Distinguished crypto enterprise capitalists are clashing on-line about whether or not non-financial use circumstances in crypto, Web3, and blockchain have failed resulting from an absence of investor demand and product-market match or if the very best days for non-financial purposes nonetheless lay forward.
The controversy 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 circumstances in crypto haven’t taken off.
These use circumstances embrace decentralized social media, digital identification administration, decentralized media streaming platforms, digital rights platforms, Web3 video video games and extra.
“Non-financial use circumstances for crypto have failed as a result of nobody needs them,” Haseeb Quereshi, a managing accomplice at crypto enterprise agency Dragonfly, mentioned in a response on Sunday. He added:
“Let’s simply admit it. They have been unhealthy merchandise. They failed the market take a look at. It was not Gensler or Sam Bankman-Fried (SBF) or Terra that brought about these items 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 posh of ‘ready to be proper’ in VC,” Nic Carter, the founding accomplice of enterprise agency Fort Island Ventures, mentioned in a reply to Quereshi. “It’s worthwhile to be proper a few market through the 2-3 yr fund deployment interval,” he mentioned.
The controversy follows a surge of VC funding into crypto tasks in 2025, which principally flowed to tokenized real-world belongings (RWAs), bodily or conventional monetary belongings represented onchain by digital tokens.
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Totally different approaches to portfolio constructing
Dragonfly’s portfolio is constructed round monetary use circumstances and blockchain infrastructure that helps transfer worth and threat by 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 circumstances like Coinbase and decentralized crypto alternate 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 Buddies With Advantages, digital identification supplier World and Web3 gaming platform Yield Guild Video games.
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