VCs: Finance is crypto’s proven product-market fit, non-financial use cases lag
Top venture capitalists debate whether finance is crypto’s first chapter or its final form. Chris Dixon (a16z Crypto) argues non-financial crypto use cases are prematurely declared dead and that blockchains introduced a coordination primitive where finance naturally came first after infrastructure matured. Haseeb Qureshi (Dragonfly) counters that consumer crypto failed due to weak demand and poor product design, not regulation, and contends finance remains the only proven product-market fit.
Key data points supporting finance-led adoption: venture funding topped $20 billion in 2025, the highest since 2022, with $8.5 billion invested in Q4 across 425 deals (up 84% QoQ). Capital concentrated in later-stage rounds, infrastructure and DeFi. DeFi total value locked recovered to about $99.07 billion and stablecoin supply exceeded $307 billion. Lending platforms retained deep liquidity; stablecoin settlement volumes reached trillions annually. Earnings concentrated in financial protocols—PancakeSwap generated ~$15.8M and Aave ~$10.4M in 30-day earnings—while gaming and social projects saw engagement spikes during airdrops but weak retention and low ARPU ($10–$30).
Conclusion: Capital flows, revenue density and payment throughput point to finance (DeFi and stablecoin rails) as crypto’s dominant value-accrual layer today. Utility sectors drive engagement but struggle to produce durable cash flow, supporting a cautious VC stance on non-financial expansion.
Bullish
The article highlights concentrated capital flows, rising venture funding ($20B+ in 2025), strong DeFi metrics (TVL ≈ $99B) and stablecoin supply/settlement growth—signals that institutional and payment demand are reinforcing finance-focused value accrual in crypto. Earnings data (PancakeSwap, Aave 30‑day revenues) show financial protocols producing durable fees, while non-financial sectors rely on token subsidies with low ARPU and poor retention. For traders this is broadly bullish for DeFi tokens, liquidity providers, and stablecoin-linked instruments because: 1) higher funding and TVL usually support protocol growth and token utility; 2) fee-generating protocols can sustain token value through revenue accrual and burns/staking; 3) stablecoin throughput supports on-chain trading volumes and reduces friction.
Short-term impact: likely outperformance of DeFi tokens and infrastructure names as capital and yield-seeking flows concentrate there; utility/gaming tokens could lag or remain volatile, especially post-airdrop. Expect elevated correlations within DeFi and between stablecoin pairs and major tokens.
Long-term impact: reinforces a structural narrative that finance is the primary product-market fit, attracting continued institutional product development. If this persists, it may lead to a reallocation of venture and trading capital toward financial primitives, improving liquidity and lower volatility in major DeFi markets. However, the view isn’t unequivocally optimistic—if macro risk or regulatory changes hit financial rails, concentrated positions could see amplified downside. Historical parallels: past cycles (post-2020 DeFi summer, 2021 stablecoin growth) show similar capital concentration preceded price appreciation in DeFi assets, followed by higher resilience of fee-generating protocols during downturns.