Wall Street's private blockchain obsession is a 'race to the bottom,' Ethereum advocate Raman warns
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Summary
Vivek Raman, co-founder and CEO of Etherealize, warns that the resurgence of private, permissioned "consortium chains" risks recreating siloed blockchain systems that undermine interoperability and liquidity. Etherealize, backed by Ethereum founder Vitalik Buterin and the Ethereum Foundation, advocates for using Ethereum’s open mainnet as a neutral base layer, enabling permissioned and privacy features on higher layers. This contrasts with the rise of gated networks preferred by major firms, which Raman views as a repeat of failed past attempts at consortium chains.
Why it matters
The source highlights a key industry debate about whether institutional adoption will favor open, public chains or curated, permissioned systems controlled by corporate sponsors. Raman argues that private chains fragment liquidity and reduce interoperability, which could hinder the blockchain ecosystem’s potential. The use of Ethereum as a universal base layer with permissioning added on top is presented as a way to maintain interoperability and attract institutional money.
Key context
Private consortium blockchains were popular among banks in the mid-2010s but largely failed as major institutions withdrew. Today's gated networks, such as Digital Asset’s Canton Network and Circle’s ARC, resurrect this model, emphasizing privacy and reduced counterparty risk. Etherealize’s model compares Ethereum’s mainnet to an open protocol like HTTP, with secure, permissioned layers analogous to HTTPS built on top. Ethereum’s history as a settlement layer for DeFi and tokenized assets underpins its promotion as the institutional base layer.
Key numbers and entities
Involved entities include Etherealize; Vitalik Buterin; the Ethereum Foundation; Digital Asset’s Canton Network; Circle’s ARC; Stripe’s Tempo blockchain; BlackRock (ticker BLK); MIT Cryptoeconomics Lab founder Christian Catalini; R3 consortium; and Hyperledger ecosystem. Etherealize received a grant from Vitalik Buterin and Ethereum Foundation in January 2025 and raised $40 million Series A funding later in 2025.
What remains unclear
The source does not flag open questions or limitations explicitly but acknowledges uncertainty about whether the institutional market will ultimately prefer open networks or curated consortium chains amid ongoing enterprise adoption trends.