Big Tech Is Poised to Shun Ethereum, Solana, Arbitrum... and Build Their Own Blockchains

These are just three of the well established blockchains in decentralised finance supporting a panoply of projects.

Big Tech firms such as Apple and Meta could avoid paying "rent" to any given blockchain by running their own blockchains, a venture partner at VanEck has said.

Juan Lopez, general partner at the asset management firm's venture arm, was discussing how fintechs might prefer to build their own chains rather than using those built by decentralised finance firms.

His analysis comes as online brokerage Robinhood revealed a 700% rise in crypto-related revenue in the fourth quarter.

With the fintech industry expected to reach $1.5 trillion by 2030, servicing their crypto needs presents a massive opportunity for DeFi players.

However, fintechs' desire to control their own chains could mean this chance slips between DeFi's fingers.

But why would fintechs go to all of the expense and trouble to build their own solutions?

Profits, is the short answer.

By controlling their own chains, companies could keep more of their earnings, Lopez argued.

Moreover, they would have more control over their technology stack, which is industry parlance for a collection of technologies used to build and run a product.

Some native firms have already started to do just that, which could provide a blueprint for fintech firms, Merlin Egalite, co-founder of decentralised lending protocol Morpho, told DL News.

In 2023, Coinbase launched Base, its own Ethereum layer 2 blockchain.

It has grown to become the biggest layer 2 in crypto, with $3.8 billion worth of deposits, and has generated over $112 million in revenue for Coinbase since its launch, according to DefiLlama data.

Rival exchange Kraken launched its own layer 2 called Ink in December.

This approach, however, only works for bigger fintechs with established user bases, Lopez said. Smaller firms will likely still tap into existing DeFi infrastructure so they can benefit from its established user base.

He compared using blockchains like Ethereum or Solana to an open source distribution mechanism, where a new product can instantly gain access to a pool of millions of potential users.

Solana, the second biggest blockchains by deposits, has over 81 million monthly active wallets, per Token Terminal data.

Arbitrum, the second-biggest Ethereum layer 2 behind Base, has 4.8 million monthly active wallets.

Some users may rotate between several wallets simultaneously, so there’s no way of knowing if these figures represent the number of individual users, however.

Small and medium sized fintechs “will greatly benefit from just plugging into what’s out there,” Lopez said. “There’s going to be an explosion in the startup ecosystem.”

Even some bigger firms are taking this approach.

In November, a group of fintech and crypto firms including Robinhood and crypto exchange Kraken launched their own stablecoin network, which will leverage existing blockchains including Ethereum and Solana.

Other firms, such as Revolut, the British neobank, are expected to follow suit.

Few details are known about the firm's stablecoin project. But with a valuation of $45 billion and a UK bank licence, Revolut's move will pack a punch.

“Over the next 12 to 24 months, we’ll see fully-fledged product rollouts from traditional fintechs offering stablecoin payments,” Lopez said.

“Once everyone sees that they’re processing billions of dollars in volume per month, I don’t think anybody’s going to care about what this is for,” he said.

“They’ll just jump on the train.”