Fireside Chat: The Institutional Case for Ethereum with Vivek Raman and Ashley Stanhope

Transcript

[applause] >> Even back, it's been uh it's been a little while. Um how have you been? >> It has been a minute. I've been [clears throat] great. It feels like we're in a token bear market, but we're in the biggest blockchain bull market, I think, since we started since I got into Ethereum. So, I'm pretty excited, pretty pumped. >> Great. Um actually, you know, it's it's interesting when you launched Etherealize back in 2025, I remember um talking to you and some members from the team, and I think part of the motivation for you to launch was you felt that there wasn't a very clear narrative on Wall Street about Ethereum. Um I'm curious to to kind of hear your version of events and if you find that uh still

to be the case and and how it's maybe changed since you launched. >> I actually think the value proposition of public blockchains in general, and especially Ethereum, is the strongest it's ever been. The adoption's the strongest ever been. The the regulatory backdrop, everything we need for this to actually succeed and upgrade the whole financial system is is here. Uh it's just all been in the engine room, so it's not out in the open yet. And I think that's the opportunity right now is at the the the willingness to adopt the new technology is finally here. Um it was in proof of concept mode a year ago when we launched. And so, we said there's a missing voice to say, "Here are the institutional use cases for this global

platform that looks like the internet where you can bring money and assets and the whole financial system onto." And now that's sort of a foregone conclusion that we are going to integrate blockchains into a lot of into a lot of the financial system. So, um now I think the narrative is as strong as it's ever been, but at the banks, at the asset managers, not mainstream yet. And again, I think that's the opportunity. >> So, what are they saying about Ethereum? What what are some of the conversations you're having with the big banks? >> That the financial system needs to upgrade. There's a lot of legacy architecture.

And by legacy architecture, I mean a lot of it's built on COBOL. A lot of it runs on Excel spreadsheets. A lot of it runs on uh I mean as much as faxes and wires and technology that just should not be the underpinning of the global financial system, especially the center of it, which is the United States. It's a little ironic that um that the technology layer for the most robust capital markets in in the world is is antiquated, but it needs a lot of inertia from regulators, from institutions that actually need that upgrade. And banks have known for a long time that blockchains are the upgrade. Like blockchains aren't that complicated.

They're not that difficult of a concept other than um they all adopted the internet. Everyone uses the internet now. And now if you have an internet layer with money on it, then it upgrades the whole financial system. So, it's they've been experimenting for a very long time, but now that regulation is very very favorable, the use case of public blockchains is finally apparent to all of them. So, they're all moving assets on, and it's pretty exciting. >> So, you think it was the the regulation is kind of what's given the confidence to to some of the institutions then to make the plunge?

>> So, I think it was a few things. First is the technology had to be ready. And and and by ready, it means that you had to see there's a track record. No one's going to institutions aren't going to adopt a blockchain launched a year ago or two years ago or three years ago with real financial assets. Ethereum has 10 years of operating history with no downtime, um the most secure network. Um the only other one is Bitcoin, but you can't have assets on Bitcoin. So, it has the track record. That's the first thing. And the technology's ready. The second thing is you needed to see institutions start to do enough pilots and proof of concepts that um that that uh that there's precedent. And so, BlackRock did that with Biddle.

There's now a lot of stable coins. 60% of all stable coins are on Ethereum. So, there's product market fit coming from the institutional side. And then lastly, but also most importantly is we now have a regulatory environment that is embracing public blockchains saying the US should be the center of a blockchain adoption. And so, genius act passing to me that was really the the starting line when stable coins went into law. And so now everyone's allowed to use stable coins. So, now it's fully de-risked. The next step is going to be clarity. But even so, blockchains are now in law, and so they're ready to be adopted.

>> Great. And from my understanding, you are Etherealize is is onboarding institutions to to Wall Street. So, can you talk tell me a little bit about what your company's up to and any future plans? >> Yeah, absolutely. So, there is there's always a dual mandate. I mean, we I love the Ethereum ecosystem because to me it represents the most of the most internet-like network where you can actually coordinate the entire global financial system. I mean, eventually beyond the US we're focused on the US as a start, but where is the only place you can get um JP Morgan, Bank of America, Goldman, BlackRock to all agree that there's one platform? It's not going to be someone that's owned by It's not going to be a platform that's owned by somebody else.

It has to be something neutral. Just like everyone puts all their information on the internet and their data on the internet, they are going to put their assets on a neutral place. That's always stuck out to me as Ethereum's biggest value prop. So, um so part of our job is to highlight why that's valuable. What decentralization actually means is no central party controlling the network. The least amount of counterparty risk, the most security for assets. So, we educate on the Ethereum front. That's that's important. If we're not saying If we're not sort of amplifying the the values and narratives of of Ethereum and credit neutral blockchains, then we're going to lose the plot. And if a lot of the financial system goes into a consortium chain or a centralized chain

and those inevitably break or don't work out, then we've missed the window of opportunity that we have right now. So, part of our part of our mandate is educating. As we've been educating for the first 6 months of realize, a lot of the players have said, "Great. We don't want to build any of this stuff ourselves. So, um can you give us the building blocks we need to actually bring our assets on chain in a in a sustainable way?" And so, sustainable way is different. Again, we we don't Blockchains have moved past the proof of concept stage. It's what do we need for real scale of institutional adoption?

And so, no one's been building that, so we did. So, so that includes uh very bespoke tokenization um that that gets to back offices of organizations and gets to the accounting teams and like all the all the people that use faxes and wires and everything. So, that's what we want to upgrade with tokenization. The second is privacy. Um I'm with super strong believer that privacy needs to be a layer on top of public blockchains rather than embedded into um a blockchain natively. Uh you need you need optionality, you need modularity.

Ethereum's been built for that, so we've built a pretty robust privacy infrastructure. And then, the last thing is applications. Uh tokenization without use cases and applications doesn't do anything. So, again, we we've said that we need to come in and and help bring institutional assets on and scale. And so, half our job is building what's missing, the gaps in the ecosystem. Half of it's saying, "Here's why all of it belongs on Ethereum." >> Right. Um I'm always curious about how uh the word decentralization or just even the concept like resonates with Wall Street because um you know, and that and that's sort of part of Vitalik's mandate as well, where he wants to the Crops framework essentially is like, you know, leaner team at the EF, censorship

resistance openness privacy and security. And you know, it does Wall Street really understand that? Or do you feel like there's there's it's kind of a big learning curve to really to get that vision? >> It is and it isn't. Uh the most ironic part that um that our co-founder Danny's been saying is from his I mean, Danny helped build a lot of Ethereum and oversaw the merge when Ethereum moved to proof of stake and and EF values decentralization above above all other mandates and values, but he ironically said the biggest customers of decentralization are actually the institutions. And it's it's because of incentive mechanisms. It's because if you are going to a blockchain ecosystem controlled by a party or a company, then

there's single points of failure and there's also lower profitability. So, it's it is pretty ironic that um that how we educate about decentralization is just you want to go to the safest, most secure blockchain ecosystem. And so, decentralization to me means security. It means resilience. It means no single no single points of failure. That's what resonates, but it's also sort of table stakes. I mean, we have to be better than the existing system. So, the question you always get is why not just use AWS? So, the the cuz a blockchain will always be less performant than AWS is by definition.

So, what what's better than Amazon's counterparty risk? It's it's a system that no one owns. And that's what they understand. I mean, I'm very very happy the EF is narrowing focus to crops. I think it's the only way I think it's they're zigging while all other blockchain ecosystems are zagging. And so, um that will work. Uh but but we need to make sure that the Ethereum remains the most decentralized, neutral, credibly open platform that everyone can go on to. That's that's how we get to the internet scale. >> So, um I know that RWA I think I think Ethereum's still number one in terms of RWA the Yeah.

But, Solana is now over 2 billion RWA growth. And you know, I know a lot of tradfi firms, BlackRock, there's payment uh firms, Visa, Stripe, PayPal are also now using Solana for stablecoin settlements. Um Ethereum Ethereum has always maintained conviction that Ethereum is the blockchain for Wall Street. Um just kind of wondering what kind of conversations you're having with the institutions about Ethereum versus Solana.

>> Um to be to be completely frank, Solana never comes up. So so that's that that should uh Last cycle, it was it was a fleeting it was I mean it was one of the conversations in the room. Now the real the real thing that comes up is you is whether to use something like Ethereum a public open blockchain um that I mean it's it's it's pretty the liquidity the the total value locked the stablecoins RWA is the the institutional adoption kind of speaks for itself and um and other blockchains have I don't picked to specialize in other less institutional assets and and applications and so you're seeing that play out. But the real conversation now is should we use open permissionless

blockchains or should we use permission consortium blockchains? So that's that's the much more interesting conversation because because yeah, we need to be better than what consortiums can do. We need to be better at what existing infrastructure can do. And so the move the leap of faith from something that's owned by a group of banks or owned by group of asset managers to actually being internet-like, that's the that's the more interesting thing to convince people on and um yeah, that that's where all our energy and focus is versus different L1 blockchain ecosystems. >> Is there a way for to have like a hybrid approach? Like would you advocate for that or are you do you just you think a permissionless is the way to go?

>> No, that's that's the most beautiful part about Ethereum. That's We We all these tools in our toolkit because of because of what EF has done, because of what the Ethereum builders have done. We have the most modular ecosystem out there. So, you can absolutely have consortium chains on top of public permissionless blockchains that are secure. You can have You can have privacy chains. You can have different applications all on top of public permissionless layers. It's It's as long as the base layer is secure and open. Again, I always come back to the internet cuz it is the best analogy. As long as you have HTTP at the at the base layer, then you can build your own secure websites. You can build your own HTTPS on top of it. You can have your own consortium own chains on top of it.

That's why the layer two model It's not dead at all. I think that the what um what the EF what Vitalik basically said is layer twos have to be differentiated. They have to be specialized. They have to stand out. They have to have use cases. And so, we're seeing that. I mean, you're seeing lighter on top of Ethereum is uh ultimately going to have a lot more functionality, throughput, um security than even something like a Hyperledger because it's an app chain on top of a big open chain. You can have privacy protocols um that are controlled by institutions but on top of Ethereum. So, yeah, I think it's the only place you can have your cake and eat it, too. And it's pretty positive sum. And so, yeah, I think you can kind of do all of it with Ethereum.

>> Right. And you see um more institutions potentially like going in the the layer two the layer two route versus just launching their own chains or >> Right now, I mean, from the data it's been a bit of a toss-up. Like, you've seen Tempo launch. You've seen Circles Arc launch. Um You've also seen I mean, the most successful use cases have been Coinbase's Base on on Ethereum and Robinhood's layer two. And both of those are still going to grow tremendously. And then, things like lighter, the app chain thesis. I actually think that the layer one versus layer two framework is going to get abstracted away because because of what the EF is narrowing its focus to, which is saying, "Let's make sure Ethereum is future-proof. Let's make sure it's quantum resistant. Let's

also make sure that there's ZK built into the base layer, so layer one and layer two can feel like the same thing. So, you can have super fast layer twos that plug in and interoperable with layer one. So, my point is I think the L1 L2 thing will be abstracted away for institutions. They'll just use Ethereum and if they want more consortium like block space that's faster, cheaper, opinionated, it's going to end up being a layer two like and it's and if they want to just be on the base layer and interact with it with one hop with all their liquidity, it's going to be on layer one.

>> Okay. Um I want to pivot a bit. I want to talk a little bit about price predictions because you did put out a report a couple months ago called productive money and uh it got a lot of traction. I saw it on on Twitter and other places. Um in that report you put a price target of 250,000 on ETH, um which is quite >> I did. >> it's quite a big it's quite a big jump from where we we're at now. Um tell me a little bit about the report and how you came up with that number.

>> Yeah, so it's it's a it's a TAM of what ETH can become when ETH becomes we reprice it to becoming money. And that's a very, very important construct because people value blockchain assets incorrectly and they've continued to since we put out the report. So, so far we have gone closer to the downside case than 250,000, but I I we stand by it because we believe blockchains are a novel technology with exponential upside. And people have stopped thinking of exponentials when they think of blockchains. They think of um they look at blockchain ecosystems on revenue they generate or fees they generate and blockchains aren't companies. If they if if they're real blockchain infrastructure, you're you're like the internet. But, what's the difference

between the internet and a blockchain? Blockchain secures value. It secures assets. And so, you need a core asset at the core of every single blockchain for security and for being the censorship resistance, the sort of perfect asset between all the different tokenized assets that are on blockchains. So, long way of saying, Bitcoin has the Bitcoin network has Bitcoin as the asset and people know it has value to secure the network. The miners mine Bitcoin um and they sell it for their costs and then that's how that's how you pay for the network. Ethereum's network potential is far higher than Bitcoin's.

It's going to have the whole financial system on top of it. It's going to have a sea of trillions of tokenized assets on top of it. The core asset that secures and powers Ethereum is ETH and so the best money in the whole ecosystem of Ethereum is is ETH. And so, I don't know when that's going to happen. It clearly wasn't after we uh when when we published the report, but but big ETH is better money than Bitcoin and ETH looks a lot like I mean, it looks a lot like gold in some sense and it has a yield and it has additional properties on top of it. So, we think that the biggest opportunity that's exponential is when one day people start flipping ETH from a value on cash flows to saying this is a part of a portfolio, it's a it's a monetary asset that we need to hold

alongside something like gold. And when some of the flows start going out of Bitcoin, um which is pretty central controlled by a couple players that might be selling, um and and start going into ETH, then then the repricing could become the TAM of Bitcoin and the TAM of gold and so that's how we get to our ultimate target. >> Okay. >> It'll take time, but it's a Yeah, it's it's a pretty interesting call option right now, I think. >> Uh without naming names, do you think that being committed to the future of Ethereum means holding the asset itself? >> The I mean, actually the beautiful part is you don't have to. I mean, the the monetary values of ETH should speak for themselves for themselves.

I personally view it again as a call option on money. I'm not not a call option on I mean, I think the network's going to grow. Obviously, I like the staking yield. Obviously, I like the censorship resistance of the asset. But um but if and when it re-prices the money, there's I mean we think it's a 100x in it. So, like that's that's worth holding on to forever. But not all players have to. So, so that's the thing. I mean, if banks and asset managers want to use Ethereum, we don't once tell them that oh you have to hold ETH as an asset. I think ETH ETH should be the byproduct of people saying this is the winning network. This is where all the assets are. I want to own a piece of the internet. I can actually do that by holding um the underlying asset

and earn some yield on it and it's a good store of value. That'll take time, but no we it's there's something in it for everyone. The only way to participate in the Bitcoin network is to own BTC. We don't want that to be how ETH is defined, too. You can build smart contracts, you can hold just USDC, you can trade, you can upgrade operations, you can bring RWs on, but you can also hold this wonderful asset as a call option that could re-price to to to where Bitcoin and gold are. >> Cool. Um I guess uh I have a question final question. We we got just under a minute here. Um Clarity Act, any predictions?

Do you think we're going to get the green light? >> It was pretty wild that a year ago, coming up on a year ago, we got to testify in front of Congress on the Clarity Act. And it was one it was one of the first times Ethereum had been um in the political spotlight. And so, a year later we're hopefully close to the finish line and um I think it'll get there. I think it'll get there. I think the important point is it doesn't matter too much for the Ethereum ecosystem because we have genius, we're already in law, you already have most stablecoins um happening on Ethereum and and blockchains are bipartisan technology infrastructure that that that are going to span beyond this political regime. It would be nice if the Clarity Act passed

cuz it'll just it'll give a lot more regulatory clarity. You'll see a lot more adoption come in, but and I think it will pass and I think there's a lot of political momentum, but I think Ethereum transcends all of it. >> Awesome. Thank you, everyone. Vivek Raman. >> [applause]