Venture capital investors are clashing over whether non-financial crypto and Web3 use cases have failed due to weak demand or are simply waiting for clearer regulation to emerge.
Chris Dixon said non-financial applications such as decentralised social media, digital identity and Web3 gaming have been held back by “scams, extractive behavior and regulatory attacks.”
“Non-financial use cases for crypto have failed because no one wants them,”
Said Haseeb Qureshi, arguing the projects were “bad products” that failed genuine market tests.
Dixon countered that a16z crypto invests with a decade-long horizon, saying “building new industries takes time” and adoption should not be judged on short-term cycles.
Nic Carter pushed back, saying venture capitalists “don’t have the luxury of waiting to be right” and must identify viable markets during a fund’s early deployment period.
The debate follows heavy VC inflows into crypto in 2025, with most capital flowing into tokenised real-world assets rather than consumer-focused Web3 applications.
The divide reflects differing strategies, with Dragonfly concentrating on financial infrastructure while a16z continues to back a broader mix of crypto, gaming, identity and community-driven projects.