The Ethereum Virtual Machine (EVM) will become Wall Street's Microsoft Excel moment.

Author: David Hoffman, encryption KOL

Compiled by: Felix, PANews

Recently, both Circle and Stripe announced the launch of their L1 public blockchain:

• Circle's new L1 public chain Arc is an EVM-compatible L1 chain with 20 licensed validators from regulated and trusted institutional alliances.
• Stripe is building an L1 public chain, which may use Paradigm's RETH client—this is a high-performance Ethereum client built with Rust. Matt Huang, the founder of Paradigm, is a board member of Stripe and has likely contributed significantly to the development of the Stripe chain (named Tempo).

Recently, the discussions on Twitter can basically be summed up as: "Is this good or bad for cryptocurrency? Is this good or bad for my holdings?"

Personally, I find permissioned L1 extremely uninteresting. The value of cryptocurrency and the "main storyline" lies in open-source software, and Ethereum is at the heart of this story.

Building a permissioned L1 is far removed from the mainstream of cryptocurrency, and it even seems irrelevant. For Circle and Stripe, blockchain technology is merely used as a database structure, and that's it.

Will Arc and Tempo issue L1 assets?

If they are issued, it would mean there is an intention for decentralization, making these chains appear more interesting. However, at present, in the absence of further data, it is reasonable to assume that neither of these chains will issue L1 assets, but rather will serve as private intranets for backend applications used for stablecoin settlements.

There is another law in the encryption field, which is that if something can issue tokens... it will eventually issue tokens (like Base), so ignoring this possibility is also unrealistic. If these enterprise-level L1s eventually issue tokens, then they will have taken a step towards becoming an open-source decentralized developer platform, which is closer to the main storyline of cryptocurrency.

Will Stripe and Circle try to encourage developers to develop on their chain?

If developers do not receive rewards or are not part owners of the chain, are they willing to develop on someone else's blockchain? Stripe already has a large developer community... but that is a Web2 developer community that builds Web2 front-end and e-commerce sites. Will this translate into encouraging Web3 developers to develop on Tempo? Is the value of developing on Tempo greater than the value of developing on Ethereum or any of its L2 networks?

Perhaps these chains will always remain as permissioned consortium chains with no L1 assets, merely stripping away the business logic backend of Visa, Mastercard, and Swift to build their own settlement networks.

All these questions have no answers and are still unclear, so I personally think it's too early to discuss whether this is beneficial for BTC, ETH, SOL, or the entire encryption industry.

There is no doubt that these enterprise-level L1 chains are beneficial to the Ethereum Virtual Machine (EVM).

The following picture is a slide from a speech at the Ethereum New York Conference this week:

It all started with the Robinhood chain, which is the first case of a TradFi company building and owning an EVM instance. Robinhood has hired EVM developers, and the understanding of EVM has now become central to Robinhood's business. Now, Circle and Stripe have also joined the ranks of TradFi, as these companies have hired and managed EVM talent within their corporate structures.

The focus is on: every traditional financial company involved in cryptocurrency needs to hire EVM developers. For traditional financial companies, understanding EVM has become a necessary condition for upgrading backend logic to adapt to the future of blockchain.

Just as Microsoft Excel supports traditional finance, EVM is the new generation of ledger software that Wall Street needs to cultivate talent in order to maintain market share and not be disrupted by innovations on Ethereum.

Once you delve into Ethereum, you will find that all roads ultimately lead to the value capture of ETH, and this is one of the pathways. Although very indirect and subtle, the expansion of the EVM empire will eventually bring appreciation to the assets at the center of EVM: ETH.

Related Reading: Ten Key Reasons to Be Bullish on Ethereum