Base Rate Competition: How On-Chain Infrastructure Will Reshape Institutional Allocations

As capital increasingly moves on-chain, institutions are now considering what will define the base rate for on-chain finance.

At the Vault Summit in Cannes, a panel moderated by Redwan Meslem of the Enterprise Ethereum Alliance brought together leaders including Merlin Egalite of Morpho, Rafael Mastroberardino of Franklin Templeton, Paul-Adrien Hyppolite of Spiko, and Lancelot de Ferrière of Hyli.
The panel discussed how on-chain money market funds and loan vaults compete for institutional capital, and how institutions evaluate allocations as their returns, liquidity, and risk profiles vary.
The discussion expanded beyond returns to address the infrastructure, risk framework, and operational constraints that determine whether these products can support large-scale institutional allocations.
At this point, we are well aware that institutional Ethereum is moving from experimentation to production.

Tokenization is no longer a major constraint. Now the problem lies in the subsequent steps.

The market is shifting from asset creation to asset utilization. “Now it’s very easy to tokenize an asset… but what do you do then? What do you do with that asset?”

This is the challenge institutions are currently tackling. Tokenization provides representation and infrastructure determines usability.

This distinction is very important. Assets only have significance if they can be allocated, integrated and managed within institutional systems.

The on-chain market is fragmenting into multiple base rates rather than converging on a single benchmark.

“There is a yield curve derived from cryptocurrency-backed lending… which is different from the yield curve of traditional finance. The two will probably not converge.”

These changes are transforming the way institutions approach cash management.

• Tokenized Money Market Funds: Stability and Predictability
• On-Chain Lending Vault: Market-Driven Returns and Flexibility

These products are not interchangeable; instead, they represent distinct infrastructure layers that perform different missions.

On-chain infrastructure enables a more accurate approach to risk modeling.
“Risk is a spectrum.”

This level of accuracy is essential for institutional allocation.

Instead of broad categories, risks can be defined by collateral, isolated by markets, and enforced through infrastructure.

This transition shifts risk management from policy to system design.

On-chain infrastructure is not monetized. Optimize existing yields.

“If the token is actually an asset… there should be no risk premium. Blockchain makes this much more efficient.”

These are fundamental to institutional adoption.
• Returns remain linked to the underlying asset.
• Infrastructure improves accessibility and capital efficiency.

In practice, this results in fewer intermediaries, faster settlements, and improved collateral utilization.

In some cases, this can reduce returns, which indicates a more efficient market rather than weakness.

On-chain systems provide improved visibility.

“Bringing real-time transparency… is actually very valuable.”

However, institutional constraints remain.

“Financial managers don’t want all of their information available to the market.”

These tensions highlight the need for infrastructure evolution.

Institutional Ethereum requires transparency for verification and privacy for execution. Addressing this issue is essential for production deployment.

The main constraint is integration, not product design.

“They don’t want to use separate protocols or new infrastructure. They want to keep it within their own system.”

This is a critical factor in determining adoption success.

Institutions need compatibility with existing systems, standardized interfaces, and predictable infrastructure behavior. Without these elements, even a high-quality product cannot scale.

Consistency is important as multiple products compete to define base rates.

This is not only a market problem, but also a coordination problem.

Agencies cannot allocate at scale without shared standards, interoperable infrastructure, and coordinated system design.

The Enterprise Ethereum Alliance solves this problem by aligning enterprises, defining standards, and enabling institutional Ethereum in production.

The question is no longer whether capital will move on-chain. The focus now is on how to allocate capital across competing infrastructure tiers. Yield alone does not determine the outcome.
What’s important is:

• trustworthy,
• completion,
• standard,
• and institutional adequacy.

The Enterprise Ethereum Alliance brings together asset managers, banks, infrastructure providers, and protocol teams to define the standards that will enable this transition.