The goal of transforming traditional finance with Ethereum does not necessarily have to be achieved through DeFi.
Written by: Eric, Foresight News
Fortune magazine reported on the evening of September 3, Beijing time, that Etherealize has completed a $40 million financing round, led by Electric Capital and Paradigm, with participation from Ethereum co-founder Vitalik and the Ethereum Foundation. Electric Capital and Paradigm are known for their significant investments in the Web3 space, especially within the Ethereum ecosystem, and both are major supporters of Ethereum DAT listed companies. However, it is rare for both Vitalik and the Ethereum Foundation to be directly involved.
Etherealize is quite reserved in its self-introduction, describing itself on X as "an institutional-grade product, BD, and marketing department of the Ethereum ecosystem," while its website only states its vision of "remaking Wall Street" and "bringing the world to Ethereum through research, content, and products." In terms of products, Etherealize targets institutional-grade infrastructure, offering issuance, management, settlement of tokenized assets, and corresponding automated compliance infrastructure, with plans to introduce privacy features through zero-knowledge proofs.
According to Etherealize, it has a well-informed engineering team that understands Ethereum, a leadership team with decades of experience in financial institutions, and channels to engage with the SEC, Treasury, and Congress to formulate regulations. Western investment institutions have traditionally been generous in betting on large B2B businesses, but the substantial financial investment in such a startup is clearly a "people investment," and I have noticed some clues from the team composition.
The most notable member of the Etherealize team is co-founder Danny Ryan, who made significant contributions to The Merge and the Ethereum Beacon Chain but left the Ethereum Foundation team in September last year. In a farewell letter on GitHub, Danny Ryan stated that his departure was for personal reasons; perhaps at that moment he realized that merely nitpicking on technical aspects would not advance Ethereum further, and that a team capable of assisting in bringing Ethereum to the world through its technical capabilities was the right answer.
On the technical side, Etherealize's co-founder and CTO Zash Obront was a co-founder of Scribe Media, which provided book publishing services, and joined Snowcap Technology as a security researcher in August 2021. This company focuses on security, offering services in AI, VPN, WIFI, and enterprise systems.
The other two founding engineers responsible for technology also have impressive backgrounds. Alec Charbonneau was previously a product manager at Circle, known as the "first stock of stablecoins," and later worked as a software engineer at Stellar, which focuses on settlement like Ripple. Another engineer, Alex Wilton, worked as a product manager at Tesla and at Rivian, another electric vehicle company that raised over $10 billion in funding in 2021.
The resume of product CEO Jay Katz is closely related to strategy; he has worked in finance, software, smart hardware, law firms, and consulting companies. LinkedIn shows his actual position as CEO of lending market solutions. Working alongside him is credit operations manager Jennifer Laino, who has extensive experience in the financial industry, having served as an assistant vice president at Lehman Brothers, a vice president at Bank of America Merrill Lynch, and a consultant at Blackstone Group.
Co-founder and CEO Vivek Raman also has many years of experience in financial lending, having served as a credit business executive at Morgan Stanley, UBS, Deutsche Bank, and Nomura, and joined Celsius as a senior DeFi researcher in September 2021, during the bear market of 2022. Afterward, Vivek Raman became the general manager at BitOoda, a digital asset investment bank that completed its Series A financing in early 2023, focusing on bringing institutions into the Ethereum and L2 ecosystem.
Clearly, Etherealize's plan to "bring Wall Street to Ethereum" initially targets the credit sector. I speculate that its path to realization will involve launching on-chain lending systems combined with stablecoins. Of course, such products differ from DeFi and may only provide solutions for financial institutions.
In terms of market and operations, Etherealize has chosen candidates with more experience in the Web3 space. Marketing director Valeria Salazar previously served as the marketing strategy director and developer and ecosystem relations director at Phi Labs, while business operations manager Morgan Takach was the strategic and operations director at Polyhedra.
Etherealize's description of its team as having rich experience in both Web3 and finance is not unfounded, as it coincidentally captures the trend of institutions attempting asset tokenization. The narrative of reshaping finance with Ethereum is a story that has been told since the beginning of DeFi Summer. Even as traditional institutions are testing the waters of asset on-chain, we still cannot determine the market size of this business, but building a bridge between Ethereum and Wall Street is a direction worth exploring for Ethereum.
In addition to specific business operations, Etherealize has also clearly expressed its desire to act as an "ambassador" for Ethereum, promoting the adoption of Ethereum and the L2 ecosystem worldwide. Overall, Etherealize is taking over the "go to market" part that the Ethereum Foundation did poorly through a commercial company, and the specific effects are worth looking forward to.
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