Ethereum has the potential to replace Wall Street infrastructure, yet remains undervalued
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Ethereum has the potential to replace Wall Street infrastructure, yet remains undervalued
Ethereum represents an emerging, fundamentally new type of public infrastructure, almost like the internet during the Web1 era, as an investment category.
Navigating Web3 tides with focused insightsBy: Blockchain Knight
Investors have yet to fully grasp Ethereum's (ETH) potential to replace Wall Street's outdated settlement infrastructure, a point highlighted by SharpLink CEO Joseph Chalom and EigenLayer founder Sreeram Kannan during a Milk Road podcast discussion on September 15.
Chalom, who previously led BlackRock’s digital assets initiative, outlined the fundamental frictions present in traditional finance.
Current systems require multi-day settlement cycles, generate counterparty risk, and force market participants to post collateral for overnight financing, while intermediaries profit from these inefficiencies.
"The current ecosystem is quite inaccessible and friction-laden, with intermediaries extracting rent," he said.
The SharpLink CEO then contrasted this with Ethereum’s atomic settlement capability, which enables transactions to settle in seconds without counterparty risk.
He described Ethereum as an "emergent, fundamentally new type of public infrastructure—almost like the internet in the Web1 era—a new asset class," positioning the blockchain as a universal settlement layer for financial and economic systems.
Ethereum’s programmability enables portfolio rebalancing via smart contracts, dividend distributions within minutes instead of days, and composable transactions that allow any asset to trade with any other at any time.
Chalom described these capabilities as a "killer feature" for institutions seeking efficiency beyond today’s systems.
Kannan extended this vision beyond finance, describing Ethereum as a "platform for verifiable trust" that solves counterparty risk through cryptographic verification rather than institutional guarantees.
He noted that EigenLayer allows Ethereum to secure networks beyond its base protocol, explaining, "Verifiability is foundational to society itself."
He cited AI agent validation, prediction markets like Polymarket, and autonomous systems requiring trust without human oversight as example applications.
Both executives emphasized that institutional investors are undergoing a shift from education to adoption. Chalom observed that while Bitcoin required explaining the concept of digital gold, Ethereum demands a deeper understanding of infrastructure, which takes more time—but once understood, leads to stronger conviction.
The launch of Ethereum ETFs in July 2024 marked an inflection point in adoption, with asset management firms currently holding approximately $14–15 billion in ETH.
Chalom predicted that as institutional participants recognize Ethereum’s yield-generating potential through staking and DeFi, the pace of accumulation will surpass MicroStrategy’s rate of Bitcoin acquisition.
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