Ethereum is expected to replace Wall Street infrastructure but is still undervalued.

Investors have yet to fully recognize the potential of Ethereum (ETH) to replace Wall Street's outdated settlement infrastructure, a point made by SharpLink CEO Joseph Chalom and EigenLayer founder Sreeram Kannan during the Milk Road podcast discussion on September 15.

Chalom, who once led BlackRock's digital asset initiative, outlined the fundamental frictions present in traditional finance.

The current system requires a settlement cycle of several days, which creates counterparty risk and forces market participants to provide collateral for overnight financing, while intermediaries profit from these inefficiencies.

He stated: “The current ecosystem is quite difficult to access and full of friction, with intermediaries collecting rents within it.”

The CEO of SharpLink subsequently compared this situation to the atomic settlement capability of Ethereum, which can execute transactions in seconds with no counterparty risk.

He believes that Ethereum represents a “new and fundamentally novel type of public infrastructure, almost like the internet of the Web1 era, and is an investment category.” He positions this blockchain as a universal settlement layer for financial and economic systems.

The programmable features of Ethereum make it possible to rebalance portfolios through smart contracts, allocate dividends in minutes rather than days, and enable composable trading, allowing any asset to trade with any other asset at any time.

Chalom describes these capabilities as the “secret weapon” for organizations seeking to surpass the efficiency of current systems.

Kannan extends this vision beyond the financial sector, describing Ethereum as a “verifiable trust platform” that addresses counterparty risk through cryptographic verification rather than relying on institutional guarantees.

He pointed out that EigenLayer enables Ethereum to support other networks beyond the foundational protocol, and explained: “Verifiability is the cornerstone of society itself.”

He mentioned application examples such as AI agent verification, prediction markets like Polymarket, and trustworthy autonomous systems that require no human supervision.

Both executives emphasized that institutional investors are undergoing a shift from education to acceptance. Chalom pointed out that while Bitcoin requires an explanation of the concept of digital gold, Ether requires a deeper explanation of the infrastructure, which takes more time, but once understood, it will lead to a stronger conviction.

The launch of the Ethereum ETF in July 2024 marks a turning point in acceptance, with financial management companies currently accumulating approximately $14-15 billion in ETH holdings.

Chalom predicts that as institutional participants recognize Ethereum's productive asset characteristics through staking and DeFi yields, its accumulation rate will surpass MicroStrategy's accumulation pace of Bitcoin.