The New Frontier of Finance: Institutional Adoption of On-Chain Opportunities

Transcript

Hello everyone. It's great to see you here and be here today with you at the ETC. And looking around this room, it's really easy to forget how recently we lived in the world where big banks and institutions simply couldn't touch what we were building here. For years, crypto was a true walled garden. So, we built inside it, played inside it, and big investors were looking from the sidelines with a mix of curiosity and fear. So, why couldn't they get in? It wasn't just this fear and maybe a lack of interest. It was three structural massive barriers. The first one, of course, is the regulatory uncertainty.

Back in the days, crypto had no legal recognition. And that was an automatic no. However, finally, the legal walls fell and we saw the introduction of the ETPs, which massively opened the door for us here. The new off-balance sheet framework, specifically the shift from SAB 121 to SAB 122, which allowed banks to actually touch digital assets without destroying their capital requirements. The second one is the infrastructure gap because we onboarding a billion dollars isn't that easy as open a opening up as self-custody wallet. And we struggled which with a thing named a cash lag.

Basically, we didn't have a native way to onboard and move fiat onto the blockchain quickly. And traditional funds, they were utilizing a T+1 or even T+2 settlement speed times utilizing the traditional banking world. And that was completely misaligned with the atomic or T+0 settlement speeds of the decentralized networks. And because of the delay, funds, when they wanted to move liquidity, they were experiencing a huge a huge and immense slippage that just destroyed the alpha before the trade has been even executed.

And the next thing, of course, is a cultural mismatch because we build the peer-to-peer infrastructure to escape the banks, but as the institutions are joining the party right now, the tables have turned. However, we still have this duality even today with the digents. They're looking for like 500% APR products and for institutions it's just like a Ponzi scheme and they're looking for a stable 4 5% yield. And for digents it's just it's just a waste of time. However, we must admit the growth and the maturity within this phase as uh we grew from 35 65 million of users worldwide crypto owners to 700 million

in 2025. The uh geographical locations is also matured and changed because it's not only the western financial hubs, but the crypto adoption index mentioned the India, US, and Indonesia at the very top of the list of the adopted nations. And surely we don't need to forget about the APAC region who grew by 69% year-over-year. And because of this growth and maturity blockchain showed and the whole industry showed that it's a core part of the global financial economy and forced traditional finance at least to pay attention. And here we are the bridging moment, the moment where basically crypto enters the real institutional

finance and it stands on firmly on three main pillars. The first one compliance, of course. As I mentioned, no compliance, no conversation at all. And we saw the introduction of the in the US the genius act for stable coins clarity act for the basically laying the guardrails for the legislative part. The Europe sets the global standard with Amiga full in force, but this is not something isolated for US and UK only US and Europe only, but we are seeing according to the theorem labs about 70% of global jurisdictions.

They advance new stablecoin frameworks just last year and 80% of those actually publicly announced a new digital asset initiatives for this year. So whole global regulatory landscape is moving in unison. The first the second one would be once compliance is set, infrastructure is very important because without the scale of the safe and scalable infra, institutions won't move. We matured from creating, you know, like a simple cold storage wallets to an institutional grade MPC solutions that finally allow lines with the requirements of the tradfi entities and institutions. And that's the allowed us to have this moment of

the stablecoin stablecoin revolution. In 2024 alone, the global market cap for the stablecoins reached from 130 billions to 160 billions. But the real story is the volume because in this year, the stablecoins settled for over 46 trillion dollars. The traditional giants like Visa and MasterCard, they're actively integrating this networks the stablecoins because the B2B payment efficiency of the stablecoins is just undeniable. And for us here at the Ethereum CC, it's really important to understand where all of this actual volume is settling down because the Ethereum

market cap for the stablecoins surged from 475 billion dollars. And basically that proves and underscores Ethereum's role not just as a smart contract platform, but as a prime global settlement layer for the tokenized dollar denominated assets. We're seeing the Wall Street joining the party and uh BlackRock flagship tokenized fund Bito. They didn't just launched a huge money market vehicle, but they allowed an on-chain trading through the Uniswap X.

The JP Morgan also launched their tokenized fund CD Ethereum directly with a hundred million dollars. So, basically they're not looking and just checking in the DeFi, but they're actively plugging into the DeFi. And once the compliance is set, infrastructure is laid, we have is it worth it question. And what we see right now is the staking side because it offers an auditable and predictable returns. This is something that traditional finance actually looking for. However, we we must admit that Ethereum native compressed from 4.8% to about 3% right now, but this is the sign

of rather maturity not the weakness because in traditional finance the lower yields on base layer assets actually indicate high trust, deep liquidity, and of course institutional consensus. And this 3% yield on Ethereum kind of like we can call it a new internet bond. Um and at Everstake we understood this pretty early on because right now institutions are flocking to reputable reputable yield providers. And right now we secured more than 7 billion of digital assets within the staking side and within more than 130 networks. And what's most important for our institutional clients is that we're offering apart from native staking on

Ethereum, of course, we're offering a 10% yield for a USDC and USDT on Ethereum. Basically, zero-slashing compliance grade infra created for the traditional compliance officer to feel secure and confident. However, we're still in the moment where it's not all smooth sailing till this moment. We still have some problems. Uh DeFi is pseudonymous, and uh institutions, they need to know their counterparty. They're legally obliged by the FATF travel rule, the MiCA's stringent AML provisions. And here is the anonymity paradox. How do we comply without destroying this permissionless nature of the blockchain? Um and uh what

we're seeing right now, the holy grail for the uh traditional compliance is the native zero-knowledge technology. ZK uh solves the GDPR and AML paradox simultaneously. It allows to check the compliance without destroying and exposing the proprietary trading data or client identities on a public ledger. Uh and every uh and Ethereum right now is undergoing massive changes in 2026 to match this updates. We're seeing under the layer one ZK EVM uh roadmap, the new proposal EIP 8025, which

uh basically rearrange whole protocol pairing from re-execution to verification. What we have right now is that every single node must re-execute every single transaction, and that creates a computational bloat. And uh after this proposal, everything will be changed because instead of running a complex and heavy execution client, you can just uh validate you can just opt to to become a ZK attestors. Verify compact zero-knowledge proof and uh check the cryptographic milli cryptographic stamp within the milliseconds. And of course, as we're securing here a 300 billion network, Uh that needs to follow the highly secure three of five multi-prover threshold before the block is accepted.

So, basically, we as we are pushing the complex and heavy computation to a specialized provers while leaving the verification incredibly light for the uh verification and um for the home nodes, Ethereum is dramatically cutting those expenses and requirement tech requirements. And having this upgrades helps to run this complex and heavy ZK identity smart contracts cheaper, easier, and natively more scalable. Uh the next problem is the smart contract risk. And in crypto, we love to take what is law.

Uh and for institutions, it works perfectly well until it doesn't, until the hack happens. Because by December 2025, the whole amount of the exploits reached the number of 6.7 billion dollars. And in 2024 alone, we had 2.5 billion dollars exploited across 160 different separate cases. And to put this into perspective, CertiK reported that out of that 2.5 billion, a mere 200,000 was successfully recovered. And we're seeing the escalation of the severity of the exploited exploits. And because of this level of systematic risk, um decentralized finance market is failing

to keep the pace. However, the market actually grew to 3 billion dollars last year. It still covers less than 2% only. And because of this coverage gap, institutions are kind of like delaying mass adoption because they need this coverage to be closed. At every stake, we're not an kind of like an insurance provider, but for our clients on the staking side, we're offering also risk and slashing coverage to match this needs at our level at least. And the third one is the operational frictions because everything is still kind of like fragmentated.

Managing multi-six and then integrate integrating that within the legacy corporate frameworks, it's a nightmare for a traditional CEO. And frankly speaking, it's actually a nightmare for crypto native teams. The perfect example on my side that staking is the closest one for me is that our clients, they're having dozens of different blockchains. And within each blockchain, they have dozens of different wallets for staking, holding, or on-chain operations. And to have to manage everything, it's an additional operational lift. And we also have this problem internally. And our data science team, they had to create custom dashboards and reporting in order to

consolidate this data and have everything in one place. Because if you don't have a consolidated data, it's really hard to integrate that within the legacy accounting softwares. But we're seeing that the market within this segment is booming right now. As we're seeing a lot of products that are actually targeted to to solve this problem of fragmentation. And despite all of these frictions, we're going to the convergence moment. The moment when all of the line just blur.

And if you want to understand this future, you just need to listen to the traditional titans themselves as the Goldman Sachs CEO David Solomon recently mentioned that he now holds a small portion of BTC and he's watching the market but for a much larger reason as a part of a massive shift within the finance technology. We're seeing that the institutional adoption is changing, how it's shifting basically how we are approaching the cycle also. Because we're going away from the traditional four-year cycle and where we had, you know, like this retail momentum chasing cyclical draw downs. Instead, we're entering actually a more steadier and sticking institution

institutional buying. So, officially digital era has made the way for the institutional era. And at this changes are being cemented at the very top of the financial world. The Basel Committee recently announced the fast-track reassessment of its strict and prudential rules because previously and right now actually the banks are obliged to keep a one-to-one capital against the their crypto exposure. The rule that made crypto adoption prohibitively expensive. And this rule is being softened and rewritten right now. And if you want to understand what you will have in the very near future, you just need to look at the Switzerland because Switzerland

is in a full-blown acceleration phase for the digital adoption. They have they're leading basically the world with 20 banks offering crypto services, outpacing UK, US, Germany. 28% of their retail oriented banks right now offering digital asset services and the crypto eligible accounts skyrocketed from 5,000 to 2.5 million of users and crypto owners. And the demographic also changed. So, from ultra-wealthy individuals to everyday middle class.

So, banks who were watching from the sidelines before, they're actively tapping in and rushing in right now. And in this new frontier, how institutions will be looking at the yield where they need to consume this yield. As I mentioned before, staking is one of the preferred solutions here because predictable, auditable returns, risk-adjusted and pristine rewards. And what we are seeing right now is from the moment of the merge, basically we grew from 11% of the total supply staked to 30% or 76 billion Ethereum staked.

That's about 30% of the total supply. However, institutions, they won't you know, like try to get an understanding of how validator operations will works and to figure it out. And staking and yield operations future is basically in abstraction and integration. Staking operations will they will be left with validators like Everstake and the peers, but it will be abstracted within the known investment formats. The underlying will be a bit different, but the actual picture will be the same as we are actually accustomed to. And the questions regarding the

tokenization, because this is the next one that we're having right now. And Ethereum is leading here with 34% of the whole real-world asset market. We're having a huge growth from 8 billion to a 30 billion dollars for the whole market and Ethereum takes 17 billion dollars of that cut. And Standard Chartered also is projecting it 2 trillion in tokenized RWAs by 2028. And you can imagine what part of that tokens will be issued right here on Ethereum. In the near future, investors, they won't just ask like, is it DeFi or TradFi? They will just ask, is it compliant? What is the risk and

what is the yield? And the ultimate goal the ultimate goal for us here is to make the infrastructure invisible. Blockchain is becoming the invisible back end of reality and at Everstake we believe that the question is no longer if they will adopt blockchain, but who will build this trust infrastructure they require. And in this new frontier transparency isn't just a product isn't just a feature anymore. It is the product. Thank you.

Maybe if any questions? All good then. Thank you. Thank you. Have a good ETC. Great. Thank you.