BlockBeats News, December 29: David Duong, Head of Investment Research at Coinbase, stated, “We believe that dedicated blockchain networks are rapidly emerging (including L2s, independent L1s, and application-specific chains) and are swiftly reshaping the competitive landscape of crypto infrastructure. For example, the Arc platform built by Circle is designed for institutional-grade application scenarios centered around USDC, aiming to become compliant, optimal institutional infrastructure; while the Tempo network incubated by Stripe and Paradigm focuses on opening up institutional payment channels, targeting the massive cross-border payment and international trade market. Another example is Canton Network, which is building a private, permissioned blockchain environment specifically to unlock trillions of dollars in institutional capital ‘locked’ by asset tokenization and securities exchanges.
This resulting infrastructure fragmentation is not accidental but a strategic response by the institutional layer to a core issue: large institutions are generally unwilling to outsource their core business logic to platforms controlled by competitors. The underlying logic lies in—strategic control. An increasing number of companies are choosing to launch their own blockchains to control their data sovereignty, compliance environment, and the financial value accumulated by network effects. In the short term, this trend may further accelerate, with institutions continuing to launch dedicated chains for high-value, heavily regulated capital flows, prioritizing customized governance, fee structures, privacy controls, and compliance features over using generic shared infrastructure.
But in the long run, we believe the endgame is not infinitely fragmented ‘island chains,’ but a network-of-networks architecture: these highly customized blockchains will achieve deep composability through advanced interoperability layers, such as native cross-chain messaging, shared security mechanisms based on staking/restaking, and privacy-preserving cross-chain bridges. The ultimate winners will be projects that can balance vertical depth optimization with horizontal seamless interconnection—achieving cross-chain atomic settlement, unified liquidity pools, and synchronized flow of real-world assets (RWA); while laggards may become trapped in isolated ecosystems, gradually marginalized in a market environment that increasingly rewards compliance, liquidity, and the free flow of institutional capital.”
