Institutional investors are growing cautious about blockchain infrastructure that promises high speed but fails under pressure.
Following the liquidation-driven market turmoil over the weekend, Sonic CEO Mitchell Demeter said the next phase of blockchain growth depends on whether networks can maintain uptime and compliance standards when volatility surges.
In an interview with Yellow.com, Demeter said that institutions entering digital assets are less interested in theoretical transaction speeds and more concerned with operational resilience.
“As institutional players enter, the focus will shift from how fast a blockchain can settle transactions to whether it can stay functional when volatility hits,” he said.
During Friday's market stress, several major networks experienced congestion and failed transactions, raising questions about their readiness for institutional use.
Demeter said such incidents reveal a core weakness in current blockchain design.
“The industry needs systems that perform at peak load without shutting down,” he said. “That stability is what institutional investors expect from any infrastructure they use.”
To address this, Demeter said Sonic is expanding its executive team to include specialists in government relations and compliance.
The goal, he said, is to align with evolving regulatory frameworks rather than resist them.
“We’re focusing on building relationships with governments to ensure that the frameworks being established are reasonable for the industry,” he said.
The shift in tone reflects a broader change across the blockchain sector.
After years of competing on speed and throughput metrics, many networks are now reorienting toward reliability, risk management, and real-world interoperability, priorities that mirror traditional financial systems.
Demeter said institutions will ultimately judge blockchain infrastructure by its ability to stay online during high-volume trading, not by how fast it moves in ideal conditions.
“Institutions won’t move on-chain for promises of speed — they’ll move when they see stability,” he said.
The recent market disruption served as a reminder that technical efficiency alone will not earn institutional trust.
For blockchains to play a larger role in global finance, they must prove they can withstand the same shocks as the systems they aim to replace, Demeter said.