Ethereum undoubtedly has this advantage.

The Ethereum network has over a million validators and more than $120 billion in staked value, making it the most secure blockchain—a "scarce resource" for institutions managing counterparty risk. (getty)

Privacy: Commitment and Mathematics

Privacy is another key issue. No bank would put customer transactions on a completely public ledger. Is this also the reason why projects like Canton, supported by large financial institutions, are gaining attention?

Ryan's response was sharp. "Canton relies on the assumption of trust - believing that counterparties will delete sensitive data. This is a form of privacy protection that is deceptive. However, through cryptography, we can fundamentally address privacy issues."

He is referring to Zero-Knowledge Proofs (ZKP), a field of cryptography that was developed long before the emergence of blockchain, but is now being widely applied on Ethereum. ZKP has become a cornerstone of "rollups," a technology that can compress thousands of transactions and settle them on Ethereum. The same technology is being extended to the privacy domain: enabling selective disclosure, allowing regulators to verify compliance without publicly disclosing all transaction details to the market.

"You use mathematics to solve privacy issues," Ryan added—this statement feels like a guideline on how Ethereum meets institutional requirements.

Institutional financing requires confidentiality. Ethereum's zero-knowledge tools aim to ensure privacy through cryptographic techniques rather than intermediaries. (getty)

Modularization: Institutions Control Their Own Infrastructure

I asked him about the architecture of Ethereum. Does the architecture of Ethereum seem too complex compared to Stripe and Circle, who are now trying to build a streamlined blockchain from scratch?

Ryan rebutted that what seems to be a complex architecture is actually an advantage. "Institutions like the L2 model," he explained. "It allows them to customize their infrastructure while inheriting the security, neutrality, and liquidity of Ethereum. They can have control over their own infrastructure while still tapping into the global network effects."

He pointed out that Coinbase's Base network is a proof of concept. Base is built on Ethereum's L2 and generated nearly $100 million in serialized revenue in its first year, demonstrating its economic viability and institutional-grade scale.

For Ryan, modularization is not a technical detail, but a blueprint for how institutions can build their own blockchain infrastructure without losing the advantages of a shared network.

Ethereum's scaling strategy combines rollups with data availability sampling - this approach aims to achieve over 100,000 TPS without compromising security. (getty)

Neutrality and Throughput

What about speed? Solana and other competitors claim to process thousands of transactions per second. Isn't this more practical for global finance compared to Ethereum's relatively limited throughput?

Ryan redefined the question. "When financial institutions consider blockchain, they don't just ask 'How fast is it?' They also ask: Can this system execute correctly and stay online, and who do I need to trust? On Ethereum, the answer is: You don't need to trust anyone."

This is what he refers to as "trustworthy neutrality," meaning that the underlying protocol does not favor insider rules guarantees. Ethereum has never had a day of downtime since 2015—this record is worthy of recognition by the financial system.

Regarding scalability, Ryan mentioned the roadmap set by Vitalik Buterin, co-founder of Ethereum and architect at the think tank. He emphasized that the key lies in the aggregation of numerous L2s running on Ethereum, rather than a single chain. Today, this means that the entire system can handle tens of thousands of transactions per second in throughput— with upcoming upgrades like data availability sampling, Ryan stated that total throughput is expected to exceed 100,000 TPS in just a few years. "Scalability is here—and without sacrificing trust," he said.

With the modernization of financial channels on Wall Street, the real question is which blockchain can meet the institutional demands for scale, security, and privacy. (SOPA Images/LightRocket via Getty Images)

A Bigger Picture

Ryan did not claim that Ethereum is perfect. His point is that only Ethereum possesses the comprehensive advantages of security, privacy, modularity, and neutrality that institutions truly care about.

Stripe, Circle, and other companies may try their own blockchains. But Ryan insists that they will ultimately face a harsh reality: "Most companies will need to reconnect to Ethereum. Because security isn't free - it's a scarce resource."

For Wall Street, this could be a decision point: should it choose to build on proprietary system islands, or connect to a neutral global network that has proven resilient for a decade? Ethereum's underlying architecture may not be the fastest blockchain yet, but for Wall Street, it could be the safest choice - a rapidly expanding architecture that guarantees privacy through mathematics rather than promises that could be broken by institutions.

Source: Deep Tide TechFlow