[Recap] How Alt-L1s Are Capturing Institutional Market Share

On December 17, 2025, The Tie hosted an Innovator Series webinar exploring how alternative layer one blockchains are capturing institutional market share, moderated by Sacha Ghebali, Chief Strategy Officer at The Tie. The panel featured Ivy Kang, Head of Capital Markets at Plume Network; Howard Wu, Founder of Aleo; and Johnny Garcia, Managing Director of Institutional Growth and Capital Markets at the VeChain Foundation. The discussion examined the convergence of privacy technology, regulatory compliance, and real-world asset tokenization driving enterprise blockchain adoption.

Watch the full Webinar here:

Howard Wu identified privacy as the fundamental barrier preventing institutional blockchain adoption. Traditional L1s like Bitcoin, Ethereum, and Solana were built with full transparency, a feature that creates insurmountable problems for business applications. "Real world finance does not have this type of property when it comes to the UI/UX of money," Wu explained. When customers pay with transparent stablecoins, they reveal their entire wallet history and merchants expose their business intelligence to anyone who transacts with them. Wu characterized the industry as entering an "HTTP to HTTPS moment" that will unlock trillions in value.

Ivy Kang emphasized that permissioned chains have consistently failed to solve distribution problems. Plume Network, a modular Layer 2 built on Arbitrum focused on RWAfi, leverages permissionless architecture while building compliance at the protocol level through partnerships with TRM Labs and Predicate, enabling AML checks without traditional KYC. As a result, Plume has enabled 280,000 unique RWA holders, surpassing Ethereum to claim the top position globally. "We made them really accessible but also useful," Kang noted, explaining that users can stake liquid RWA tokens, use them as lending collateral, or also deploy them in AMMs.

Johnny Garcia presented VeChain's evolution from enterprise blockchain-as-a-service to a consumer engagement platform. Following its December 2 transition to delegated proof-of-stake via the Hayabusa upgrade, VeChain focuses on activating real-world user behavior through its VeBetter platform, which rewards users for simple activities (an example Johnny mentioned is using reusable coffee mugs at Starbucks). The platform has added 5 million new wallets and an additional 23 million transactions representing real-world actions. Garcia projected "15 million weekly average users interacting with enterprises in a meaningful way" by the end of 2026, supported by partnerships with UFC, BCG, Walmart, and Louis Vuitton.

Aleo launched its mainnet in September 2024 with Coinbase support and has since announced landmark partnerships. "We announced USAD, which is the first private and compliant stablecoin to come to market in crypto period," Wu stated. "And just last week we announced with Circle the launch of USDCX." These partnerships with Paxos and Circle demonstrate institutional appetite for privacy-preserving payment rails, with integrations underway for payroll providers like Request Finance and Toku.

Plume achieved a significant milestone by becoming the first blockchain-native entity registered as an SEC transfer agent for 40 Act funds, targeting the $150 trillion fund administration space. VeChain pursued MiCA compliance through European headquarters in San Marino, with all three tokens now registered under the regulatory framework. "It makes for much easier conversations when we can point directly to the registry," Garcia noted.

The panel concluded with forward-looking predictions: Wu forecasted private stablecoins dominating institutional attention in 2026, with full end-to-end encryption becoming the default by 2030; Kang projected stablecoin TVL doubling next year; Garcia projected up to 15 million weekly average enterprise-engaged users on VeChain by year-end 2026. The convergence of privacy technology, regulatory compliance, and real-world utility positions these alternative L1s to capture institutional market share that transparent chains cannot address.