Grayscale: Tokenization to favor institutional chains first, then ETH and SOL

The on-chain transition of the tokenized asset market is expected to take more than a decade, with institution-focused platforms like Canton having an initial advantage before open networks such as Ethereum and Solana become competitive in the long run, according to a report from Grayscale. The report identified Ethereum, Solana, Canton, Avalanche, BNB Chain, and Chainlink as key protocols poised to benefit. Grayscale noted that the tokenized asset market has grown 217% year-over-year and that the approximately $300 trillion securities market will ultimately move on-chain. The report explained that institution-focused networks are favorable for initial adoption due to built-in compliance and privacy features, while hybrid chains like Avalanche L1, Base, and Arbitrum combine institutional environments with open ecosystems. Although open networks offer deep liquidity, their privacy solutions are still developing. However, Grayscale stated that once these networks secure privacy through technologies like zero-knowledge proofs, they will be able to compete directly for institutional capital.