Base, Sui…The strategic value and implementation path of compliant public chains

There are two major trends in the crypto industry at present.First, the industry is gradually entering a period of regulatory convergence, and the original pattern of “technology first and supervision lags” is being reshaped; second, the integration of on-chain with the traditional financial industry is becoming increasingly close, and whether it is the issuance of RWA (real world assets) or the on-chain processing of stablecoins and financial derivatives, it has formed an irreversible general trend.

Against this background, “compliance with public chains” has begun to become an important issue, and “chain compliance capabilities” are also becoming the core element for traditional institutions to evaluate their access value.

This article focuses onWhy is public chain compliant, what is compliant, and how is it compliantThere are three issues, and the two strongly compliant public chains are analyzed: Base and Sui, and in this paradigm, Robinhood Chain may be launched by Robinhood in the future to provide reference for readers in public chain selection, business docking and business strategy judgment.

1. Reasons for public chain compliance

As mentioned at the beginning, the necessity of public chain compliance comes from two aspects:First, the regulatory requirements, and second, the user needs.So we might as well ask a few more steps: Why does supervision require public chain compliance?Whose interests have the non-compliant public chain harmed?Why do users want to use compliant public chains?What value can be brought by using compliant public chains?

(1) Why does supervision require public chain compliance?

Regulators in various jurisdictions around the world have several highest priority responsibilities, namely preventing financial crimes (such as money laundering, fraud, terrorist financing), maintaining financial market stability and protecting consumers.These involve the most fundamental trust and security issues of the financial market, and for the United States, it is also related to its national security and global hegemony.

After illegal funds are “whitewashed” on the chain, they will flow into the legal field in a hidden form; cryptocurrency-related fraud and frequent hacking attacks often cause investors’ wealth to evaporate and cause market panic; and if large crypto companies or platforms are stolen due to on-chain loopholes or are fined for violation of relevant laws, they will not only lose huge amounts of funds, but will also directly affect the liquidity of the financial system.

In May 2022, the UST, a stablecoin on Terra (the public chain that focuses on algorithmic stablecoins), was sold out in large quantities, resulting in a dean, and the price of the governance token LUNA fell in an avalanche, with a market value of US$40 billion, affecting millions of users.After that, the famous crypto hedge fund Sanjian Capital held a large amount of LUNA and its assets shrank sharply, and eventually went bankrupt, which affected several trading platforms, causing a systematic crisis in the industry.It can be imagined that if such an event occurs again in the future, it will no longer be a scale of tens of billions of dollars, and its harm may even be comparable to the financial crisis in 2008.

As the crypto world becomes increasingly connected with the traditional financial system, regulators must consider and circumvent the negative impacts it may have.Especially with the continuous expansion of the crypto market and continuous integration into the mainstream financial market, if losses are caused by improper supervision in the future, the consequences can be said to be disastrous.

(2) Why do users use compliant public chains?

Users in the crypto market can be divided into ordinary retail investors and institutional users. Here we mainly discuss the needs of institutional users.Institutional users generally refer to users who do not participate in the crypto market as individuals, usually includingFinancial institutions, corporate users, government and state-owned capital background institutions and Web3 native institutions.

As the infrastructure of the entire crypto industry, the only feasible way for institutional users to deploy on-chain services is the public chain: BlackRock launched its first tokenized fund BUIDL on Ethereum, VISA integrates USDC settlement service merchant payment on Solana and Ethereum, Google provides RPC nodes for Solana, Ethereum, etc., and USDC and USDT are issued on multiple public chains. The first issue that all web3 entrepreneurial teams must consider is to consider which public chain ecosystem to join…

Just as banks will not choose to deploy on the dark web, institutions will not deploy their businesses on a chain of “legal gray areas”.So the premise of all this is compliance, credibility and regulation, otherwise they will never be able to “really go to the chain” because regulators can smash the entire team’s efforts for several years with a lawsuit at any time.

In addition to the inevitable business choices and regulatory reasons, for institutional users, a compliant public chain is nurturing a new round of growth “tickets”.

If a chain can meet the compliance needs of institutions, it can undertake new businesses such as RWA, central bank digital currency, corporate financial applications, etc., enter the trillion-dollar asset market, and directly bring huge amounts of funds from traditional capital such as VC, LP, and banks to make the collective cake bigger; at the same time, modules such as “selective privacy”, “on-chain identity”, and “on-chain credit” will become a new infrastructure layer as supervision gradually becomes a new infrastructure layer, and Depin, SocialFi, and GameFi above it will have a solid soil for development.These areas that have never seen any improvement in the past may break out like stablecoins in the future to achieve a real Mass Adoption.

(III) What is a true compliant public chain

There has been a long lack of clear and unified regulatory standards in the public chain field. Regulators often make judgments on projects based on the Securities Law and the Howie Test, including subjective factors from regulators.During the Biden administration, Ethereum, EOS, Ton and others were strictly regulated, and even the compliance benchmark Coinbase has received SEC subpoena many times.

With the passage of the three major cryptocurrency bills in the United States and the positive statement of the SEC, the “compliance” of the crypto industry is no longer a vague requirement to cross the river.The same is true for public chains.

Although there is currently no unified standard for “public chain” compliance in the United States, multiple laws and bills are forming a gradually clear regulatory framework.But for public chains, if they want their behaviors within their ecosystem to be legal and compliant, they must have the ability to meet these requirements.The strong compliance public chain mentioned in this article all refer to public chains that actively meet regulatory requirements in terms of technology and “consider their preferences and seriously transform”.

Regulatory requirements mainly come from these: includingThe Bank Secrecy Act (BSA), the DAAMLA Digital Assets Anti-Money Laundering Act, the GENIUS Act and the CLARITY Act, the CFTC and the SEC cross-enforcement, FinCEN guidance.

To meet these requirements, they must be embedded into the architecture technically.For example, identity verification (KYC/KYB), transaction auditability, and compliance control in smart contracts.At the same time, it is also necessary to allow on-chain applications to be tested and reviewed in a specific environment, allow authorized regulatory agencies to access necessary on-chain data, etc.

Although the examiner did not clarify the standards, the answers were almost on the table.

2. The current situation and implementation path of strong compliance public chains

Currently, representative projects that are more in line with our definition of “strong compliance public chains” include Base, Sui, and Robinhood Chain that will be launched in the future.Next, we will take a look at what steps these three have done in compliance and how they are done.

(I) Base

As a compliance representative platform for the US market, Coinbase launched the Base chain aims to establish a “regulatory friendly” on-chain ecosystem to provide institutions and mainstream users with a compliant, secure and controllable web3 environment, which complements its exchange business and is also the core of its expansion of its diversified compliance business landscape.In the future, its Web3 business will be in the three core scenarios of finance, identity and asset issuance through the Base chain.It is also because of this that Base has been focusing on compliance since its design.

1. Technical architecture

First of all, in terms of technical architecture.Since compliance is the core, various functions required by regulatory requirements must be taken into account, which requires the public chain architecture to be flexible.Base’s solution is to directly use existing technologies.

Base is built on Optimism’s OP Stack, a modular, pluggable blockchain development framework that provides a variety of modules and components for each public chain built on the OP Stack.

Therefore, you can imagine Base as a highway roadbed that can flexibly assemble “camera, speed limiter, and identity identification system”.For example, if certain compliance requirements are needed, you can customize the scale block and write it to the execution layer.

Coinbase plays the role of “toll station + identity inspector”, becoming a key bridge between off-chain compliance services and the on-chain world.Before entering the Base chain, users must first complete identity verification (KYC) and anti-money laundering audit (AML) on the Coinbase platform.These compliance data will not be directly exposed to the chain, but will be passed into the chain through a set of controlled interfaces. At that time, the user’s wallet address (Ethereum address) will obtain a tag. This tag proves that the user has passed the audit. Then all the user’s on-chain behavior will become traceable, and the on-chain address of Base will no longer be anonymous.

This method of off-chain identity and on-chain activities collaborating essentially builds a “legal highway system”.BASE itself is the infrastructure for running various Web3 applications—on it you can run DeFi protocols, deploy NFT marketplaces, launch chain games, etc.Coinbase ensures that every “vehicle” (user or fund) entering this highway has undergone legal identity review and will not bring about compliance risks such as money laundering and fraud.

By reusing a mature modular framework, Base not only lowers the technical threshold for implementing compliance functions, but also reserves room for adjustment for future response to more complex regulatory requirements.

2. Functional design

The major problem of KYC/AML has been solved, and other regulatory requirements are still to be met.Coinbase’s approach is to develop corresponding compliance functions.

Smart contracts are still smart contracts, but Base has designed compliance channels that support RWA and securities token issuances.Its smart contracts can support the entire process of asset creation, holding, transfer, and redemption.In the future, the response functions of funds such as freezing and destruction of funds proposed in the GENIUS Act and other regulations will also be met.JPMD, an on-chain deposit token issued by JPMorgan Chase, was implemented on BASE, verifying its institutional-level compliance capabilities.

Audit is still an audit, but Base has been audited for longer and plans to provide regulators with standardized APIs or dedicated nodes to facilitate real-time access to on-chain data.These interfaces will be combined with RegTech tools such as Chainalysis to achieve real-time risk control, abnormal transaction identification and address tracking.

BASE introduces both blacklist and whitelist functions.Blacklists can automatically block sanctioned addresses, while whitelisting mechanisms ensure that sensitive assets are only circulated between addresses that have passed compliance audits.In the future, privacy enhancement technologies (such as privacy pool + zero-knowledge proof) may be introduced to achieve compliance while protecting user privacy.

3. Acquisition supplement

In addition, Coinbase has successively acquired several key teams and projects in recent years to strengthen BASE’s on-chain compliance capabilities and data infrastructure:

• Liquifi: Support the issuance of compliant assets and make up for the compliant issuance path of on-chain securities and stablecoins;

• Spindl: Strengthen user behavior tracking and advertising attribution capabilities;

• DeribitEquity investment: Control key data of the derivatives market and strengthen risk monitoring.

Merger and acquisition incidents in fintech companies in 25 years

This series of integrations covers the complete stack from enterprise services to protocol layers to data interfaces, providing BASE with a standardized, replicable compliant L2 building template.

In short, BASE embeds “compliance” into system design, rather than relying on external governance to make up for it afterwards.From the architectural selection – functional development – acquisition supplement, the entire link meets the most basic compliance requirements in turn.This design idea makes BASE hopeful to become one of the public chains in the future Web3 world that is closest to mainstream compliance requirements.

(II) Sui

As a public chain project launched in May 2023, Sui has quickly emerged in the blockchain field with its unique technical architecture and user-friendly design.Compared with many other public chain projects, Sui has shown remarkable robustness in its nearly two years of launch, especially in regulatory compliance and network security.So far, Sui has not been prosecuted or charged, which not only highlights the rigorous attitude of its development team in technology and compliance, but also wins trust and reputation in the highly competitive blockchain market.

Meanwhile, Sui’s recent performance further demonstrates its market potential.With the rapid development of the Sui chain ecosystem and the continuous increase in community popularity, Sui’s market value has soared to more than 13 billion US dollars, ranking in the top 13 in the global virtual currency market value ranking.This market value scale not only reflects the market’s high recognition of Sui’s technological innovation and application prospects, but also marks its important position in the competition in the public chain field.

So, how did Sui maintain compliance while growing rapidly and gaining a foothold in the fierce competition for public chains?

1. Language Advantages

It also meets compliance requirements and is also flexible, but unlike Base’s choice of existing technical architecture, Sui’s flexibility advantages are “natural”.

Sui uses the Move programming language, emphasizing high transaction speeds and low latency, prioritizing fast and secure transaction execution, especially for real-time applications like gaming and finance.Compared with the more widely adopted EVM language, the Move language has the advantages of being more advanced and more suitable for the current blockchain development.

The modular design of the Move language allows developers to organize code into reusable modules, which can share resources and functions, facilitate upgrades and combinations, making it more advantageous in the developer experience.

Just recently, Ethereum (ETH) founder Vitalik also stated that he proposed to replace Ethereum virtual machines with RISC-V.RVIS-V also has many similarities with the Move language, the most important point is modularity and scalability.Both RISC-V and Move emphasize modularity and scalability in design, and support user-defined instruction extensions, allowing them to adapt to a variety of application scenarios to facilitate expansion and use in different blockchain applications.This further withdraws the technical advantages of the MOVE language.

And this laid a solid foundation for Sui’s compliance path.

2. Empower developers / cooperate / access third parties

Sui Blockchain has taken several measures to ensure compliance with regulatory requirements.

First of allCompliance tools are made into “modules” that allow developers to call on demand.Sui as a decentralized blockchain itself does not enforce AML or KYC directly, but it provides the necessary tools and infrastructure for projects built on the platform to meet regulatory standards.Through various tools, help developers to self-discipline and ensure compliance, such as targeting geographic restrictions.For example, Sui teamed up with Netki to launch DeFi Sentinel, a compliance oracle that provides developers with automated compliance tools including real-time KYC/AML (Know Your Customers/Anti-Money Laundering), wallet screening and financial transaction monitoring.These tools can help dApps verify the user’s location and ensure that only users in compliant areas can access the service.For example, Doubleup gambling projects are only available to users in gambling compliant areas.

Of course, in the face of some illegal projects or individuals that may become missed, Sui expresses the legal cooperation obligation in the terms of service: funds can be frozen and access can be restricted according to legal requirements, which provides a legal interface for compliance review.If Bybit is stolen $1.46 billion on the Sui chain, it is possible to freeze the stolen money under the terms.

The second is to seek support from partners.Sui’s decentralized nature makes it difficult to implement AML/KYC directly like traditional financial institutions, but by providing transparent transaction records and partner tools, it supports projects to meet regulatory needs.For example, Sui Blockchain uses its ZAN platform to provide KYC and AML tools to support compliance tokenization of Real-World Assets (RWA) through its partnership with Ant Digital.ZAN, as Sui’s RPC node operator, connects to Sui’s infrastructure.This means that ZAN’s tools can communicate seamlessly with Sui’s blockchain network, enhancing its scalability and security.

Finally, it is the introduction of third parties.Sui Chain works with third parties such as Chainalysis to improve compliance through its community-driven Sui Guardian program.Sui Guardian tracks scam and phishing websites, Chainalysis’s analytics tools are able to monitor and analyze on-chain transactions and identify addresses or patterns associated with known illegal activities.By analyzing trading patterns, Chainalysis can identify potential victims of phishing attacks, helping exchanges and users take precautions.This helps Sui comply with AML and KYC regulatory requirements worldwide, such as the EU’s Fifth Anti-Money Laundering Directive (5AMLD) and the U.S. Bank Secrecy Act (BSA).

These three points can also be seen from community motivation.The Sui token allocation model has three uses to support Sui ecological community construction: Community Access Program: 5.82%; Stake Subsidies: 9.49%; Community Reserves: 10.65%.The proportion of tokens used to support the construction of Sui ecological community is 26%, reaching 54.37% of the announced release plan (47.82% released by 2030), accounting for more than half of the total tokens in circulation.Among them, the community access plan is used to encourage projects and support projects on the chain.With a community reserve of 10.65%, it pays more attention to the long-term construction of the Sui ecosystem, such as funding the development of DApps of Move language, supporting community governance, or reserve funds for future expansion to guide the construction of a compliant ecosystem.

In this way, Sui not only meets compliance requirements, but also achieves risk isolation.

In the blockchain ecosystem, public chains usually provide services as the basic layer. Users interact with various Dapps through smart contracts written by the project party, and the stakeholders are mainly project parties and users.At present, most parties to legal disputes and judicial precedents are project parties and their participants. Unless there are major loopholes in the public chain that directly lead to user losses, public chains are rarely listed as defendants.

For example, Sui recently announced a partnership with xMoney and xPortal to launch a digital Master Card that supports SUI tokens in Europe.As a technical platform, Sui itself is mainly responsible for the construction of infrastructure and asset ecology. The payment side is undertaken by the licensed institution xMoney, and the application-side user experience is managed by xPortal.

3. Data compliance

Sui is one of the few that has been explicitly constructedGDPR (EU General Data Protection Regulation) Compliance Capabilityone of the public chains.Through three native technical tools, a compliance system for strictly regulated markets such as the EU has been established:

Through this mechanism, Sui users can use Web3 applications using Web2 login without exposing their private keys or leaking their identities – experience and compliance are upgraded simultaneously.

We can see that Sui’s path is also internalizing compliance into part of architecture and product design, but compared to Base,Sui’s solution finds a balance between compliance and decentralization.

Integrating compliance into the top-level architecture from the beginning of the design not only meets the requirements of global regulation, but also builds a vibrant and robust ecosystem through community incentives, key project construction and offline activities.Its specific measures at the user compliance, partner support and project levels, such as cooperating with third parties to provide KYC/AML tools, adopting innovative technologies to support GDPR compliance, etc., demonstrate its forward-looking and execution ability in responding to regulatory challenges.

The layout of public chains should start from the overall perspective and adapt to future development directions from the underlying logic.As a public chain project, development plans cannot be made from the perspective of a single project. It should take into account diversified application scenarios and development trends and make layouts in advance.Governing the chain is like governing the country. Only by having complete infrastructure construction on the chain, taking the lead in developing high-investment projects, and reasonably allocating incentives can we attract more developers and users and gradually develop a rich chain ecosystem.

(III) Robinhood Chain

Robinhood, the Internet brokerage company, opened up the retail trading market as a pioneer, and then actively followed up on crypto, listed multiple currencies and developed its own wallet application. At the end of June, it announced that it would provide tokenized US stocks, which was a hit.But Robinhood also encountered a difficult situation: it was fined up to $70 million in 2020 for “order flow payment” issues – which not only made it one of the largest single brokerage firms in U.S. history, but also strengthened its deep embedding of the compliance framework in product design.So Robinhood is essentially a compliance-leading financial technology company, and its business model is based on “compliance innovation”.

1. From Arbitrum to Robinhood Chain

Robinhood’s tokenized stock launched by Robinhood at the end of June was issued on the second-tier public chain Arbitrum, which has lower gas fees and higher throughput compared to the Ethereum main network.However, Arbitrum itself does not meet our definition of a strong compliance public chain, so this time the choice is more of a strategic expediency, and therefore its tokenized US stocks are only for European users, not its base, the United States.

As Web3 enters the industrial docking stage, Robinhood’s next step is to launch its own compliant public chain Robinhood Chain, as a platform for asset issuance, on-chain settlement and data custody, aiming to fully introduce traditional financial assets (such as stocks and ETFs) to the chain, achieving 24/7 all-weather trading, de-mediated circulation and deep integration with DeFi infrastructure.This will be a key leap for Robinhood from a “Web2.5 Compliant Exchange” to a “Web3 Compliant Financial Infrastructure”.Such an important strategy, being able to conduct business in compliance with the US market will be the first priority. Therefore, compared with Arbitrum, one of the key points of Robinhood Chain development is “combined scale blocks”.

2. Three steps to comply with

It must be noted that Robinhood has not disclosed its technical roadmap for its public chain so far, but through its official Tokenization Memo (hereinafter referred to as Memo) and the compliance letter submitted to the SEC, we speculate that Robinhood Chain will most likely adopt the following in the future.Compliance technology:

The first is “on-chain + off-chain identity binding”.Like Base, Robinhood selects “Off-chain KYC+On-chain Authorization Address Binding”, which is clearly mentioned in its compliance letter submitted to the SEC.In this way, all behaviors that bind the on-chain address of the Robinhood exchange will become traceable, and the address of the off-chain account that is not bound will be prohibited from transferring tokens.

The second is smart contract.This step is also similar to Base.In addition to KYC, Memo also mentions mandatory transaction management methods, rules for different jurisdictions, etc. These rules mentioned in Memo can actually be converted into smart contract logical judgments. At the technical level, it is a bunch of if/else judgments, which can take effect if added to transfer or mint functions.This means that the contract itself will strengthen the on-chain execution capabilities such as “regional restrictions”, blacklists, and position caps, without relying on manual review.

Finally, compliance API support.Robinhood mentioned in a letter submitted to the US SEC that in the future its tokenized stocks, bonds and other assets must be escrowed by licensed brokers (such as Robinhood itself or regulated third parties) to ensure the security of assets and prevent theft or abuse of assets.These brokers are responsible for keeping the user’s private keys, recording the transaction books, and undergoing regular audits.Although these assets are on-chain, trading through traditional channels such as OTC or automatic trading system ATS is still allowed.At the same time, these on-chain transactions should also be able to connect with traditional financial systems (such as DTC clearing system) to ensure that the data on and off-chain data are consistent.

To support these, Robinhood Chain will build a standardized “regulatory interface” in the future, which is a technical module similar to APIs.Through these interfaces, regulatory authorities can view transaction records, “freeze” the addresses involved in risks, or retrieve a user’s transaction history to ensure that on-chain behavior complies with compliance rules.

3. The future may

Robinhood CEO Vlad Tenev once clearly mentioned in the live broadcast that Coinbase is his very respected opponent. In the big chess board of web3, Coinbase took the lead in launching the Base public chain, which also provides reference samples for Robinhood to launch its own public chain.The future Robinhood Chain will be on the same compliance route as Base, and the two will learn from each other and develop on their own.

Robinhood and Base are almost the same in terms of path selection for compliance.Flexible underlying architecture, self-built scale blocks, and regulatory-open API interfaces.This is also the most common operation we can see in compliance with public chains in the US market.

3. Compliance and Privacy Priority Public Chain: Exploration of Path in the Middle Zone

Base, Robinhood Chain and Sui, these public chains have taken into account legal compliance at the beginning of their design and are suitable for promotion in the traditional financial system.Other public chains, such as ZKsync and Stellar, also pay attention to compliance, still have some controversy in their regulatory recognition. They are in the middle of “weak compliance”. There are also a group of public chains and regulatory agencies that are in a sensation and are completely unacceptable by mainstream institutions.

(I) Weak compliance public chain

Plasma is a Layer 2 public chain based on Ethereum. Its core feature is to use USDT as a native asset.It is precisely because of its association with stablecoins such as Tether (USDT) that its compliance has been widely questioned.Tether has been frequently questioned in recent years due to compliance issues, such as insufficient transparency in fund reserves and incomplete anti-money laundering (AML) measures.Although the Plasma team actively adapts its strategies to try to cater to regulation through technical means such as improving data availability or introducing audit mechanisms, it has not yet been formally recognized by mainstream regulators.

ZKsync is an Ethereum ZK-rollup expansion solution that has attracted the attention of traditional financial institutions in recent years.Deutsche Bank is developing its based on ZKsyncProject Dama 2, the goal is to establish a compliant financial chain linked with Singapore MAS and provide audit authority to regulators.ZKsync is willing to compromise and actively connect with projects in compliance scenarios, but its basis is still an open and freely accessible agreement. There is no built-in compulsory KYC or transaction restriction mechanism, so it is still subject to regulatory investigations by the US SEC and the Treasury Department and has not yet been officially recognized by official regulatory authorities.

Aztec is an Ethereum Layer 2 centered on privacy transactions and smart contracts, enabling a combination of anonymity and programmability.Its system is based on Zero Knowledge Proof-of-the-Knowledge (ZKP) technology and provides the development of a proprietary Noir language to support private smart contract execution.While it promotes research directions for privacy + compliance in academia and technology communities, it has not been explicitly certain or endorsed by mainstream regulators.Although Aztec seeks a balance between compliance and privacy, its core positioning is still privacy priority. Its compliance depends on how the subsequent ecosystem adopts “optional scale blocks”, while the protocol itself lacks a mandatory KYC/AML interface.

(II) Non-compliant public chain

If weakly compliant public chains are not doing well in compliance, but at least they indicate that they are moving closer to compliance, then non-compliant public chains are public chains that completely ignore regulatory requirements.

In January 2025, the US SEC formally filed a lawsuit against Nova Labs on the grounds that the three tokens it issued – Helium Network Token (HNT), Helium Mobile Token (MOBILE), and Helium IoT Token (IoT) – were suspected.Illegal sale of unregistered securities.The SEC also accused it of misleading investors and falsely pursuing its partnership with major companies such as Nestlé and Salesforce, but in fact there is no corresponding authorization and signing.

As a typical DePIN (decentralized infrastructure network), Helium’s project core revolves around IoT hotspot devices, does not undergo KYC review at all, and does not have any on-chain scale blocks.Its token circulation is highly public and anonymous, making it difficult for regulators to hold them accountable.It is still in the early stages of the lawsuit, and the project party has completely denied the SEC allegations.No compliance support mechanism, is one of the typical representatives of “completely non-compliant” public chains.

There is also a typical example of total non-compliance – Terra.The SEC has filed a lawsuit against its parent company Terraform Labs since 2023, accusing it of using algorithmic stability mechanisms to induce investors to participate in unregistered securities sales by issuing UST stablecoins and LUNA.But in the final analysis, the SEC can catch the handle due to the storm, and the lack of basic KYC/AML mechanisms throughout the project process, and no combined scale blocks such as fund freezing, address restrictions, on-chain audits, and regulatory interfaces are embedded.The project has departed from the regulatory path since its inception and is considered a typical case of violations of securities laws.

4. Trend judgment: The long-term evolution logic of compliant public chains

In the past few years, many projects have been committed to “built self-built public chains”, but reality has proved that unless you can achieve the ultimate in the three levels of performance, security and ecology, the marginal benefits of building a chain are far less than the compatibility and compliance dividends brought by directly grafting mainstream chains.

Then the real questions to be asked have become three:

1. Will different types of assets or data be put on the chain on a large scale?

2. How will the market structure of compliant public chains evolve?

3. In the future where on-chain systems continue to evolve and regulatory environment changes, what new technologies will emerge?

The answer to the first question is unquestionable.BlackRock not only tokenize the Treasury ETF shares to the Ethereum network, but also launched the first private equity fund that is fully on-chain issuance, settlement and management.Wall Street institutions such as Goldman Sachs and Citi are also continuing to explore the implementation path of RWA on the chain.It is worth noting that even transaction data is gradually “chained” – companies such as BlackRock and Fidelity have recorded some fund operations through public chains such as Ethereum.On the other side of the ocean, Hong Kong SFC has officially issued 41 virtual asset platforms, and Guotai Junan has become the first Chinese brokerage firm to be licensed. This series of actions clearly sends out a signal: the intersection period between compliant finance and on-chain assets has arrived.

At this time, choosing a public chain becomes an inevitable link.What institutions really need is not “re-create a chain”, but find an architecture that can find a balance between sovereignty and compliance, on-chain autonomy, cross-chain interoperability, and secure self-hosting.

The future public chain architecture will show a trend of embedding “modular compliance capabilities”.The new paradigm represented by Base and Robinhood Chain has shown a trend: through off-chain identity authentication + on-chain behavior tracking, combined with standardized regulatory APIs, the coordination between compliance and open ecosystems is achieved.This design model will be reused by more chains for the institutional market in the future.Another technical direction is “selective compliance”, where developers or application layers can freely call scale-based blocks, access KYC service providers, and set asset management rules, which are reflected in chains such as Sui and ZKsync.

We expect that compliance supervision will present a two-track parallel pattern: First, compliance requirements for financial assets are becoming increasingly strict, covering full-process compliance such as KYC, AML, and regulatory data access; Second, the inclusiveness of decentralized architecture and innovative exploration will still retain space, especially prudent supervision in areas such as smart contract logic, DAO governance, and ZK privacy computing.

After the compliance public chain gradually matures, a batch of “native compliance” projects will be born in the application layer.These projects not only consider regulatory requirements when issuing and operating, but may also directly provide “regulation as a service” capabilities.KYC, AML, risk control engine, identity custody, contract audit and other capabilities will form standardized interfaces and become public services for on-chain ecosystems, further reducing the access threshold for traditional financial institutions.

For example, at the security level, multi-signature architecture has become the standard answer. Taking NexVault as an example, its enterprise-level multi-signature wallet solution has supported 12 main chains, focusing on the asset self-custody, security audit, authority management and inheritance logic of enterprises, family offices, foundations and DAOs, and has realized the layout of regulatory compliance paths in Hong Kong and Singapore.

5. The last words

As the crypto industry gradually enters the era of compliance, public chain construction no longer simply pursues performance and cost, but begins to regard “compliance” as the prerequisite for top-level design.From Coinbase to Robinhood, from Base to Sui, we can see a trend:The mainstream chain in the future must serve real-world assets and users, and must also meet the requirements of regulatory agencies.

The word “compliance” will no longer represent suppression and restraint, but a new tool of productivity.

As long as you understand the regulatory logic, technical architecture and user needs in a systematic way, you can create a blockchain infrastructure that is both open and compliant.The future Web3 world will not only be anonymous transactions and DeFi arbitrage, but will also be an ecosystem where diverse scenarios such as RWA issuance, identity credit, on-chain governance, and industrial finance coexist.The role of the public chain will also be upgraded from a “technical laboratory” to a “new digital platform”.