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Investors have not fully recognized the potential of Ethereum (ETH) to replace Wall Street’s outdated settlement infrastructure, which SharpLink CEO Joseph Chalom and EigenLayer founder Sreeram Kannan elaborated in a Sept. 15 Milk Road podcast discussion.
Chalom, who once led BlackRock’s digital asset program, outlines the fundamental frictions that exist in traditional finance.
The current system requires a settlement cycle of days, which creates counterparty risks and forces market participants to provide collateral for overnight financing, while intermediaries draw profits from these inefficiencies.
He said:“The current ecosystem is quite inaccessible and friction-filled, where intermediaries collect rent.”
The CEO of SharpLink then compared this situation with Ethereum’s atomic settlement capability, which can execute transactions in seconds without counterparty risk.
He believes that Ethereum represents a“Emerging, fundamental new public infrastructure, almost like the Internet in the Web1 era, is an investment category.”He positioned the blockchain as a universal settlement layer for financial and economic systems.
The programmable nature of Ethereum makes it possible to rebalance portfolios through smart contracts, distribute dividends in minutes rather than days, and implement combo-able trading, allowing any asset to trade with any other asset at any time.
Chalom describes these abilities as the “winning weapon” for institutions seeking to surpass the efficiency of the current system.
Kannan extends this vision beyond the financial sector, which he describes as“A platform that can verify trust”,Resolve counterparty risks through cryptographic verification rather than relying on institutional guarantees.
He noted that EigenLayer enables Ethereum to support networks other than the underlying protocol, explaining that “verifiability is the cornerstone of society itself.”
He mentioned artificial intelligence proxy verification, forecast markets such as Polymarket, and autonomous systems that require trust without manual supervision as application examples.
Both executives highlighted the transition from education to acceptance that institutional investors are undergoing.Chalom pointed out that while Bitcoin needs to explain the concept of digital gold, Ethereum needs deeper infrastructure explanations, which takes more time, but stronger beliefs will be generated once understood.
The launch of the Ethereum ETF in July 2024 marks a turning point in acceptance, and financial management companies have accumulated approximately US$14-15 billion in ETH positions.
Chalom predicts that as institutional participants recognize the productive asset characteristics of Ethereum through staking and DeFi returns, their accumulation rate will exceed MicroStrategy’s accumulation pace of Bitcoin.
