For years, competition among Layer 1 blockchains was largely defined by technical performance: transactions per second, block times, gas fees, and developer activity.
However, as institutional investors become more involved in crypto, priorities are starting to shift. Banks, funds, and major financial companies increasingly evaluate blockchain networks not only by performance, but also by how governance is structured, who owns the tokens, how underlying assets are verified, who audits the systеm, and what legal framework supports the project.
For institutional capital, these questions are becoming almost as important as transaction speed and cost.
Compliance Is Becoming a Key Selection Criterion
The shift is already visible in institutional behavior. According to the cited data, around 66% of institutional investors now consider regulatory compliance a key factor when choosing a crypto custodian, compared with only about 25% in 2025.
Attention to key security and transaction-signing mechanisms has increased even more sharply, rising from around 8% to 66%.
The reason is that institutional capital brings lawyers, auditors, investment committees, compliance specialists, and risk management teams into the crypto industry.
For these participants, a fast blockchain with low fees is not enough. They want to understand who controls the systеm, how responsibility is distributed, and whether the project’s claims can be independently verified.
Tokenization Requires Verification of Real-World Assets
Blockchain is effective at recording what happens directly onchain. It can show who owns a token, when it was transferred, and what transactions involved it.
However, that alone is not enough for Real-World Assets (RWA).
For example, if a token represents a commodity stored in a warehouse, blockchain can verify the ownership history of the token. But it cannot independently prove that the commodity actually exists, that the warehouse documentation is legitimate, or that the accounting records match what investors see onchain.
That is why independent audits, custody verification, accounting, and legally enforceable ownership rights are becoming critical for institutional tokenization.
The Tokenized Asset Market Has Already Moved Beyond Experimentation
The market for tokenized financial instruments has already reached meaningful scale. According to the cited figures, the total value of tokenized products linked to U.S. government debt has approached $15.95 billion, with more than 67,000 holders.
BlackRock’s BUIDL fund represents a significant share of this market at around $2.7 billion. Franklin Templeton, WisdomTree, JPMorgan, and other major financial institutions are also active in the sector.
This scale shows that the tokenization of real financial assets is gradually moving from an experimental phase toward full financial infrastructure.
At the same time, putting an asset onchain does not eliminate the need for custodians, accounting, legal documentation, or independent verification. On the contrary, ensuring that the digital token accurately matches the underlying physical or financial asset becomes even more important.
Ault Blockchain Focuses on Asset Verifiability
One project being built around this model is Ault Blockchain, a subsidiary of Hyperscale Data, whose shares trade on the U.S. public market.
Its parent company already operates under reporting, disclosure, and audit requirements associated with public companies.
That experience is being applied to the development of Ault Blockchain, which is focused in part on tokenized commodities and warehouse receipts.
In such a systеm, it is not enough to move a token quickly between users. The network must also support proof that the corresponding real-world asset exists, that it is properly stored, and that the accounting behind it is accurate.
This is becoming one of the key infrastructure challenges for large-scale institutional tokenization.
Central Banks Are Also Testing Tokenized Settlement
Interest in this type of infrastructure is not limited to crypto companies. Banks and international financial institutions are also exploring tokenization.
The Bank for International Settlements’ Project Agorá brings together several central banks and dozens of major financial institutions to study tokenized cross-border settlement.
During one phase of testing, participants conducted real-value transactions totaling approximately 800,000 Swiss francs across 17 different scenarios. Average settlement time was around 80 seconds.
This is a useful example of what institutional blockchain adoption actually looks like: not just speed, but technology combined with governance, legal controls, compliance, and operational procedures.
Institutional Investors View Tokenomics as Ownership Structure
Another increasingly important issue is token distribution.
Many Layer 1 blockchain projects followed a similar model: venture funds and early investors received significant token allocations at low prices, founders retained large positions, and those assets were gradually unlocked over time.
This structure helped finance large ecosystems quickly, but it also created concentrated ownership and predictable selling pressure as major token allocations unlocked.
Institutional investors are examining these factors more closely. They want to know who controls the supply, how much insiders paid, when their tokens unlock, and what influence large holders have over network governance.
What the crypto industry often calls tokenomics is, from the perspective of traditional finance, essentially an ownership structure.
Ault Proposes a Different Token Distribution Model
Ault Blockchain says it is taking a different approach to distributing its native AULT token.
The project does not plan a public token sale. Instead, distribution is designed to follow a predetermined ten-year schedule with declining emissions.
Licensed mining nodes earn tokens by performing specific useful work for the network.
The initial workload focuses on verifiable randomness, while the model is intended to expand into services such as oracles, indexing, and other computational tasks.
The core principle is that participants earn the network asset by contributing useful work to the infrastructure, rather than simply receiving large allocations through early investment rounds.
This creates a different ownership history compared with networks where a large share of supply is initially controlled by a small group of funds and insiders.
Regulation Is Becoming Part of Blockchain Architecture
For a new generation of projects, regulation is increasingly becoming part of the network design rather than an external constraint.
Although the U.S. digital asset regulatory framework remains incomplete, market participants now have significantly more guidance on token classification, staking, custody, and investment contracts than they did several years ago.
Ault Blockchain launched a testnet designed around financial settlement and EVM compatibility.
The project combines blockchain infrastructure with a governance model based on Wyoming DAO LLC, licensed infrastructure participants, and formalized economic rules.
This approach is intended to provide a clearer systеm of oversight and accountability than a model based solely on broad claims of decentralization.
Permissionless Blockchain Does Not Necessarily Mean No Rules
One idea behind these systems is to separate open access to settlement infrastructure from the requirements imposed on participants interacting with regulated assets.
Companies can operate within defined governance and compliance frameworks while settlement takes place through blockchain infrastructure that is not fully dependent on a single private intermediary.
In this sense, permissionless infrastructure does not necessarily mean an absence of rules. Rather, it can describe a financial systеm in which rules still exist, but no single centralized intermediary can arbitrarily shut off access to settlement.
A New Standard Is Emerging for Layer 1 Networks
Auditing, corporate governance, and fair token distribution do not automatically guarantee the success of a blockchain project. They do not create liquidity, users, or developers by themselves.
However, the arrival of institutional capital is gradually changing the criteria by which blockchain networks are evaluated.
When tens of billions of dollars in traditional financial assets are already represented in tokenized form, and central banks and major financial institutions are testing blockchain-based settlement, raw performance alone is no longer enough.
The next generation of Layer 1 networks will increasingly be judged by governance quality, ownership structure, asset verification, custody systems, auditing, compliance, and legal architecture.
The first era of crypto focused on proving that decentralized networks could move value without traditional banks.
The next era will focus on a different question: whether these networks can withstand the same level of financial, legal, and audit scrutiny that has long been applied to traditional capital markets.