A public dispute has flared up within the venture capital community regarding the collapse of the non-financial crypto sector. Chris Dixon, Managing Partner at a16z crypto, tried to defend the industry, claiming that regulators, scammers, and a toxic environment are hindering the growth of Web3 gaming and decentralized media.
He believes these use cases will take off as soon as the rules become transparent. The fund is willing to wait years for this outcome.
Dixon’s position faced sharp criticism from his opponents. Haseeb Qureshi, Managing Partner at Dragonfly, is certain that blaming external factors is merely wishful thinking.
“Non-financial use cases failed because nobody needs them. Let’s be real: these were bad products that failed the market test. Neither Gensler, nor Sam Bankman-Fried, nor the Terra collapse had anything to do with it,” Qureshi snapped.
Nic Carter, founder of Castle Island Ventures, also weighed in. He reminded his a16z colleagues that investors do not have the luxury of waiting ten years to be right. You have to identify the trend during the capital deployment window, which lasts only 2–3 years.
The stats favor the skeptics. The top 10 apps by revenue are exclusively financial services. In just the last 24 hours, exchanges and DeFi protocols raked in over $60.7 M in fees.
This divide is clearly visible in fund strategies. While a16z continues to believe in “long narratives” like community building and digital identity, Dragonfly and other pragmatists are packing their portfolios with financial infrastructure and stablecoins. In 2025, smart money is voting for real-world asset (RWA) tokenization, leaving social experiments behind.
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