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We examine a supply chain with a single risk-averse manufacturer who purchases from suppliers and sells to consumers. Within this context, we focus on two channels that drive blockchain adoption by the manufacturer: manufacturer risk aversion and consumer information asymmetry. Regarding the first channel, blockchain enables efficient tracing of defective products so that the manufacturer can selectively recall defective products rather than conducting a full recall. This tracing ability reduces the risk involved in the manufacturer purchasing from multiple suppliers and thereby leads the manufacturer to endogenously diversify across suppliers when blockchain is adopted. The diversification enhances the manufacturer’s welfare due to the manufacturer’s risk aversion and thus drives the manufacturer to adopt blockchain. With regard to the second channel, blockchain stores details from the manufacturing process …