Opinion by: Joaquin Mendes, chief operating officer of Taiko
For centuries, value moved between hands: gold for grain, livestock for land. No intermediary decided on arbitrary values; the price was determined directly between the parties. No intermediary decided how much a cow was worth, whether the deal was fair or whether someone was qualified to make the trade or not. The exchange was simple: One party had something the other wanted, they agreed on terms, and the transaction was concluded.
These exchanges have grown more complex. Banks hold funds, brokers trade assets, and custodians verify ownership. This has erased the relationship between buyer and seller, and diminished agency. Today, institutions set asset values, control access and define conditions.
This growing institutional adoption is promising, but the approach matters. Institutions like BlackRock and Grayscale are investing heavily in tokenized real-world assets (RWAs), yet many rely on permissioned blockchains, centralized layer 2s and private networks — structures that undermine blockchain’s promise by reintroducing unnecessary intermediaries.
New gatekeepers
Permissioned chains restrict participation and terms, while centralized chains become single points of failure, allowing a few to dictate transaction order and censor trades. Private chains close off assets, placing control in the operator’s hands and severely limiting interoperability.
Consider a tokenized property worth $10 million. If split into 10,000 pieces and traded on a permissioned chain or centralized layer 2, participation will still require approval from a gatekeeper. The value of this asset will remain subject to platform rules rather than a direct agreement between the parties. The middleman has not been removed; they’re just onchain now.
The industry chooses control
The reasons are straightforward.
Regulatory compliance is the primary concern. Regulators require identity verification, transaction monitoring and enforcement capabilities. The industry assumes this demands centralized control (oversight by a single operator) because that’s how traditional finance operates. If authorities need to freeze assets or reverse transactions, a centralized operator (one entity in control) can act immediately.
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This level of control increases regulatory risk: A centralized blockchain can become a regulated intermediary, imposing new licensing and custody obligations that operators did not anticipate. The risk of unintended consequences is high.
Legal liability creates hesitation. These genuine concerns are valid, but responding by recreating centralized infrastructure on a blockchain defeats its core purpose.
The real solution
Regulatory requirements do not mandate centralized infrastructure. ‘Know Your Customer’ (KYC) and transaction monitoring work more effectively at the application level on public chains where transparency is inherent. Public rollups inheriting Ethereum’s security provide key benefits: They deliver compliance, ensure transparency and support broad participation more reliably than permissioned alternatives.
Based rollups solve centralization without compromising institutional requirements. Ethereum validators handle sequencing, removing single points of failure. Transactions settle with Ethereum’s full security. This approach offers benefits such as minimizing operational risks, improving regulatory alignment and maintaining asset accessibility. The base layer stays permissionless, while apps implement required compliance.
Critically, a well-designed blockchain is trustless by design, ensuring the integrity of the global ledger through cryptographic and economic consensus rather than relying on human trust. This eliminates the need for a privileged operator, addressing security concerns and regulatory risks from centralized control.
This technology exists and functions. Institutions can apply compliance and identity checks while meeting regulations — without adding new gatekeepers.
The stakes
The RWA market may reach trillions in value. Today’s infrastructure choices will decide if assets trade freely or if traditional finance is simply replicated on a new ledger.
Persisting with permissioned or centralized blockchains will only move old barriers onto new systems. Access, participation and wealth-building will remain in the hands of gatekeepers, contrary to the goals of blockchain technology.
Stop building workarounds
The industry already has the answer. Ethereum is the most decentralized, neutral, reliable and secure blockchain. Rollups inherit these strengths, offering fast, low-cost transactions, institutional-grade settlements and the transparency mandated by regulators. Benefits include increased market access, resilient infrastructure and built-in compliance. They meet all RWA needs without reintroducing the intermediaries blockchain was meant to eliminate.
Institutions sticking with centralized or permissioned approaches make the wrong choice. Recreating traditional finance on blockchain repeats the same risks: single points of failure, dependence on operators and gatekeeper-controlled access.
Embrace rollup infrastructure now to enable true compliance and real decentralization. Reject legacy barriers and shape a fairer, more open financial system.
Opinion by: Joaquin Mendes, chief operating officer of Taiko.
