No Asterisk Needed
Election night struck the regulatory asterisk from web3. But it did more than that.
It triggered a broader shift of application investing versus infrastructure.
The last few years of crypto & Web3 investing have focused predominantly on infrastructure, the databases (called Layer 1s/L1s & Layer 2s/L2s), security, analytics, & decentralized finance or DeFi (typically lending products). But these categories are slowing.
In 2025, gaming, real-world assets (RWA), payments, & applications have all captured 10% more venture dollars compared to pre-election.1
The magnitude of these changes is not huge, a +/- 10% statistically significant change across about $1.6b in disclosed investments since Election Day but the data portends a broader shift in Web3 investment activity.
First, stablecoins are rapidly becoming a new & valuable payment pathway for large corporates with Stripe, Visa, PayPal & many others supporting these rails. New banks, new payment processors, & merchant acquirers have emerged to meet the market opportunity, building payment transfer applications & accounting businesses on top of these new corridors.
Second, the infrastructure advances of the last few years have improved the price/performance of Web3 blockchains, enabled & improved user onboarding for games, both through better wallets & also developer prepayment of fees on behalf of users.
Third, some Web2 financial instruments are moving to Web3 & bringing with them superior benefits. Daily dividends, instant settlement, 24 hours a day, & also programmable collateral to drive more yield than is available elsewhere.
This evolution is a wonderful thing.
For many quarters the dominant theme at crypto events has been “wen application?” When will the first killer applications on Web3 be built? If venture capital behavior is a credible predictor of the future, they are already here.
They may not all be trumpeting the fact that a Web3 database is powering them under the hood. But that’s the point. The underlying technology is an enabler to a superior end user experience. No asterisk needed.
1 This change is statistically significant. The Chi-squared test resulted in a p-value of 0.0356 & a Chi-squared value of 27.6.