Ethereum is not perfect, but is it Wall Street's only solution?

Ethereum: Imperfect, but the Optimal Solution

Ethereum co-founder Vitalik Buterin, along with his foundation, Electric Capital, and Paradigm, is backing Etherealize’s $40 million launch—a startup with a single mission: to reinvent Wall Street on top of Ethereum. (© 2024 Bloomberg Finance LP)

Every day, Wall Street’s financial system processes trillions of dollars in capital flows—much of which still runs on systems built decades ago. Mortgage and bond trades can take days to settle. Intermediaries add layers of cost, tie up capital, and amplify risk. For the world’s largest banks and asset managers, choosing the wrong technological infrastructure could lock in a new generation of inefficiency. Blockchain technology could change this. But the question is, which blockchain is the best choice?

Critics argue that Ethereum is slow and expensive, while competitors claim higher throughput. Moreover, fintech giants are even starting to build their own blockchains. However, Danny Ryan, Etherealize co-founder and president, and a core architect of Ethereum’s evolution, led the historic “proof-of-stake” Merge project. He insists that Ethereum’s security, neutrality, and cryptographic privacy make it uniquely suited to bear the weight of global finance. Yes, Wall Street needs to be reinvented—Ryan believes Ethereum is the only blockchain that can do it.

Ryan has worked at the Ethereum Foundation for nearly a decade, closely collaborating with Vitalik Buterin and shaping the protocol at its most critical turning points. Now, with Etherealize having secured $40 million in investment from Paradigm, Electric Capital, and the Ethereum Foundation, as well as initial funding from the Ethereum Foundation, he is convinced that Ethereum is ready to enter the Wall Street market.

Ryan’s answers—frank, precise, and somewhat surprising—go far beyond crypto hype, but he also elaborates on why Ethereum may be the safest choice for reinventing the financial system.

Etherealize co-founder and president Danny Ryan believes Ethereum is the only blockchain with the security and neutrality to reinvent Wall Street.

Security Is a Scarce Resource

I started with an obvious question: Given Ethereum’s congestion and high fees, why would Wall Street trust it?

Ryan didn’t hesitate: “Crypto-economic security is a scarce resource.” In proof-of-stake systems, validators must lock up capital to make attacks prohibitively expensive. Today, Ethereum has over one million validators and nearly $100 billion in total value staked. “You can’t achieve that overnight,” he added.

By contrast, newer blockchains can create faster networks but often rely on a handful of institutional backers. “That looks more like a consortium model,” Ryan explained. “You trust the companies, contracts, and legal recourse involved. That’s a different kind of security guarantee. It’s not the same as maintaining a neutral global network involving tens of billions of dollars.”

The data backs him up. According to Etherealize’s latest research, Ethereum secures over 70% of stablecoin value and 85% of tokenized real-world assets. If security at scale is critical, Ethereum undoubtedly has the edge.

The Ethereum network has over one 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: Promises and Mathematics

Privacy is another key issue. No bank would put client transactions on a fully public ledger. Is this also why projects like Canton, backed by major financial institutions, are getting attention?

Ryan’s answer was sharp. “Canton relies on an honesty assumption—trusting counterparties to delete sensitive data. That’s a sleight-of-hand approach to privacy. With cryptography, you can fundamentally solve the privacy problem.”

He’s referring to zero-knowledge proofs (ZKP), a field of cryptography developed long before blockchains, but now deployed at scale on Ethereum. ZKPs have become the backbone of “rollups,” a technology that compresses thousands of transactions and settles them on Ethereum. The same technology is expanding into privacy: enabling selective disclosure, so regulators can verify compliance without exposing all transaction details to the market.

“You solve privacy with mathematics,” Ryan added—a phrase that feels like a guiding principle for how Ethereum meets institutional requirements.

Institutional finance requires confidentiality. Ethereum’s zero-knowledge tools aim to guarantee privacy through cryptography, not intermediaries. (getty)

Modularity: Institutions Control Their Own Infrastructure

I pressed him on Ethereum’s architecture. Compared to Stripe and Circle now trying to build streamlined blockchains from scratch, isn’t Ethereum’s architecture overly complex?

Ryan countered that what appears complex is actually an advantage. “Institutions like the L2 model,” he explained. “It allows them to customize infrastructure while inheriting Ethereum’s security, neutrality, and liquidity. They can control their own infrastructure while still tapping into global network effects.”

He pointed out that Coinbase’s Base network is a proof of concept. Built on Ethereum’s L2, Base generated nearly $100 million in sequencer revenue in its first year, demonstrating both economic viability and institutional scale.

For Ryan, modularity isn’t a technical detail—it’s a blueprint for how institutions can build their own blockchain infrastructure without losing the benefits of a shared network.

Ethereum’s scaling strategy combines rollups with data availability sampling—a path aiming for over 100,000 TPS without sacrificing security. (getty)

Neutrality and Throughput

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

Ryan reframed the question. “When financial institutions consider blockchains, they don’t just ask ‘How fast is it?’ They also ask: Can this system execute correctly and stay online, and who do I have to trust? On Ethereum, the answer is: you don’t have to trust anyone.”

This is what he calls “credible neutrality”—a guarantee that the underlying protocol won’t favor insiders. Ethereum has never had a day of downtime since 2015—a record worthy of recognition in financial systems.

As for scalability, Ryan referenced the roadmap set by Ethereum co-founder and chief architect Vitalik Buterin. He emphasized that the key is capacity coming from the aggregation of many L2s running on Ethereum, not a single chain. Today, this already means the entire system can process tens of thousands of transactions per second—and with upcoming upgrades like data availability sampling, Ryan says total throughput could break 100,000 TPS within just a few years. “Scalability is here—and without sacrificing trust,” he said.

As Wall Street’s financial rails modernize, the real question is which blockchain can meet institutions’ needs for scale, security, and privacy. (SOPA Images/LightRocket via Getty Images)

The Bigger Picture

Ryan doesn’t claim Ethereum is perfect. His point is that only Ethereum combines the advantages institutions truly care about: security, privacy, modularity, and neutrality.

Stripe, Circle, and others may try their own blockchains. But Ryan insists they’ll 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: build on the island of proprietary systems, or tap into a neutral global network that has proven its resilience for a decade? Ethereum’s underlying architecture may not be the fastest blockchain, but for Wall Street, it may be the safest choice—a rapidly scaling architecture that guarantees privacy through mathematics, not promises that institutions might break.