When trillions in institutional capital eye crypto markets, pure public chains hit a wall. Compliance isn't optional anymore—it's the gatekeeper.

Hybrid Layer1 architectures are emerging as the bridge. Picture this: banks tokenize assets on private subnets, keeping sensitive data off-chain, while ZK proofs validate reserve authenticity on the public ledger. Privacy meets transparency without compromise.

This isn't theory. Brazil's national payment infrastructure already runs on such rails. JPMorgan's Project EPIC? Same framework. Traditional finance giants are testing waters where regulatory comfort zones overlap with blockchain efficiency.

The deflationary token model adds another layer—value accrual through scarcity as adoption scales. Not every chain solving for institutional flows will survive, but the ones blending compliance, privacy tech, and real-world partnerships might just capture that $100 trillion opportunity.