Distinguished crypto enterprise capitalists are clashing on-line about whether or not non-financial use instances in crypto, Web3, and blockchain have failed as a result of a scarcity of investor demand and product-market match or if the perfect days for non-financial purposes nonetheless lie forward.
The talk began on Friday when Chris Dixon, a managing accomplice at enterprise capital agency a16z crypto, printed an article arguing that years of “scams, extractive conduct and regulatory assaults” have been the explanation that non-financial use instances in crypto haven’t taken off.
These use instances embrace decentralized social media, digital id administration, decentralized media streaming platforms, digital rights platforms, Web3 video video games and extra.
“Non-financial use instances for crypto have failed as a result of nobody needs them,” Haseeb Qureshi, a managing accomplice at crypto enterprise agency Dragonfly, mentioned in a response on Sunday. He added:
“Let’s simply admit it. They have been dangerous merchandise. They failed the market take a look at. It was not Gensler or Sam Bankman-Fried (SBF) or Terra that precipitated this stuff to fail; it was that nobody needed any of it. Pretending in any other case is coping.”
Dixon mentioned that as a16z crypto’s funds are managed with not less than a 10-year time horizon, “constructing new industries takes time.”
“You do not have the luxurious of ‘ready to be proper’ in VC,” Nic Carter, the founding accomplice of enterprise agency Fortress Island Ventures, mentioned in a reply to Qureshi. “You’ll want to be proper a couple of market in the course of the 2-3 yr fund deployment interval,” he mentioned.
The talk follows a surge of VC funding into crypto tasks in 2025, which largely flowed to tokenized real-world property (RWAs), bodily or conventional monetary property represented onchain by digital tokens.
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Completely different approaches to portfolio constructing
Dragonfly’s portfolio is constructed round monetary use instances and blockchain infrastructure that helps transfer worth and threat by way of the onchain monetary system.
Among the agency’s investments embrace the Agora stablecoin and funds platform, funds infrastructure supplier Rain, artificial greenback issuer Ethena, and the Monad layer-1 blockchain community.
As for a16z, the agency’s crypto portfolio consists of many monetary use instances like Coinbase and decentralized crypto change Uniswap, but additionally incorporates a a lot wider vary of Web3 sectors like neighborhood constructing, gaming and media streaming.
These tasks embrace the neighborhood constructing membership Pals With Advantages, digital id supplier World and Web3 gaming platform Yield Guild Video games.
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