The Yellow Network is addressing a major barrier to institutional onchain trading by eliminating counterparty exposure to trading venues.
Alexis Sirkia, chair and co-founder of Yellow Network – a Layer-3 mesh protocol using state channels for noncustodial clearing and liquidity unification – discussed the issue in an interview with Sandmark at Consensus Miami. Sirkia previously co-founded GSR, an early cryptocurrency market-making firm.
"The biggest inefficiency is still exposure," Sirkia said. "For institutions, they still need exposure, even if you're trading on a new DEX like Hyperliquid (HYPE)."
Escrow mechanism reduces venue risk
Yellow enables users to designate regulated custodians while avoiding direct asset custody by counterparties or venues. Parties deposit funds into escrow, with third-party intervention limited to disputes.
"You and the exchange both choose a regulated custodian that is holding the assets for both of you, and then you're trading without the risk of the exchange," Sirkia said.
The platform launched in March. Sirkia claimed it has achieved 5x growth in activity during a bearish market, though specific onchain volume figures or dashboards were not provided in the interview.
Agentic commerce faces adoption hurdles
Sirkia positioned Yellow as infrastructure for enterprise AI agents transacting autonomously. "They're all talking about it, but no real institutions have done anything," he said. "We're building the rails and the protocol and the standard for this upcoming trend."
He highlighted the scaling challenge with potentially billions of agent wallets. "You cannot have a third party; it's just not going to work," Sirkia said, describing it as a "one-to-n problem."
Some analysts express caution regarding timelines. Haseeb Qureshi of Dragonfly Capital predicted in late 2025 that "AI agents will still not be 'paying each other' or spending any meaningful money in 2026," with most use cases remaining prototypes.
Regulatory clarity supports expansion
Sirkia welcomed US regulatory progress for noncustodial DeFi. Yellow Pro selected the Marshall Islands initially for DAO clarity and is preparing Yellow.US. He cited conversations he was party to at Consensus indicating the CLARITY Act is likely to pass.
Yellow complements Layer-1 and Layer-2 networks such as Ethereum and Bitcoin (BTC) by handling private peer-to-peer logic. "We solve what happens 90% of the time, which is the trustless intersection between two parties," Sirkia said.
Security risks in AI delegation
Sirkia flagged risks from delegating financial decisions to agents. Recent AI-powered auditing tools have improved smart contract security, he noted, but volatility could test escrow models during extreme market stress.
For investors, Yellow's $YELLOW token trades near $0.05 with a market capitalization around $10mn as of 24 May. The project reports over 500 community builders.
The approach aims to support autonomous business models with high efficiency, similar to Uniswap, while bridging TradFi workflows and onchain systems.
