Alibaba subsidiary is building an Ethereum L2: What this tells us about institutional adoption

Alibaba’s subsidiary, Ant Digital Technologies, has launched Jovay, an Ethereum Layer-2 network capable of handling 100,000 transactions per second, aiming to support the tokenization of real-world assets (RWAs).

This move reflects a broader trend of institutional adoption of public blockchains over private ones, driven by the need for liquidity, security, and scalability. Ethereum’s strong developer activity and ecosystem make it an attractive choice for institutions seeking to build on-chain solutions.

The report by Paradigm and Allium highlights that over two-thirds of TradeFi professionals are exploring DeFi, signaling a shift toward decentralized finance as a core component of traditional financial systems. While institutions seek control, Layer-2 solutions offer cost efficiency and access to liquidity that private blockchains cannot match, making them a strategic choice for capturing value in the evolving blockchain landscape.