Outstanding 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 perfect days for non-financial functions nonetheless lay forward.
The controversy began on Friday when Chris Dixon, a managing companion 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 embody 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 companion 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 induced these items to fail; it was that nobody wished 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 companion of enterprise agency Fort Island Ventures, mentioned in a reply to Quereshi. “You could be proper a couple of market through the 2-3 12 months fund deployment interval,” he mentioned.
The controversy follows a surge of VC funding into crypto initiatives in 2025, which principally 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 circumstances and blockchain infrastructure that helps transfer worth and threat via the onchain monetary system.
A few of the agency’s investments embody 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 contains many monetary use circumstances like Coinbase and decentralized crypto change Uniswap, but in addition incorporates a a lot wider vary of Web3 sectors like group constructing, gaming and media streaming.
These initiatives embody the group constructing membership Pals With Advantages, digital identification supplier World and Web3 gaming platform Yield Guild Video games.
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