Why we still believe in Web 3.0

Lessons from a16z, Token 2049 in Singapore and our common sense

Evolution, not revolution

We’ve all seen the meteoric rise and subsequent fall of Web 3.0 projects. From the Opensea hype to the proliferation of meme coins (like the recent HAWK-TUAH-girl one ), the space has been through its own "dot-com bubble" moment. But, as history shows us, this isn't the end - it's a recalibration. Much like the aftermath of the dot-com crash, the current Web 3.0 landscape is gradually shedding its speculative excesses and emerging stronger and more focused.

The narrative that crypto would immediately replace traditional banking didn’t play out. Instead, major institutions like JPMorgan and Goldman Sachs are investing in blockchain infrastructure and stablecoins. This is evolution, not revolution—a shift that is global, not just U.S.-centric. In the CEE region, for example, Erste Group’s CVC Seed Starter invested in Blockmate, a blockchain infrastructure startup (disclaimer: part of our portfolio). These shifts show how industries worldwide are integrating blockchain into their foundations.

At Tensor Ventures, we’ve been active in the crypto space since 2017. We've seen the hype cycles come and go, and through it all, we’ve remained focused on the fundamentals. This isn’t about chasing trends; it’s about building long-term value in a maturing industry.

How about now

Attending Token 2049 (in 2024), the world’s largest crypto conference, in Singapore, I was struck by a noticeable shift. The mood was pragmatic, user-focused, and less about the "get-rich-quick & easy" mentality that dominated past years. While crypto conferences still have their eccentricities (yes, I got invited to a yacht party 😎), the industry is maturing.

Several key observations stood out:

1. Users are there and there will be more 

According to the a16z State of Crypto 2024 Report, crypto usage is at an all-time high. Stablecoins like USDC and USDT, found their product-market fit and now handle trillions in transactions each year, particularly in regions like Southeast Asia and Latin America, where they’re widely used for remittances and everyday payments. Blockchain-based games, such as Axie Infinity and platforms like Immutable X, are also attracting millions of users, proving that crypto is now playing a real-world league.

2. The ecosystem is splitting

The crypto space is divided into two biggest camps: Ethereum and Solana. Ethereum stays true to its roots in decentralization, with tools like Arbitrum and Optimism improving its scalability. On the other hand, Solana focuses on speed, low costs and user friendliness, making it popular for practical projects with real-world impact, like Helium and Render Network. These different approaches highlight the growing variety of ideas shaping the industry.

3. A focus on real use cases 

Speculative tokens are becoming less important as the focus shifts to practical applications. DeFi platforms like Uniswap and Aave are providing accessible financial tools, while companies like Fireblocks and Chainalysis are helping traditional finance integrate with crypto. Even in gaming, NFTs are being used to create better experiences and new ways for users to earn. The industry is moving toward solving real-world problems and delivering tangible value.

At Tensor Ventures, we’ve taken a similar approach. Our investments — such as Signals Network, Tatum, and Blockmate — highlight our focus on infrastructure, developer tools, and real-world use cases within the crypto industry. We avoid projects that launch tokens prematurely, favouring companies building sustainable business models.

How about tomorrow

Looking ahead, we still see immense potential in Web 3.0 to beat its current challenges and drive meaningful change (and revenue). Key narratives will be Open social media like BlueSky, DePIN (Decentralized Physical Infrastructure Networks) and DeSci (Decentralized Science). 

The evolution of the space will likely mirror the broader tech industry: fewer speculative plays and more focus on solving real issues. As the ecosystem matures, we witness Web 3.0 integrating into our lives, not as a replacement for existing systems, but as an enhancement.

Web 3.0 is a reflection of where the internet, finance, and society are heading. While the road may be bumpy, the destination remains compelling. At Tensor Ventures, we believe in backing the technologies and entrepreneurs shaping the (sometimes bumpy) future — and Web 3.0 is no exception.