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- IOTA founder Dominik Schiener said that Ethena Lab’s Converge and Ondo Chain betray the decentralized ethos of blockchain technology.
- He criticized their focus on control and regulatory capture, likening the trend to past industry failures like IBM’s Hyperledger.
IOTA founder Dominik Schiener has condemned the emergence of permissioned blockchain networks, pointing the finger at Ethena Labs’ Converge and Ondo Chain. According to him, such networks go against the initial vision of decentralized finance (DeFi) by focusing on control rather than accessibility.
IOTA Founder Lashes Out At Ethena & Ondo
Schiener spoke out in reaction to Ethena Labs’ recent launch of Converge, a settlement network intended to bridge traditional finance and digital assets, as mentioned earlier. Converge was built in collaboration with Securitize and is meant to be a specialized platform for financial transactions, backed by Ethena’s ENA token and focused on USDe and USDtb stablecoins. Ethena Labs referred to Converge as “the first purpose-built settlement layer where TradFi will merge with DeFi.
Securitize, a lead partner in the effort, has already sold on the order of $2 billion of tokenized assets, including products from large institutions like BlackRock, Apollo, Hamilton Lane, and KKR. Ethena Labs highlighted that “Securitize will deploy on Converge as the issuance layer for its core future tokenized assets.”
The Converge network will be run by institutional validators who will be required to stake ENA tokens in order to participate. USDe and USDtb stablecoins, both of which will be utilized as native gas tokens, will make transactions “more seamless and efficient.”
Schiener, on the other hand, was vehemently critical of the move. He said that permissioned networks go against the very principles of blockchain technology. “I always used to say that the bigger competition for us was permissioned blockchains,” he said.
He went on to compare the trend to past industry collapses. Schiener wrote, “After the death of IBM’s Hyperledger, we have gone full circle, with RWA protocols like Ethena and Ondo launching their own permissioned networks in a game attempting to control the ecosystem and play regulatory capture.”
The IOTA creator dismissed these initiatives as not being capable of meaningful decentralization. He declared,
This is not bringing finance onchain. This is not leveraging decentralized technologies to disintermediate. This is not how we build composable, interoperable ecosystems. This is not empowering people.
Schiener’s rebuke also comes as Ondo Chain, a Layer 1 blockchain intended to enable the use of tokenized real-world assets (RWAs) in institutional markets, has gone live. Ondo Chain combines public blockchain openness with permissioned security features. It natively supports RWAs, such as Ondo GM tokens, which contribute to network security, oracles, and bridges, as highlighted in our previous article. Nonetheless, the IOTA founder strongly opposes the launch akin to Ethena Labs case.
How IOTA Stands Out
When asked if the new version of IOTA would still be permissionless, Schiener highlighted its decentralized nature. “Up to 120 validators with delegated Proof of Stake,” he explained, pointing at IOTA’s commitments to community ownership.
He also added, “We have one of the most distributed token supplies because we’ve been on the market for more than a decade, and when we created IOTA, 100% of the token supply was given to the community.” Schiener also hinted at “some exciting new consensus research” to be revealed soon.
