Former Ethereum Foundation Core Researcher: What needs to be more decentralized is Wall Street, not the crypto community.

The most surprising discovery for me is that Wall Street actually has a strong demand for decentralization.

This sounds counterintuitive. We, the cypherpunks and crypto natives, care about decentralization, but the general public seems more interested in trading stablecoins on Binance or chasing meme coins on-chain. It seems like no one cares about this? But Wall Street does.

Danny Ryan is a co-founder of Etherealize and a former core researcher at the Ethereum Foundation. He shared profound insights at Devconnect ARG 2025 after transitioning from protocol development to institutional applications.

Introduction: From Protocol Research to Viewing the World Through a "Banking Lens"

Long time no see. I missed the last Devcon, and that was all I could say about Ethereum at the time.

I have been working in the field of decentralized systems for nearly a decade, focusing on building Ethereum, researching mechanism design, decentralization, security, and resilience. Now, I deal with banks every day. It's a bit strange, but actually very interesting. I've learned a lot, and they have learned a lot from us too. For example, I was surprised to find that people still frequently use business cards; everyone is using LinkedIn, although I haven't registered on LinkedIn yet (I'm pretty sure my colleagues are not too happy about that), but Wall Street still relies on these tools.

Speaking of Wall Street, "Wall Street" is actually no longer on Wall Street. Aside from the New York Stock Exchange still being there, most other institutions have moved to Midtown Manhattan.

Current Situation: Extreme Inefficiency in Traditional Financial Markets

We usually think that institutional markets are very efficient; you might think that online instant trading is easy, but in reality, stock trading takes a day to settle (T+1), and that is already the most efficient market. If you look closely, you'll find that the institutional market is full of inefficiencies and a lot of manual steps.

On a technical level, it is extremely fragmented. An asset manager might use one software to manage positions, another for settlement, and a third for compliance, with complex integrations required between these software. It's like a disastrous software stack pieced together like "Frankenstein." Some institutions even still send faxes to each other. Settlements and other key activities take too long. Bond settlements take two days, which is still considered a "huge victory" from the upgrade from T+3 to T+2 ten years ago.

In the world of Ethereum, transactions and settlements happen simultaneously, which is our inherent advantage.

Traditional systems are full of intermediaries and systemic counterparty risk. This architecture has persisted for over a hundred years, merely layering laws on top of paper and then on top of intermediaries. From an anthropological perspective, it's a miracle that they could build such a system. But now we have better technology, and it's time to fix it.

Core Insight: Institutions Actually "Thirst for" Decentralization

The most surprising discovery for me is that Wall Street (referring to institutions in general) actually has a strong demand for decentralization.

Eliminate Counterparty Risk: One of the main perspectives for institutions is "Who will screw me over?" From trading partners to associated banks to infrastructure, there is risk at every layer. Decentralization and credible neutrality at the infrastructure layer can greatly reduce or even eliminate this risk.
Uptime: This is crucial. They demand 100% online availability. Ethereum can achieve this because there are dozens of clients and thousands of nodes running. This is not accidental; it is a deliberate design.
Scarce Crypto Economic Security: There are very few decentralized systems in the world that can support the security of "trillion-dollar" asset classes. I'm not talking about the few hundred dollars in the hands of countless retail investors, but about global assets totaling hundreds of billions to trillions of dollars. You can't just launch a system tomorrow and have that level of security. Ethereum possesses this scarce resource.
Mature Application Layer: Ethereum has been running for ten years. If you talk to banks, as long as they understand a bit about blockchain internally, they are referring to EVM and Solidity. They need mature security standards and application standards, not the latest trendy software that will appear tomorrow.
Privacy: This is something I value highly. Establishing privacy for institutions is the "Trojan horse" that drives the overall privacy narrative of blockchain. For institutional adoption, privacy is table stakes, not just a cool feature. If privacy issues are not resolved, market upgrades cannot be discussed. Because when Institution A and Institution B trade, they cannot directly expose their positions, which goes against market operation principles. Fortunately, Ethereum has invested billions in applied cryptography (especially zero-knowledge proofs), and our investments in scalability (compressed computation) have unexpectedly brought privacy protection benefits.
Network Effects and Liquidity: Capital tends to flow to where capital is concentrated. With the widespread adoption of stablecoins, Ethereum is far ahead in this regard.
Modular Infrastructure (Layer 2): This is very important. When I explain Layer 2 to institutions, they are very receptive. Banks want to build customizable, scalable systems, but they also want these systems to connect to Ethereum, the value internet.

When you truly engage with institutions and fill the cognitive vacuum, you will find that Wall Street needs Ethereum.

Real World vs. Speculative World

As a developer, it can sometimes be frustrating. You work hard to build unstoppable, decentralized systems, yet you see people chasing meme tokens issued by multi-signature wallets controlled by "three guys in a basement." You might worry that no one cares about decentralization.

But the demand for decentralization from institutions is actually a window into the real world. If it's just speculation, people really don't care; but if it's about putting pensions and property contracts on-chain, the real world will force the need for decentralization. In these scenarios, security must be at least as good as, if not better than, existing systems.

Strategic Shift: From "Simply Explaining" to "Building Better Products"

The Ethereum community is very good at building infrastructure and mechanism design, but we need to move beyond the mindset of "just build it, and they will come."

We cannot just explain to institutions why they need decentralization. We need to force global assets onto the chain. How do we do this? Not through mere tokenization, but by building systems that are so much better than existing systems that global assets have to move on-chain.

The value proposition can be divided into two phases:

Simply Better: Faster, cheaper, no need for trusted intermediaries, more user-friendly interfaces.
Extended Ecosystem: Programmable assets, DeFi composability, etc.

We often focus too much on the second point, but we need to spend more time on the first point. Current institutional products, while elegantly designed and powerful in reporting, still have their underlying systems stuck in the Stone Age. By leveraging the characteristics of blockchain (such as atomic settlement), we can make products fundamentally better. Only by excelling at the first point can we attract long-tail assets into the innovative realm of the second point.

Measuring Success: Trillions of Assets and Market Evolution

We should measure success in terms of "trillions." Currently, the so-called RWA (Real World Assets) on Ethereum is about $18 billion. By the way, when you talk to institutions, they don't call it RWA; they just call it "assets." The global asset management scale is estimated to be $120 trillion, and if we want to put the global economy on-chain, we must target institutional capital.

Another measure of success is influence and market evolution.

This includes two phases:

Rewire: Utilize Ethereum and Layer 2 to program settlement rules and eliminate manual checks. For the institutional market, Ethereum is actually "fast" (compared to T+1 settlement).
Evolve: Expand market access. The current market has a high barrier to entry, sometimes due to legal reasons, and sometimes purely to create a closed-circle game. But through on-chain products and DeFi, we can allow more people to participate, which is a positive-sum game. Institutions want to manage more assets, and the public wants access to financial products.

Conclusion: The Most Important Work

I enjoy working on the most important problems. Currently, I am dedicated to institutional adoption at Etherealize every day. This includes filling the cognitive vacuum, explaining why institutions should not use those "privacy chains" that lack DeFi, are strange, and closed, but rather build on Ethereum.

We need to truly build, design private environments, and understand the complexities of asset flow, law, and compliance. If we don't, we will hand over the global economy. If we want to change the world, it's time to bring the world onto Ethereum.

Live Q&A Session

Q1: What is the biggest misconception about Ethereum's decentralization when talking to institutions?

Danny: Institutions are becoming increasingly aware; they have a kind of FOMO (fear of missing out), worried that Fintech will take their lunch. The main misconception might be that "decentralization" means "lawlessness" or "uncontrollable access." In reality, the on-chain environment is highly programmable, and you can set rules. This fear is transforming into concerns about being left behind, which is a great opportunity for builders.

Q2: What advice do you have for developers looking to enter the institutional space?

Danny: Just as understanding the Ethereum tech stack is difficult, Wall Street is also a complex beast. My advice is: find a partner. Find someone who has traded on Wall Street but wants to learn about decentralization, and team up.

Q3: With increasing adoption, is there a risk of Ethereum being "co-opted" by institutions?

Danny: Of course. We need to introduce global assets while maintaining Ethereum's core resilience, distribution, and globalization. As long as we retain the ability to "fork," there is a risk. I'm not an "ossificationist"; I believe we have a lot of work to do, but we must be very careful in the process of introducing assets.

Q4: How can we ensure the correct narrative is conveyed in front of institutions?

Danny: We need to form a collective effort. The establishment of the Enterprise Group by the Ethereum Foundation is a great first step. However, this involves hundreds of key companies and trillions of assets, and we cannot go it alone. We need to unite in narrative and education to ensure our voices are heard at negotiation tables around the world.

Q5: Is there anything you know now that you wish you had known at the beginning?

Danny: The translation of language. For example, when I talked about "RWA" with the former head of oil business at JPMorgan, he simply didn't understand because, for them, it just means "assets." Also, "Atomic Settlement" is a concept they don't have because, in traditional finance, asset delivery and payment are often separated (even intentionally delayed to earn interest). We need to learn their language and provide the correct "translation" for them.

Q6: What can really impress institutions?

Danny: Layer 2 (L2). This really resonates. Compared to swimming in a large public pool, institutions love the idea of having sovereignty (building L2 themselves with partners) while also connecting to the Ethereum ecosystem.

Q7: How do you view collaboration within the ecosystem?

Danny: Over the past year, I have been too focused on working hard, and collaboration has decreased, which needs to be reflected upon. As global assets move on-chain, it's not just about infrastructure; every part of the ecosystem, including DeFi, on-chain lending, capital formation, and compliance stacks, needs to be fully utilized. Everything we have built over the past few years is for this moment.

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