Ethereum Advocate Warns Private Blockchains Could Trigger a “Race to the Bottom”

A fresh wave of private, permissioned blockchains is facing pushback from supporters of open networks like Ethereum. Vivek Raman, co-founder and CEO of Etherealize, a firm working to bring traditional finance onto Ethereum, warns that closed systems risk becoming isolated networks unable to communicate with one another, undoing much of what blockchain technology was built to solve.

Etherealize was seeded by Ethereum co-founder Vitalik Buterin and the Ethereum Foundation in January 2025 and later closed a 40 million dollar Series A round.

History Repeating With New Consortium Chains

Raman points to networks like Digital Asset’s Canton Network, Circle’s ARC payments system, and Stripe’s Tempo blockchain as examples of a returning “consortium chain” trend. He draws comparisons to R3’s 2016 banking consortium, which lost major members including Goldman Sachs, Morgan Stanley, and Santander within the same year, along with similar enterprise interest once seen around Hyperledger.

“It’s like we’re having consortium chain 2.0,” Raman said, predicting these private networks will end up competing against each other rather than achieving lasting adoption.

Comparing Ethereum to Internet Infrastructure

Raman likens Ethereum’s open mainnet to HTTP, the internet’s base protocol, with more secure, private systems functioning like HTTPS layered on top. He argues permissionless infrastructure should remain the foundation, with privacy and customization added at the application or network layer rather than restricting the base system itself.

Not Everyone Agrees Decentralization Is the Priority

Christian Catalini, founder of the MIT Cryptoeconomics Lab and former chief economist of Facebook’s Diem project, offers a different view. He says the fast growth of curated, sponsor-led networks suggests the market may not be prioritizing decentralization at all.

“This phase is all about enterprise sales,” Catalini said, adding that if the industry settles around networks controlled by a single anchor entity, many of the competitive advantages blockchain promised could disappear entirely.

BlackRock’s Ethereum Activity Seen as a Signal

Raman points to BlackRock’s growing presence on Ethereum as proof that institutional interest is shifting toward open systems. After launching its BUIDL token on Ethereum ahead of regulatory clarity, the firm’s newer funds now comply with the GENIUS Act, the current U.S. framework for stablecoin regulation.