Prominent crypto venture capitalists are publicly debating whether non-financial blockchain use cases have failed due to a lack of demand. The argument began after Chris Dixon of a16z crypto blamed regulatory attacks on their slow progress. Haseeb Quereshi of Dragonfly countered that the products simply failed the market test.
Leading crypto investors are clashing over why non-financial applications like decentralized social media and Web3 gaming have not gained traction. The online debate started when Chris Dixon published an article arguing that years of scams and regulatory attacks hindered these sectors.
“Non-financial use cases for crypto have failed because no one wants them,” Haseeb Quereshi said in a direct response. He stated the products were bad and failed their market test, unrelated to specific industry scandals.
Dixon noted that his firm manages funds with a ten-year horizon, suggesting building new industries takes significant time. Nic Carter of Castle Island Ventures replied that venture capital lacks that luxury, requiring correctness within a typical two-to-three year deployment period.
Data shows over $60.7 million in fees were recently paid to crypto exchanges and decentralized finance applications. The top ten crypto applications by fee generation are all financial use cases.
The debate follows a surge in 2025 venture capital investment, which mostly flowed to tokenized real-world assets. The firms’ portfolios reflect their differing theses, with Dragonfly focused on financial infrastructure.
a16z crypto‘s portfolio includes financial giants but also spans community, gaming, and media streaming projects. These investments include Friends With Benefits, World, and Yield Guild Games.
