The Market Shift Momentum has shifted. Earlier this year, we predicted that 2025 would be the year traditional finance (TradFi) and decentralized finance (DeFi) began to truly converge. As we approach year-end, that momentum has accelerated into tangible infrastructure buildouts.

We are seeing a dual-track evolution: established financial players are betting heavily on tokenization, while decentralized innovators are adopting the high-frequency trading (HFT) architectures of Wall Street to power the next generation of DePIN.

The Institutional Bet Driven by the promise of liquidity and efficiency, the "smart money" is moving on-chain. We are tracking significant proof points that validate this shift:

• BlackRock: CEO Larry Fink’s vision of widespread asset tokenization is moving from theory to practice.
• Nasdaq & DTCC: Major market utilities are launching tokenized securities trading and real-time collateral management.
• Banking Giants: JP Morgan and Citi are actively tokenizing private equity funds and deposits for 24/7 mobility.

The Infrastructure Challenge: Physics vs. Blockchain However, this convergence faces a massive hurdle: Latency. Can decentralized blockchains essentially "buck the laws of physics" to deliver the throughput required for global capital markets?

While Ethereum Layer 2 solutions (like the upcoming MegaETH targeting 100k TPS) and high-throughput Layer 1s like Solana are making massive strides, the physical layer of the internet remains a bottleneck.

The DePIN Solution: DoubleZero This is where the Decentralized Physical Infrastructure Network (DePIN) model is proving its unique value.

A standout example is DoubleZero, a startup that is applying HFT principles to blockchain connectivity. Recognizing that the public internet is too slow for institutional crypto trading, they have constructed a dedicated, low-latency fiber network—crowdsourced via DePIN.

Instead of building new fiber from scratch, DoubleZero utilizes capacity from 11 independent contributors—including heavyweights like Jump Capital and Galaxy—who provide the infrastructure. In return, these providers earn 2Z tokens.

Why This Matters for the Collective

The success of projects like DoubleZero validates two core tenets of the DecentraTech Collective:

1. Utility over Speculation: Rewards in this network are tied to the utility (performance) provided, not arbitrary inflation.
2. Regulatory Progress: DoubleZero recently received a "No Action Letter" from the SEC, confirming their token is not considered a security. This is a massive regulatory win that sets a positive precedent for the broader DePIN sector.

​As convergence continues, we expect DePIN architectures to become the backbone that allows Wall Street to finally move at the speed of the blockchain.

The Convergence: TradFi, DePIN, and the Era of Decentralized AI

​The development and deployment of transformational technologies are accelerating at an unprecedented pace. At the DecentraTech Collective, we are actively championing this evolution, guiding our members and the broader market through the convergence of critical infrastructure and financial systems.

We see three dominant trends shaping the current landscape: the rapid integration of TradFi with DeFi, the expansion of tokenization into physical infrastructure (DePIN), and the urgent imperative to address data governance to ensure that emerging Artificial Intelligence (AI) Agents are trusted, verifiable, and operate responsibly.

TradFi Meets DeFi

With the growing adoption of both asset tokenization and stablecoins by big (regulated) financial markets players, and a more amenable regulatory framework emerging, an accelerated convergence of TradFi and DeFi is a given. TradFi (Traditional Finance markets running on legacy infrastructure) will continue its redux using DeFi (tapping into blockchain and crypto technologies to support tokenized assets).

This does not mean that Wall Street firms are going to embrace the ideals of crypto maximalists, such as leveraging decentralized exchanges and dropping KYC and AML compliance checks. But just as the financial markets establishment has adopted public internet and cloud services for many applications, the flexibility and cost savings of public blockchains will be a draw to the TradFi world as it looks to tokenize portfolios and funds to improve transaction efficiency.

Further adoption of emerging blockchain-based approaches for identity and compliance, such as the popular ERC3643 standard, are likely. Championed by Luxembourg-based Tokeny, ERC3643 has spawned a formal association of more than 100 participants and has engaged in a very effective advocacy, technology architecture, and education program to date.

Tokenizing Everything, Everywhere

Given the buzz around tokenization, it might seem that the impetus is to tokenize anything and everything. That view is supported by comments from Larry Fink, CEO of Blackrock, the world’s largest asset manager, who believes that tokenization will underpin "the next generation for markets.” Already, tokenization is being adopted by markets for securities, funds, loans, payment collateral, real estate, art, and more. So, what’s next?

We are seeing increasing interest in tokenizing IT infrastructure – compute, storage, networking – to support the needs of Web3 applications and artificial intelligence (AI) as it taps into all available resources to power model training and inference.

This tokenized DePIN (Decentralized Physical Infrastructure Network) approach will enable fractional ownership and usage of infrastructure, with an audit trail for management and monetization that will greatly improve the economics of deploying new AI reasoning models and AI Agents at scale.

A Tokenized Data-First Architecture for AI

For AI, tokenization will offer more than cost-effective infrastructure. Because it allows ownership and usage of fractional units of an asset to be managed using blockchain technology, a time-ordered audit trail can be constructed for assets, including for data objects that are processed by data-first architectures.

Data objects for AI include data inputs and outputs of models, and even the models themselves. By tokenizing data objects, a complete record of provenance can support trustworthy AI approaches where data outputs from models can be mapped directly to data inputs, and where updates to a model’s logic can be logged.

Moreover, tokenization coupled with emerging privacy-enhancing technologies (PETs), such as zero-knowledge proofs and homomorphic encryption, lends itself to allowing confidential and private data to be leveraged in transactions involving multiple participants.
Toward Decentralized AIThis traceability of inputs, outputs, and models coupled with confidential computing will underpin the emergence of AI Agents – autonomous applications that can perform complex tasks – which much of the IT industry is proposing as the next big leap in utility.

The major IT cloud platforms – such as Microsoft, Google, Amazon, and Meta – are looking to AI Agents to generate significant and sustainable revenues from AI. Much will depend on whether they can deliver cost-effective, useful, and competent AI Agents, but also on whether users trust the services provided by Big Tech.
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The DecentraTech Collective believes that AI Agents are best implemented as open-source and Decentralized AI applications that can be delivered at scale in ways that promote provable trust. Given the increasing acceptance of decentralization approaches, the time is right for democracy in AI to prevail.

The Infrastructure Imperative A core focus for the DecentraTech Collective is the acceleration of DePIN (Decentralized Physical Infrastructure Networks). This model promises to drastically reduce the capital expenditure (CapEx) required to build AI and telecommunications infrastructure by crowdsourcing compute, storage, bandwidth, and sensor data.

However, for this model to work at an enterprise scale, the underlying blockchain must be more than just secure; it must be invisible. It needs to handle millions of micro-transactions (rewards) with near-zero latency and negligible cost.

Why Solana has become the "DePIN Chain"

Through our Discovering DePIN series—including deep-dive technical discussions with the Solana Foundation—we have identified why Solana has emerged as the preferred Layer 1 for physical infrastructure projects.

It comes down to three operational metrics:

1. Speed: Averaging 400 milliseconds to finality. In the physical world (e.g., a car driving down a street), data moves fast. The chain must keep up.
2. Cost: Low transaction fees are non-negotiable when you are rewarding thousands of individuals for small contributions (like mapping a single street block).
3. The "Hybrid" Consensus: Its Proof-of-History (PoH) mechanism allows for the precise time-stamping required for location-based services (like GPS and mapping).

Validation in the Wild

The "Solana Thesis" is validated by the migration and growth of the sector's largest projects:

• Helium (Connectivity): The massive decentralized wireless network migrated to Solana to handle the scale of its IoT and Mobile hotspots. It empowers individuals to provide low-cost connectivity in exchange for HNT tokens.
• Hivemapper (Logistics): A decentralized mapping network that rewards drivers with HONEY tokens for collecting street-level imagery via dashcams. By turning daily commutes into data, it produces fresher maps than centralized competitors.
• GEODNET (Precision Location): A network of Global Navigation Satellite System (GNSS) stations that improve location accuracy to the centimeter level—critical for robotics and autonomous vehicles.

​The Strategic Lesson: Utility Over "Web3"

Perhaps the most important takeaway for enterprise leaders is the shift in narrative. Successful DePIN projects on Solana are not marketing "crypto" or "Web3." They are marketing better maps, cheaper connectivity, and accurate GPS.

As the ecosystem matures, the winning strategy is to promote product functionality and cost savings over the underlying decentralized tech stack. The goal is not to sell the blockchain; the goal is to sell the business benefit.

​In the last blog, I discussed the considerable compute needs of artificial intelligence (AI) applications and how Decentralized Physical Infrastructure Networks (DePIN) can offer a solution. As it happens, DePIN can also help address another infrastructure bottleneck that often limits AI – access to and storage of vast amounts of trustworthy data.
 
For generative AI models to produce accurate results – an essential capability to implement responsible and trustworthy AI requirements – they need to be trained. This activity teaches models how to perform a particular task and so they can identify patterns in data that is presented to them when run in real time. This training typically requires high quality data, and lots of it. And storage of that data can be challenging.
 
Even though physical storage costs are continually falling, building storage infrastructure that is continuously available, high performance and secure is a significant investment. Moreover, given that AI models will likely want to have access to increasing quantities of data as they are developed, ongoing costs will almost certainly increase over time.
 
Adopting a DePIN approach to address AI data storage capacity has the potential to accelerate scale up while reducing costs. As with AI compute, DePIN would tap into infrastructure that is provided by many entities, including startups, small/medium enterprises, communities, and individuals, which would participate in the storage pool in return for cryptocurrency-based rewards.
 
In addition to reduced build out time and costs, the decentralized architecture of DePIN can offer other benefits compared to traditional centralized data centers, including tamper and censorship resistance (by storing hashes of data to determine whether it has been modified), improved resilience (by replicating data blocks across network nodes), and increased performance. Reduced power consumption is another likely benefit.

Compared to other #DecentraTech projects, including DePIN compute farms, DePIN data storage is already well developed and established, with several open source and commercial offerings available and significant production use cases to learn from. Examples include Arweave, Codex, DeNet, Filecoin, and Storj.
 
A number of decentralized storage offerings are based on a set of open-source Distributed Hash Table protocols known as the Interplanetary File System (IPFS). The project was started in 2014 by Juan Benet and his company Protocol Labs and the first (generally considered) useable implementation of the IPFS protocols was released as Kubo in April 2016. Both IPFS and Kubo have since been updated, and Kubo is cited by the project as the most popular implementation of IPFS in use today.
 
Another implementation of IPFS that has been widely adopted for real world applications by businesses, the scientific community, activist groups, and socially oriented nonprofits is Filecoin.
 
Launched in 2017 and now governed by the Filecoin Foundation, Filecoin adds a “Proof of Storage” incentive function to the core IPFS protocols to reward those providing the physical storage to the network. As of August 2024, the total capacity of the Filecoin network was 23 exbibytes across some 40 countries, with 2 exbibytes of user data being stored by around 2,000 entities (one exbibyte = 1,152,921,504,606,846,976 bytes, roughly equivalent to 1 quadrillion pages of plain text type).
 
Some of the higher profile users of Filecoin include NASA, the US Geological Survey and the National Institutes of Health. More than 500 entities have datasets of more than 1,000 tebibytes, while the Internet Archive’s Democracy Library stores more than a pebibyte of open government data.

Proponents of Filecoin cite its ability to store vast quantities of data, provide proof that it has been stored securely and not altered, and its decentralized architecture that makes it resistant to tampering, as ideal attribute for responsible AI workloads, where an audit trail of data inputs and models provides provenance and promotes trust in the outputs of models.

Recognizing that it offers such audibility and security benefits, Filecoin has recently announced several partnerships related to expanding its use for AI applications. For example, SingularityNET is focusing on securing metadata for verifiable model training, while Eternal AI and EQTY Lab is tapping Filecoin to validate model lineage.
 

Many in the blockchain and MedTech world have fond memories of this day a year ago, when the Blockchain and Digital Transformation in Health 2020 symposium was held in Austin, TX. One of the conversations among the 100+ participants that gathered that day was the breaking news that the first cases of coronavirus had been detected in the U.S. A question that many had was what the impact here would be. Tragically, we now have at least a partial answer to that one.
 
The symposium – a unique collaboration between the Austin Blockchain Collective and Dell Medical School – featured keynotes from UCSD Health and IBM and combined presentations and panels from commercial innovators and academia. As such, it acted as a catalyst for a number of important conversations and partnerships that have continued since.

​DecentraTech is the short notation for decentralization technology. The business world already commonly uses terms like FinTech to mean financial technology, or MedTech for medical technology, or MarTech for marketing technology. Thus, adopting DecentraTech to refer to a collection of technologies that allows decentralization to be adopted by businesses is both consistent and long overdue.
 
To step back for a moment to consult the Miriam-Webster dictionary, decentralization is “the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.”
 
The concept of decentralization as an organizational approach is not at all new, having originated in France 200 years ago. Technological decentralization – which in current times is a requirement of most manifestations of decentralization – became a possibility with the creation of the internet, conceived as an open network that anyone can access, based on common standards and with no central governance.
 
Ironically, it is now increasingly accepted that the most popular commercial services delivered via the internet, especially the world wide web, are products of centralized corporations. And many consider that some of those players – including “Big Tech” companies such as Google, Facebook and Twitter – now wield too much control over service provision and personal data ownership for the public good.

One of the many with concerns about the power that Big Tech has amassed is Tim Berners-Lee, who created the web in 1990. He is now working on Solid, an open-source effort to reinvent the web so as to allow individuals to control their personal data. More broadly, Web 3.0, a term coined by Ethereum co-founder Gavin Wood, who went on to form the Web3 Foundation, is focused on creating “a decentralized and fair internet where users control their own data, identity and destiny.”

As a result of the recent actions of a few high profile companies – including Twitter cancelling the account of the then-sitting POTUS, and online financial app Robinhood suspending retail investor trading in certain wildly popular stocks – calls for the establishment of decentralized services that are censorship-resistant have grown loud.
 
As it happens, Twitter – or at least its CEO Jack Dorsey – has been pondering the responsibilities that come with operating a forum for open discourse in an era where some use it to spread misinformation and hate speech that can have public safety consequences. Following Twitter’s recent decision to suspend and remove a number of accounts, Dorsey wrote (on Twitter) that “I feel a ban is a failure of ours ultimately to promote healthy conversation.”

In the future, Twitter might be able to sidestep similar actions by becoming a decentralized service where (presumably) moderation processes would be under the jurisdiction of the crowd. At the end of 2019, it kicked off the bluesky project, which Dorsey characterizes as “an initiative around an open decentralized standard for social media. Our goal is to be a client of that standard for the public conversation layer of the internet.” A few weeks ago, ​​the project released a research paper covering a number of  existing decentralized social media ecosystems and noted that it is eager to hear about other projects. “Our DMs are open!”

While bluesky is, well, still just that, other decentralized applications (DApps as they are called) of many kinds are already being rolled out. Indeed, the bitcoin cryptocurrency DApp has been operating on its built-for-purpose Bitcoin blockchain for more than a decade.
 
Some blockchain architectures – often referred to as Enterprise Blockchain – have been designed to support business transactions relating to privacy-oriented consortia models. Fabric, an open source blockchain governed by the Linux Foundation’s Hyperledger initiative, has been adopted by the likes of IBM and Oracle for their commercial platform products. 
 
IBM’s platform has itself been leveraged by several consortia, such as Food Trust (focused on safety in the food supply chain) and TradeLens (for trade documentation collaboration between all parties involved in international shipping and logistics). 
 
Meanwhile, blockchain specialist R3, with its private Corda platform, has worked with a number of financial services and healthcare participants in areas such as trade finance, syndicated loans, claims processing and patient information synchronization. For those wondering whether blockchain is a business reality, Gartner’s latest Hype Cycle chart (below) believes that for enterprises, it’s actually becoming very useful. 

General purpose public blockchains supporting open-to-all DApps are also emerging (but Gartner shows them as very early stage). The leader today is Ethereum’s mainnet, though other blockchain platforms are fast being adopted for DApps, including Cardano, Hadera Hashgraph, Kadena, Polkadot, NEAR, NEM, Solana, Telos and VeChain. 
 
A wide variety of open DApps have been launched, including cloud-like storage, prediction markets, wide-area mesh networks for IoT devices, provenance of goods in supply chains and consumer-driven advertising. The list seems to expand weekly, if not daily..
 
Over the past year, the most popular class of DApps have been for Decentralized Finance, or DeFi – a financial system built on DecentraTech and with no intermediaries (like banks or brokerges). DeFi applications now exist for stablecoin payments, lending, exchanges and derivative products. DeFi is hot – since the beginning of 2020, the monetary value of the DeFi ecosystem has risen from around $700 million to nearly $40 billion today. No wonder that some established financial markets players are not only investigating cryptocurrencies like bitcoin but are also now exploring DeFi opportunities.
 
Today, while there is much (often passionate) debate on the relative merits of public/permissionless and private/permissioned blockchain approaches, they both represent degrees of decentralization. “Decentralization isn’t a binary thing, it’s a spectrum,” noted Tushar Jain, a managing partner of crypto fund Multicoin Capital during a webcast discussion.
 
What’s clear, though, is that as the degree of decentralization increases, so too does the complexity of achieving it in a way that is reliable, performant and scalable, while also offering ease of use and safeguards against market volatility, technical glitches and bad actors. While businesses are experiencing a certain FOMO when it comes to opportunities presented by participating in DApps, they need to be able to quantify and mitigate risks – sometimes in order to satisfy shareholders and regulators. 
 
So-called Enterprise DeFi is for sure a work-in-progress but this year could see it break out. Joe Lubin, founder of Ethereum specialist ConsenSys, reckons that “DeFi is going to be very attractive to enterprise, and I expect between 9 and 12 months that we’ll see some significant enterprises using DeFi mechanisms.”
 
One of the core goals of the DecentraTech Collective is to educate the business community about real-life experiences with decentralization and the technologies that are enabling it. Blockchain is clearly a cornerstone of what we call the DecentraTech Stack, since it provides consensus mechanisms for participants to agree on particular events/facts, and immutability to ensure that those agreements cannot be tampered with.
 
But DecentraTech encompasses other technologies too, such as cryptographic proofs, decentralized storage, peer-to-peer messaging, self-sovereign identity, and even edge computing. A list of technologies (which is subject to revision and open to debate) that the Collective plans to focus on is posted here.
 
While bringing the business community up to speed on decentralization and DecentraTech is key, the Collective plans to do more than simply provide education. Through its practical advocacy initiatives it will actively work with technology innovators and open-source projects to launch and promote their value propositions. It intends to not only chronicle how businesses are adopting decentralization and provide them with directions but practically accelerate their efforts to do so. 
 
Please be in touch if your interest in decentralization, DeFi or DecentraTech has been piqued!

​Hyperledger, the Linux Foundation’s blockchain initiative, just celebrated its fifth birthday. Initially known as the Hyperledger Project, it originally focused on a single enterprise blockchain development – a private/permissioned platform dubbed Fabric. Its early members were a couple of dozen major corporates, with IBM as a key champion, influencer and code contributor.
 
Five years on, Hyperledger has grown substantially. It now has more than 200 members big and small and comprises 16 core projects, including competing ledgers, development tools, identity frameworks, etc. Until recently, however, its focus remained on the private blockchain space. That changed in 2019 with the announcement of Hyperledger Besu, an Ethereum client built by ConsenSys, which supports both private and public chains. 
 
According to Hyperledger’s annual report for that year, “Besu represents the growing interest of enterprises to build both permissioned and public network use cases for their applications.” Another report in 2019 – commissioned by consultants EY and analyst firm Forrester Research – found that some 75% of enterprises were interested in exploring public blockchains. 
 
As those enterprises embark on their public blockchain research, they will find more than a few variants to choose from. Ethereum is by far the most established, and with its ETH 2.0 scalability upgrade now begun, it will surely remain the leader for some time to come. But many other public chains are now launched and being developed, including the Web3 Foundation’s Polkadot, Cosmos, Cardano, DigiByte, Decred, EOS, NEAR, Solana, NEM’s Symbol, VeChain, etc.
 
With so much innovation focused on (and investment in) the public blockchain space, and relatively little on private variants, bets against enterprise adoption of public chains would attract very long odds indeed.
 
Scalability aside, perhaps the most common criticism of public chains is that they are not relevant for – indeed not usable by – enterprises that need to keep their vast data assets private for competitive or regulatory reasons. It’s a valid POV, but this year the Baseline Protocol has emerged to counter it. Baseline is going to be very useful for businesses. And it’s going to be huge.

Baseline is not a blockchain platform. Rather, it describes a technique that leverages blockchain, peer-to-peer messaging and zero-knowledge cryptographic proofs to keep enterprise data stores – so-called systems of record – in synchronization with one another and so support business processes that extend across entire ecosystems.
 
When one considers the numerous business requirements to synchronize confidential data stores both within companies and between them and their partners on a global scale, the opportunity to achieve this alignment efficiently becomes clear. Common examples of the need for such synchronization include:

• Financial trading, where inconsistent data between investors and intermediaries leads to broken trades, costly reconciliations and increased risk.
• Healthcare, where access to personal healthcare information is often regulated but needs to be shared between providers to improve patient outcomes and reduce costs for all.
• Supply chains, where multiple participants are involved to purchase, transport and pay for goods – including perishable items like food and vaccines – both quickly and efficiently.

 
To address this opportunity, the open-source Baseline Protocol leverages blockchain as a time-ordered log of hashed proofs of existence to create a common framework for enterprises to run business processes. 
 
Crucially, this approach does not require the data that is stored within enterprises to be moved on to a common blockchain. The data stays in its existing repositories, whether they be ERP systems from the likes of SAP and Microsoft, CRM applications like Salesforce, traditional databases or even private enterprise blockchains. To re-iterate: data remains in its original place, governed by whatever security and privacy controls and mechanisms the enterprises deem necessary.
 
Business interest in Baseline is in its early days, but the momentum behind it is clear. As well as ConsenSys and EY, Accenture also recently became a project sponsor. Significantly, Accenture and EY were ranked as 2nd and 3rd, respectively, in an annual ranking of global enterprise blockchain service providers by HFS Research. 

Baseline does not actually mandate the use of any specific blockchain platform, but it does specify what the platform needs to provide. It needs to be open to all, globally available and always running, which are attributes typically associated with public blockchains. The first reference implementation of Baseline has been built on Ethereum, which is not surprising given the project’s ConsenSys and EY leadership.
 
John Wolpert, a ConsenSys executive who played a key role in the formation of Hyperledger when he worked at IBM, describes blockchain’s use within Baseline as “boring” and he should know. Along with Paul Brody of EY, Wolpert is the brains behind Baseline, and is its current steering committee chair. Within Baseline, he positions the blockchain component as middleware that connects data stores without becoming one itself.
 
While Wolpert uses the term “decentralization” economically, he acknowledges that the technology architecture with which it is associated aligns well with the requirements of a blockchain for Baseline. As such, as Baseline becomes increasingly adopted, it may become a de-facto poster child – maybe even a trojan horse – for the decentralization movement as it applies to businesses.
 
Even with the rapid evolution of the Decentralized Finance (DeFi) space championed by a growing number of startups, business alignment with decentralization is in its experimental phase. Not least, that’s because of the challenges of embracing it while also reaping the commercial rewards for doing so. Most enterprises are built to benefit from centralized business models and find that even modestly decentralized business initiatives, such as consortia, are time consuming to form and difficult to manage.
 
While [David] Johnston’s Law, which states “Everything that can be decentralized will be decentralized” remains a popular vision, it is clear that it is also aspirational. That said, for businesses wanting to make a start on realizing that vision, implementing Baseline – or Baselining a business process as it is termed – could be a useful first step. And one with a tangible business benefit.

​I’ve known for a long time that healthcare relies on data in order to operate (no pun intended) effectively, safely and efficiently. It’s also been apparent that current processes to capture and share data are pretty much broken — one example that most patients can relate to are badly designed paper forms, usually partially completed with bad handwriting, and then faxed between providers. Some of it might end up being manually entered into an EHR system, mistakes and all, which of course can’t communicate digitally with similar systems at other providers.
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​All that paper, manual processing and silo-ed databases will need to change, and not just to make healthcare delivery more efficient and less costly for payers and providers, and to offer better outcomes for patients. Here’s why …