It’s no secret that Ethereum (ETH -4.42%) has been in a rough patch lately. It simply can’t catch a break. In the last month, it has plummeted by more than 25%, and it’s only up a modest 4% year to date. The situation has been so dire that Ethereum Co-founder Vitalik Buterin even posted an artificial intelligence (AI)-generated image of a bull with a sign around its neck that read, “Ethereum is good,” poking fun at how bad things have gotten.

But things are better than they seem, and one recent development proves this.

I have been told that I need to “do less philosophizing and do more ethereum bullposting”. Hence, here is an ethereum bullpost, courtesy of stable diffusion 3 inpainting + gimp. pic.twitter.com/ZcPjNVImpn

— vitalik.eth (@VitalikButerin) August 21, 2024

Sony meets Ethereum

On Aug. 22, Sony (SONY -2.13%) announced that it would be launching its own blockchain, Soneium, on Ethereum, through a joint venture with Startale Labs. Soneium is a Layer-2 blockchain, meaning it operates on top of Ethereum, leveraging its security while offering faster and cheaper transactions.

This layered design is crucial because it addresses one of the most significant issues in blockchain technology today: scalability. By using Ethereum’s security as a foundation, Soneium can provide a more efficient platform for transactions without compromising on the trustworthiness that comes from Ethereum’s extensive network.

But why does a company like Sony need a blockchain? The answer lies in Sony’s vision of integrating Soneium into its existing business ecosystems, such as Sony Music, Sony Pictures, and Sony Bank, among others.

As to what those new business models might look like, Sony could use Soneium to facilitate the direct sale of digital music and movies, allowing artists and creators to monetize their work more effectively while ensuring transparent royalty payments. Additionally, Sony could develop decentralized applications (dApps) on Soneium for managing intellectual property rights, enabling more secure and efficient licensing of its vast content library across different platforms.

Jun Watanabe, chairman of Sony Blockchain Solutions Labs, emphasized the strategic intent behind Soneium, saying in a statement, “We will work to create diverse businesses and new use cases with the aim of reaching as many users as possible with the customer value that can be enjoyed only with Web3 technology.”

The common thread arises through Ethereum

Sony’s announcement might not seem like a big deal at first glance, but it’s worth noting that it is the 132nd largest company by market cap in the world and the first non-financial company to launch its own proprietary blockchain.

Sony is joining a growing list of notable companies that are betting the future of business will be onchain and, specifically, on Ethereum. These companies, including BlackRock (NYSE: BLK), PayPal (NASDAQ: PYPL), and Coinbase Global (NASDAQ: COIN), all have one thing in common — they chose Ethereum as their blockchain of choice.

In March, BlackRock launched BUIDL, its tokenized money market fund hosted on Ethereum. Tokenization is seen as a massively bullish development for Ethereum, with BlackRock’s CEO describing tokenization as the “next generation for markets” and one that some analysts believe is a $10 trillion opportunity.

Coinbase, the largest cryptocurrency exchange in the U.S., also launched its own Layer-2 blockchain, Base, in August 2023, again building on Ethereum. In that time, Base has become one of the most popular blockchains and has brought in more than $50 million in revenue for Coinbase.

Last but not least, PayPal followed suit by developing its own stablecoin, which is also built on Ethereum. Stablecoins are expected to make up 10% of money in the global economy in the next decade, and Ethereum’s dominance in this space further solidifies its position as the go-to blockchain for companies looking to explore innovative financial applications.

Sticking to the long-term strategy

The convergence of these major businesses on Ethereum is something no other blockchain can claim. With the adoption by such influential entities, recent developments prove that Ethereum is the only blockchain that companies trust when making the dive into crypto.

Yet, as bullish as this is, it’s just one catalyst for Ethereum in the long term. Ethereum also dominates decentralized finance (DeFi), one of crypto’s most prominent use cases, where it supports more than 50% of all value in the decentralized economy. It also has a thriving developer community that consistently drives innovation through smart contracts and decentralized applications, further solidifying Ethereum’s position as the backbone of Web3.

It might test your fortitude (and it’s certainly testing mine) but treating this downturn as an opportunity to buy Ethereum at a discount relative to its future potential appears to be the play. While Ethereum may be down, it’s most definitely not out.