As capital increasingly moves on-chain, institutions are now considering what will define the base rate for on-chain financing.
At the Vault Summit in Cannes, a panel moderated by Redwan Meslem of the Enterprise Ethereum Alliance brought together leaders including Merlin Egalite of Morpho, Rafael Mastroberardino of Franklin Templeton, Paul-Adrien Hyppolite of Spiko and Lancelot of Ferrière d’Hyli.
The panel discussed how online money market funds and loan vaults compete for institutional capital, and how institutions evaluate allocation based on divergent yield, liquidity, and risk profiles.
The discussion expanded beyond yield to address the infrastructure, risk frameworks, and operational constraints that determine whether these products can support large-scale institutional allocation.
At this point, we are well aware that institutional Ethereum is moving from experimentation to production.
Tokenization is no longer the main constraint; the challenge now lies in the subsequent steps.
From tokenization to allocation
The market is moving from asset creation to asset utilization. “Now it’s very easy to tokenize assets… but so what? What do you do with that asset?”
This is the challenge that institutions currently face. Tokenization ensures representation, while infrastructure determines usability.
This distinction is essential: assets only become important when they can be allocated, integrated and governed within institutional systems.
Different instruments, different base rates
Onchain markets are fragmenting into multiple base rates rather than converging toward a single benchmark.
“There is a yield curve derived from cryptocurrency-backed loans… different from the yield curve of traditional finance. The two are unlikely to converge.”
This shift changes the way institutions approach cash management.
- Tokenized monetary funds: stability and predictability
- On-chain loan vaults: yield and flexibility adapted to the market
These products are not interchangeable, but represent distinct layers of infrastructure, each fulfilling different mandates.
The risk becomes programmatic.
Onchain infrastructure enables a more precise approach to risk modeling.
“Risk is a spectrum. »
This level of precision is essential for institutional allocation.
Instead of broad categories, risk can be defined by safeguards, isolated by the market and reinforced by infrastructure.
This transition shifts risk management from policy to system design.
Effectiveness without additional risk
Onchain infrastructure does not generate returns; it optimizes existing performance.
“If the token is actually the asset… There should be no risk premium. Blockchain just makes it much more efficient.”
This is a fundamental point for institutional adoption:
• The return remains linked to the underlying assets
• Infrastructure improves access and efficiency of capital
In practice, this translates into fewer intermediaries, faster settlement and better use of collateral.
In some cases, this can compress returns, indicating more efficient markets rather than weakness.
Transparency and institutional requirements
Onchain systems provide improved visibility.
“Providing real-time transparency… is actually very valuable. »
But institutional constraints remain:
“No treasurer wants all their information to just be available on the market. »
This tension highlights the need for infrastructure development.
Institutional Ethereum requires transparency for verification and privacy for execution. Fixing this issue is essential for deployment to production.
Integration is the real bottleneck.
The main constraint is integration and not product design.
“They don’t want to use a separate protocol or new infrastructure. They would like to have it in their own systems.”
This is the critical factor determining adoption success.
Institutions need compatibility with existing systems, standardized interfaces and predictable infrastructure behavior. Without these elements, even high-quality products cannot scale.
The role of standards and coordination
While several instruments compete to define the base rate, consistency is essential.
This is not only a market issue but also a coordination challenge.
Institutions cannot allocate at scale without shared standards, interoperable infrastructure, and aligned system design.
The Enterprise Ethereum Alliance solves this problem by coordinating companies, setting standards, and enabling institutional Ethereum to go into production.
What this means for institutional Ethereum
The question is no longer whether capital will move on-chain. The focus now is on how capital will be distributed across competing infrastructure layers. Performance alone will not determine the outcome.
What matters is:
- reliability,
- integration,
- standards,
- and institutional adequacy.
The Enterprise Ethereum Alliance brings together asset managers, banks, infrastructure providers and protocol teams to define the standards enabling this transition.
