Managing Partner at Dragonfly Challenges Web3’s Non-Financial Case

• Haseeb says regulation and scams did not kill consumer web3 users simply did not want crypto games or media.

• Financial crypto scaled bottom up through real demand across Bitcoin stablecoins DeFi NFTs prediction markets and RWAs.

• a16z says crypto is in a financial phase with ownership infrastructure first and clearer token rules before consumer apps.

Haseeb, Managing Partner at Dragonfly, rejected claims about consumer web3 failure. The exchange involved Chris from a16z crypto and focused on gaming, media, regulation and adoption. The discussion examined why financial crypto scaled while non-financial applications struggled, according to both participants.

Haseeb Disputes Regulation as the Core Explanation

According to Haseeb, arguments blaming regulation and scams for failed web3 gaming and media do not hold. He questioned whether figures like Gary Gensler caused those products to fail. Notably, he pointed out that financial crypto faced heavier scrutiny and more scams.

However, financial use cases still scaled, he said. Haseeb argued this contrast undermines the regulation-first explanation. He stated that consumer web3 products failed because users did not want them. He added that large amounts of capital and talent tested these ideas.

Haseeb listed crypto use cases that achieved adoption, all financial in nature. These included Bitcoin, stablecoins, Ethereum, ICOs, DeFi, NFTs, prediction markets, and RWAs. He noted that adoption happened bottom-up, based on observed user demand.

Financial Adoption Versus Consumer Experiments

Haseeb said investors discovered demand through usage, not pitch decks. In contrast, he described consumer web3 as driven by investor narratives and zero-rate conditions. He contrasted this with early Ethereum use cases outlined by Vitalik Buterin in 2014.

Those examples, he said, focused on finance, including issuance, derivatives, DAOs, savings, insurance, and prediction markets. Haseeb emphasized that finance represents a significant share of global economic activity. He also cited dissatisfaction with banking infrastructure as a driver.

Chris Frames Crypto as a Long-Term Build

Chris responded by stating that crypto currently is in a financial phase. He said blockchains introduced ownership-based coordination at internet scale. Finance, he added, served as the foundation, not the endpoint.

According to Chris, infrastructure must precede consumer categories. He compared crypto’s path to the early internet’s development. He also cited trust erosion from scams and regulatory pressure as limiting token-based communities.

Chris said a16z crypto has pushed for clearer token regulation for over five years. He referenced the GENIUS framework as validating that approach. He added that market structure legislation could follow a similar path.