some thoughts on Blackrock and blockchains

lotta people talking about whether Blackrock will or won't use Ethereum.

plenty of people saying they'll use a permissioned L2.

some saying they hope they never go the L2 route at all.

lot of opinions.

whatever.

Larry Fink says the chain stops corruption in its tracks, which is nice, but also wrong. people are the source of corruption, not technology, and the arms race between corruption and solutions to corruption is as old as time. simply naïve to think trustless execution will be the end of it.

additionally, i think many are forgetting that Blackrock is a customer of the tradfi system, not an owner. they're a participant, not an administrator.

do they want assets to be tokenized? yeah, probably. that'll help them see where their shares are, prevent rehypothecation, and just increase transparency in general—which is a good thing for any org that values clean and efficient ops and risk management.

i see lots of folks saying "we want tradfi to become like crypto, not for them to just adopt our tech and not change!" which is, i hate to say it, hopelessly utopian. crypto relies on open, borderless access to capital, and sees itself transcending nation states. tradfi will always be beholden to nation states. the United States will fall before tradfi becomes crypto-native.

lots of hopium about Ethereum as the settlement layer, too. tradfi is never going to pay in ETH, subject themselves to exogenous risk, or allow gas spikes to disrupt their business. the NYSE (and other exchanges) will build their own blockchain first so that they can capture the native value of a gas token, and trading firms will run their own nodes for the competitive advantage of being "close" to the blockchain. if anything, Blackrock doesn't build an L2, they build a node client (like geth) that competes on state sync and computation.

the system itself just has zero incentive to move infrastructure outside of its control, even if they adopt infra that is identical.

don't get me wrong, it's definitely in my prediction book that stocks move to a blockchain world, but that's strictly an efficiency thing: trustless execution and programmability will reduce enforcement and administration costs.

but let's not pretend Blackrock will be trading on Uniswap anytime soon.