Institutions Pulling Out of Ethereum as the Narrative Collapses: 'Big Tech and Wall Street's One Pick is Hyperliquid' | Seo Dong-ju, Kim Dong-hwan, Jo Dong-hyun, Undefined Labs CEO

Summary

Jo Dong-hyun, CEO of Undefined Labs, explains that Ethereum's narrative has collapsed as institutions retreat from on-chain DeFi due to AI-driven hacking risks, leaving Ethereum as only a partial settlement rail. Meanwhile, he highlights Hyperliquid as the single biggest winner, with its orderbook infrastructure being adopted by Wall Street and big tech to tap crypto liquidity. The talk also covers RWA tokenization trends, the bottleneck of stablecoin availability, and the broader absorption of crypto networks by traditional finance.

• Institutions are pulling back from pure on-chain DeFi on Ethereum due to increasing hacks, now using off-chain custodians like Anchorage while keeping only 50% of activity on-chain.
• Ethereum's value accrual is shrinking because it is becoming just a distribution rail rather than the on-chain financial hub, causing it to underperform even as RWA markets grow.
• Hyperliquid is presented as the standout success, with its orderbook being used by big tech and traditional finance to access crypto liquidity, generating significant fees.
• The shift marks a broader trend where crypto networks are being absorbed as infrastructure by traditional financial and tech giants, rather than replacing them.
• RWA tokenization is advancing, but the bottleneck is stablecoin supply for collateral, and no clear winner among RWA-focused startups has emerged yet.
• Ethereum Foundation is restructuring to spin off enterprise sales into a separate company, signaling that even Ethereum is adapting to a sales-driven, less ideological era.