There are no hundredfold coin myths, only long-termism—Why is European Web3 worth a fresh look from everyone?

Original Title: The Decentralized Continent: The Real Face of Europe’s Web3

Original Author: Ada, Deep Tide TechFlow

Source:

Reposted by: Daisy, Mars Finance

A Feng, who has been an entrepreneur in Europe’s Web3 industry for five years, recently returned to Beijing. Over the years, he has traveled between Germany and France, organized many industry meetups, and met a group of Web3 professionals also starting businesses in Europe.

When talking about the European Web3 market, A Feng’s judgment is straightforward: this is a land for idealists. Pure ideals have not given Europe an absolute advantage in the global crypto landscape, but they have not shaken their faith in Web3 idealism either.

From Switzerland’s Crypto Valley in Zug, to Paris’s Station F incubator; from Berlin Blockchain Week to Amsterdam’s DeFi innovation community, this ancient continent has always been writing its own unique crypto narrative, distinct from the US and Asia.

When we shift our focus from the crypto frenzy in the US, Japan, Korea, and the Middle East to this relatively quiet world, a question arises: What kind of unique presence does Europe really have in the global crypto landscape?

A Decentralized Continent

If one were to describe Europe’s crypto industry in a phrase, A Feng doesn’t hesitate to say: “decentralized.”

This decentralization, on one hand, means not idolizing a single central figure.

In the US, many people enter the space brought by star entrepreneurs or opinion leaders. In Europe, more people enter Web3 out of a personal belief in privacy, open protocols, and free markets. Their motivations are relatively pure—many founders’ primary aim isn’t even to make money, but because “they feel this is worth doing.”

On the other hand, Europe has no absolute geographic center. Each country and city has its own character, piecing together a fragmented yet layered Web3 map.

First is Germany.

Germany is a country without a super metropolis, and its industries are widely distributed. Many world-class companies are hidden in small towns; its largest city, Berlin, has a population of just over three million, equivalent to an average prefecture-level city in China.

The long winters and introverted social atmosphere make it more of an engineer’s paradise. Germans prefer to stay indoors and focus on technology, with strong R&D capabilities. If you attend a conference in Berlin, you’ll easily notice: tech personnel always outnumber business people.

“Very few Germans choose to do business; most are in research or development,” says Mike, who works on a wallet project in Germany.

France, in contrast, has a completely different style.

In France, a large segment of people in the crypto industry come from traditional FMCG, fashion, luxury, and other sectors. During the NFT boom, many elite marketers, brand managers, and business professionals from giants like L’Oreal and LV were drawn in. With strong social and market expansion skills, they naturally gravitate toward business roles in Web3—negotiating partnerships, promoting projects, building communities, and running the market.

The third country is Switzerland, whose keyword is “neutrality.”

Switzerland has a clear, friendly compliance framework and relatively relaxed crypto tax policies, making it ideal for non-profit organizations or research institutions. Web3 foundations like the Ethereum Foundation and Solana Foundation chose to cluster in Switzerland for its stable, predictable regulatory environment.

Finally, there’s Lisbon, Portugal.

Lisbon’s fame in the Web3 space is largely due to its people.

Portugal offers digital nomad and golden visas, and with its pleasant climate and low cost of living, it has attracted many Americans who have already made money in Web3.

Many of them no longer have projects that require daily management but have made enough money, so they settle in Lisbon, enjoy a laid-back retirement, and participate in some investing, meetups, and community activities.

Germany’s technical temperament, France’s business talents, Switzerland’s compliance advantages, and Lisbon’s digital nomads together form the fragmented puzzle of Europe’s Web3 industry.

Old Money Crypto Style

When talking about Web3, most people first think of the US, Hong Kong, or Singapore, but in A Feng’s view, Europeans are just as sensitive to and in need of decentralization and privacy—if not more so—than people in those regions.

Among the top ten projects by TVL, half are from Europe. This is partly due to engineer culture and partly because Europeans are willing to support new things and new tracks, even if the returns aren’t immediately apparent.

“In the past, to judge if a project was good, you’d see if it could get listed on Binance. But now, there’s a shift to evaluating whether a project has positive cash flow and actual users. In Europe, once a project finds its target audience, competition isn’t as fierce as in the US or Asia. Europeans see it as a solid business and don’t just ‘pump and dump,’” A Feng says. “Also, even though Europeans might not have the best math foundation, they’re very willing to spend time researching, so lots of small, refined teams arise—and they make decent money too.”

In terms of overall penetration, Web3 is still niche in Europe. The industry’s market share is about 6%, meaning only 6 out of every 100 people use crypto, which is significantly lower than in the US or Asia, with user ages mainly between 25 and 40.

Unlike Korea and some Asian markets with high-frequency, high-leverage trading habits, most Europeans don’t bet their entire fortune on crypto. For them, crypto is more of an asset allocation option than a high-stakes gamble.

This is tied to Europe’s historical experience and wealth structure. Many Europeans have lived through various speculative eras and aren’t as hungry for overnight riches.

Among the wealthy, more wealth comes from family accumulation, so they are more likely to accept the idea of “saving a bitcoin for their descendants” rather than banking on a 100x or 1,000x coin for class mobility.

There’s also an objective constraint: most compliant exchanges in Europe don’t offer high leverage, and derivatives or margin trading services are very limited. This regulatory design reduces the likelihood of all-in betting.

Of course, this doesn’t mean Europeans have no trading desire. In fact, during market cycles, interesting behaviors emerge: when the market is bad, people work local jobs in Europe; when it improves, they move to lower-cost countries to trade crypto full-time.

“Last year I met an Italian in Switzerland who works in a Swiss restaurant for four months each year, then spends the remaining eight months in Thailand and the Philippines—four months in each—trading crypto full-time,” says A Feng.

Stablecoin Boom

As elsewhere in the world, stablecoins are widely seen as one of the most promising directions in Europe, with almost all European banks researching related solutions. But the logic behind the boom differs from that in Asia and emerging markets.

The primary reason is payment infrastructure.

The EU still doesn’t have a truly unified, independent payment settlement system and relies heavily on US networks like Visa and Mastercard. For many Europeans, this means their economic lifeblood is long connected to foreign networks. Thus, both policymakers and banks hope to explore a European-owned settlement system, and stablecoins and their on-chain settlement networks naturally become frequently discussed options.

The second driver comes from geopolitics and industrial migration.

After the Russia-Ukraine war, energy prices and overall manufacturing costs soared, putting significant pressure on traditional European manufacturing, prompting many factories to relocate to the Asia-Pacific. As production globalizes, cross-border trade settlement becomes more frequent and complex, raising the need for efficient settlement across currencies and regulatory systems.

Compared to traditional cross-border transfers, stablecoin-based on-chain settlement offers clear advantages in speed and cost.

The third change comes from long-term shifts in consumer behavior.

After the pandemic, many Europeans got used to shopping online, with sellers on e-commerce platforms often based worldwide. To make such a cross-border, cross-time-zone, cross-currency system work smoothly, lighter, lower-fee, and faster payment methods are preferred, giving stablecoins a further layer of practical legitimacy.

However, real-world implementation isn’t easy.

Europe’s banking system is extremely traditional, with many banks having histories of over a hundred years. Whether in governance or risk appetite, they aren’t good at quickly adopting new technologies. Before Trump took office, the entire European financial system held a relatively hostile or indifferent attitude toward crypto.

The real change began when they realized US capital and large institutions had already poured substantial resources into crypto.

The problem is, many traditional finance professionals have no firsthand crypto experience and know almost nothing about wallets, on-chain interactions, or DeFi protocols. So when they start learning, they have to consult with advisory firms—many of which are themselves very traditional.

“Although I see a huge market, I feel these traditional Europeans may need quite some time to figure things out—unless there’s some external force pushing them,” says Vanessa, a Web3 professional who has lived in Europe for years.

According to Vanessa, previously hot trends in Europe like the metaverse and NFTs have faded away. Europeans also used to love BTCFi and would spend a lot of time and money supporting BTCFi projects, but later realized these projects didn’t generate good cash flow. Locking up bitcoin for a few percentage points of APY often led to problems—it was safer to just hold bitcoin. So, most BTCFi projects lost their appeal.

Asked where the real opportunity for European Web3 lies, A Feng offers a simple answer: “Europe has two big advantages: a population of nearly 600 million, and most people live in developed countries.”

In developing countries, people may earn only a few hundred dollars a month, while European users’ incomes are five to eight times higher. For projects, the higher the target customers’ net worth, the more likely they are to pay for products and services, and the greater the potential returns.

How to Tax?

On April 20, 2023, the European Parliament passed the EU’s Markets in Crypto-Assets Regulation (MiCA) by a vote of 517 in favor. This is one of the most comprehensive digital asset regulatory frameworks to date, covering 27 EU member states and the European Economic Area (EEA) countries Norway, Iceland, and Liechtenstein.

Article 98 of MiCA, combined with the EU’s eighth Directive on Administrative Cooperation in Tax Matters (DAC8), and the unique features of each country, together form a relatively complex but increasingly clear tax system. One universal principle: crypto transactions themselves are exempt from value-added tax (VAT).

Under this unified principle, each country still retains its tax characteristics. Germany and France are both representative in crypto compliance and are the most discussed cases in the industry.

Germany was the first country in the world to officially recognize bitcoin and other crypto transactions as legal, with the number of bitcoin and Ethereum nodes second only to the US.

In Germany, crypto is considered “private property,” and taxes mainly involve income tax, VAT, and specific activity taxes.

If you hold crypto for over a year before selling, the profits are exempt from income tax; if sold within a year, you may pay up to 45% income tax.

When using crypto to pay for goods or services, if the coin has appreciated since acquisition, the gain is counted as income and taxed; but if held over a year, this gain is also tax-exempt.

For staking, lending, airdrops, etc., German tax authorities require declaration and income tax payment; mining is classified as a commercial activity and subject to business tax.

In France, crypto is regarded as movable property, with relatively high tax burdens and no exemption for long-term holding.

France’s VAT rules are the same as Germany’s, but trading profits are subject to a 30% capital gains tax. If crypto trading is considered professional activity, commercial profit tax applies, possibly at higher rates. However, tax obligations are triggered only when crypto is sold for fiat; profits under 305 euros are tax-exempt.

Crypto mining companies in France must pay BNC (non-commercial profit) tax at a rate of 45%. Non-commercial miners with annual income under 70,000 euros may qualify for BNC tax breaks, but those classified as commercial businesses or individuals do not.

Beyond tax, other relevant policies are gradually being implemented. As Vanessa says, this is the best of times: with more compliance, more people will consider long-term business with stable income, not just token-launch projects.

To many, Europe’s Web3 world seems less lively—no constant 100x coin stories, and fewer dramatic price swings.

But from another perspective, on this land where idealism and institutionalism intertwine, a different kind of crypto business and participant is emerging. They care more about real product usage, project longevity, and finding a sustainable business model within strict compliance.

Perhaps we have reason to believe that on this hotbed of idealism, more unique crypto species will be born in the future.