Wall Street has arrived on blockchain. Firms including BlackRock and Franklin Templeton are now issuing investment funds on the Ethereum network, while decentralized exchanges generate quarterly revenues rivaling regulated platforms. More than $300 billion in institutional-grade assets now settle entirely on-chain.
Key Takeaways:
- Stablecoins reached $297.6 billion in Q1 2026, growing 37.2% year over year.
- On-chain businesses generated $587.9 million in quarterly revenue.
- Ethereum dominates settlement, with 60% of stablecoins and 95% of tokenized commodities.
The migration of traditional capital markets onto blockchain infrastructure has reached measurable scale in 2026. This finding comes from the first-ever Hybrid Finance Report from CoinShares and Token Terminal. The firms define hybrid finance as the intersection of three forces: institutional-grade settlement infrastructure, tokenization of traditional assets including treasuries and equities, and on-chain applications generating recurring revenues.
Read more: Cryptocurrencies: Bitcoin Hovers Around $77K
Stablecoins, which are digital tokens pegged to the U.S. dollar, reached $297.6 billion in on-chain market capitalization during the first quarter. That represents a 37.2% increase from the prior year. Market leadership remains concentrated among crypto-native issuers, including Tether, Circle, Sky, Ethena, and Paxos International, with approximately 60% of all issuance on Ethereum.
Tokenized investment funds emerged as one of the fastest-growing segments. Assets under management climbed to $9 billion over the quarter, a 181.3% jump year over year, CoinShares and Token Terminal found.
Growth has been driven largely by tokenized strategies backed by short-duration U.S. Treasury instruments, reflecting demand for low-risk, yield-bearing assets accessible through blockchain networks. Wall Street issuers including BlackRock and Franklin Templeton now compete alongside crypto-native firms such as Circle and Ondo Finance in this rapidly expanding market.
The settlement layer dominance positions Ethereum as core infrastructure for the emerging financial system. CoinShares, which offers futures-based exposure to bitcoin and ether through the CoinShares Bitcoin and Ether ETF (BTF ), has tracked the network’s evolution from speculative asset to institutional settlement layer.
On-Chain Exchanges Generate $588M in Revenue
The revenue picture reveals where value actually accrues within the blockchain stack. Leading on-chain businesses generated $587.9 million in revenue during the first quarter, with the total highly concentrated among a small number of trading platforms and stablecoin issuers, the report showed.
Hyperliquid shows the model’s potential. The decentralized derivatives exchange generated $178.7 million in revenue over the three-month period, with approximately 96% coming from trading activity rather than settlement fees. The platform operates its own foundational blockchain network while running the exchange, capturing the full economic flow of its core use case.
The data exposes a structural gap between economic value supported and revenue captured at the infrastructure level. Ethereum secures roughly $180 billion in stablecoin supply, which at a 4% yield implies about $7 billion in annual issuer revenue, CoinShares and Token Terminal noted. The network captures only a fraction through transaction fees since users pay per transfer rather than for holding assets.
Ethereum Faces Competition From Rival Networks
Alternative blockchain networks are competing for transaction volume by offering lower fees and higher throughput. Solana, Arbitrum, Base, and BNB Chain have captured growing shares of stablecoin issuance and tokenized fund settlement. Ethereum still maintains the dominant position across categories.
The CoinShares Altcoins ETF (DIME) tracks this infrastructure competition by providing exposure to alternative blockchain protocols beyond bitcoin and ether.
Tokenized stocks, which represent ownership in companies through digital tokens, reached $773.3 million in on-chain market capitalization during the quarter. That’s up from $27.6 million a year earlier, according to the report. The 2,697% increase reflects rapid development in this nascent category, driven primarily by crypto-native issuers including Ondo Finance and xStocks.
Approximately half of all tokenized stock issuance concentrates on Ethereum, CoinShares and Token Terminal found. The remainder distributed across Solana, BNB Chain, and Arbitrum.
Tokenized commodities climbed to $4.9 billion from $1.1 billion over the same period, the report showed. Gold-backed tokens dominate the category, with products from Tether and Paxos capturing most issuance. Approximately 95% of all tokenized commodity issuance concentrates on Ethereum.
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