The next step for public chains: from performance competition to institutional closed loops

The Next Step for Public Chains: From Performance Competition to Institutional Closed Loop

The most common narrative in the blockchain world over the past few years has been the competition of public chains in terms of performance: who has higher TPS, who has lower latency. Emerging public chains like Solana and Sui are representatives of this logic. Solana has demonstrated extremely high processing capabilities during the high-frequency trading and NFT boom, while Sui has explored faster execution paths through parallel architecture. These attempts have proven a fact: public chains have the opportunity to catch up with or even surpass Ethereum in terms of technical performance.

However, when focusing on institutional participation, the story becomes more complex. For institutions, going on-chain is not as simple as "buying a coin," but rather involves moving an entire workflow onto the chain. This is somewhat akin to a bank replacing its core system; it’s not just about having fast servers, but also ensuring that data can be transparently audited, prices can be authoritatively confirmed, and transactions can be executed through compliant channels. Otherwise, even if the chain is fast, it will be difficult for institutions to truly enter on a large scale.

This workflow can be broken down into three steps. First, can it be observed? This means whether the infrastructure and data are transparent and auditable. Just like in traditional financial markets, without Bloomberg and exchange terminals, traders can hardly make any progress. Second, can it be priced? Is the price data fast enough and accurate enough? This is the lifeline for derivatives, lending, and risk control. Third, can it be distributed? This means whether capital from the traditional financial system can enter through legal and compliant channels, such as funds, brokerages, or custodial banks. Only when these three aspects are connected will institutions truly feel secure in moving their money over.

Recently, there have been some cases in the market attempting to follow this logic to establish a closed loop. While maintaining high performance, they are gradually adding these three layers of logic to meet institutional needs: transparency and observability, authoritative pricing, and compliant distribution.

This means that it is not just about purely pursuing speed, but positioning itself at a higher dimension—attempting to become the preferred underlying public chain for stablecoins, RWA (real-world assets), and institutional-level applications.

First, observability. On-chain transparency and auditability are the most basic requirements for institutions. For example, the integration of Etherscan with Sei allows for contract verification, address tracking, event logging, and more to be completed within a standardized industry tool. For developers and auditors, this means no need to relearn, significantly reducing communication and compliance costs. The integration of such infrastructure signifies that public chains are being incorporated into the "visualization" framework of traditional finance.

Second, pricing. It is not enough to just see the assets; institutions need low-latency and authoritative data to support pricing and risk control. Sub-second price feeds, liquidity-weighted bid-ask spreads, and the upcoming introduction of U.S. BEA macroeconomic data. This type of data not only enhances the quality of high-frequency trading and clearing but also provides a pricing foundation linked to the real economy for RWA and lending markets. Compared to traditional finance, this is more like embedding Bloomberg-level data engines directly into the execution layer of the blockchain.

Third, distribution. Ultimately, institutional funds need compliant channels. The Staked SEI ETF has been accepted by the SEC and is entering the review stage. Although there is still a process before final approval, this indicates that blockchain assets are being included in the agenda of mainstream capital markets. If the ETF can be listed, traditional brokerages, investment advisors, family offices, and even some retirement accounts may allocate blockchain assets through familiar ETF tools. Together with Europe’s ETPs and Japan’s compliant token listings, this is sketching out a cross-regional distribution network.

From a macro perspective, this series of developments reveals a trend: the narrative of public chains is shifting from a singular focus on performance competition to the construction of institutional closed loops. Whether it can successfully connect transparency, data pricing, and compliant distribution will determine whether a public chain can truly accommodate large-scale institutional capital entry. In this sense, Sei is gradually being viewed as the preferred underlying public chain for stablecoins, RWA, and institutional-level applications. Its actions are worth observing, but more importantly, it represents a new direction: blockchain is gradually moving from "a playground for geeks" to "financial infrastructure usable by institutions." This path is difficult and costly, but once established, the ceiling of the industry will be redefined.