Crypto: Why Institutions Still Prefer Ethereum Despite Faster Blockchains

TPS breakthroughs get engineers excited, but TradFi is looking at Ethereum because that’s where the liquidity is, says Kevin Lepsoe of ETHGas.

Ethereum continues to host the largest concentration of stablecoins and decentralized finance (DeFi) capital, even as successive waves of faster networks emerge.

Newer blockchains have promised higher throughput and lower costs, raising questions about whether institutional capital could eventually migrate away from Ethereum.

Kevin Lepsoe, founder of ETHGas and a former Morgan Stanley derivatives executive in Asia, said he expects Ethereum’s lead to endure, as institutions tend to prioritize capital depth over flashy performance.

“[Transactions per second] is the metric that gets engineers excited, but is that what drives capital to the blockchain?” Lepsoe asked in an interview with Cointelegraph.

“The capital is on Ethereum; the stablecoins are there. TradFi is looking at where the liquidity is,” he said.

Institutional capital brings scale and stability to a blockchain’s ecosystem. Large asset managers and tokenized fund issuers move capital in volumes that deepen liquidity and anchor stablecoin supply. Their presence can establish a network’s position beyond hype-driven retail activity that surges in bull markets and fades in downturns.

If institutions prefer to operate where most of the money already sits, then simply making a faster blockchain will not pull capital away from Ethereum.

Over the past several cycles, performance has become a weapon to attract users. Solana has emerged as Ethereum’s high-speed alternative, dubbed an “Ethereum killer,” though that label is debated. It onboarded retail traders through the non-fungible token (NFT) boom and the memecoin frenzy, but the heightened activities weren’t sustained in the long run.

Related: Can Solana shed its memecoin image in 2026?

Source: CoinTelegraph