Multicoin Capital Co-Founder Declares Web3 Dead, Only DeFi and DePIN Remain

Samani contends that the once-broad ambitions of Web3 – encompassing decentralised applications, social networks, and user-owned internet services – have largely failed to gain significant traction. Instead, he observes a market consolidation around tangible, utility-driven solutions. DeFi, which provides financial services without traditional intermediaries, and DePIN, which leverages blockchain to coordinate physical infrastructure like wireless networks, are cited as the key survivors.

This re-evaluation coincides with a notable decline in venture capital funding for general Web3 startups, a stark contrast to the peak years of 2021-2022. Conversely, investments specifically within DeFi and DePIN protocols have shown greater resilience and stability. Multicoin Capital itself has a strong investment history in both areas, backing projects such as Helium in DePIN and various DeFi platforms.

Why it matters for Australian investors

For Australian investors, Samani's analysis offers crucial insights into where future crypto growth might lie and where to exercise caution. The narrowing focus to DeFi and DePIN suggests a maturation of the global crypto market, shifting from speculative, broad narratives towards applications with clear revenue models and real-world utility. This pragmatism is especially relevant for Aussies navigating a dynamic and often volatile investment space.

In Australia, access to these evolving sectors is primarily through major exchanges like CoinSpot, Independent Reserve, Swyftx, and BTC Markets, where many DeFi tokens are listed. Investors evaluating DeFi projects should consider the underlying utility and audited smart contract security, crucial for safeguarding assets. For DePIN, while direct investment opportunities might be more niche, it points to a future where blockchain could underpin critical infrastructure, potentially creating new investment avenues.

The Australian regulatory landscape, particularly with ASIC and AUSTRAC overseeing digital asset transactions, means that any shift towards utility-driven projects could be viewed positively, fostering greater institutional interest. Utility and real-world use cases align more closely with traditional investment metrics, potentially appealing to a broader range of Australian investors who are accustomed to assessing fundamental value.

Impact on the AUD market

The Australian dollar (AUD) denominated crypto market typically mirrors global trends, albeit with its own unique flavour due to local regulatory frameworks and investor behaviour. A global shift towards DeFi and DePIN could influence capital flows into specific digital assets available on Australian platforms. Increased utility-driven investment could lead to more stable price action for these assets compared to the broader, often more speculative, Web3 category.

Should DeFi protocols continue to demonstrate robust financial activity and DePIN projects deploy meaningful physical infrastructure, this could attract more institutional capital globally, some of which may find its way into the Australian market. This could manifest as increased trading volumes for specific tokens on Australian exchanges, potentially impacting local AUD-pegged cryptocurrency values.

However, the dismissal of the broader Web3 vision also means Australian investors might need to temper expectations for sectors like decentralised gaming or social media, which have struggled with mainstream adoption and scalability. For tax purposes, the Australian Taxation Office (ATO) treats cryptocurrencies as property, so any gains (or losses) from these shifting investment focuses would still be subject to standard capital gains tax (CGT) rules, regardless of whether they fall under DeFi, DePIN, or what remains of Web3.

What to watch next

Moving forward, Australian investors should closely monitor the continued development and adoption rates of specific DeFi and DePIN projects. Look for further signs of capital and talent consolidating in these areas. The ability of DeFi protocols to maintain their financial volumes and innovate while ensuring security will be paramount. For DePIN, the actual deployment and operational success of physical infrastructure will be key indicators.

Keep an eye on how traditional finance (TradFi) continues to integrate with the crypto space. While Samani's comments suggest a maturing market, the increasing involvement of banks and asset managers, both globally and locally, could still reshape the industry's original decentralised ethos. This tension between centralisation and decentralisation will remain a critical theme.

Finally, observe the regulatory environment in Australia. As these sectors evolve, Australian regulators like ASIC and AUSTRAC will likely continue to clarify their positions, potentially influencing how investment products and services are offered to Australian consumers. Understanding these developments will be crucial for navigating investment opportunities responsibly in the changing crypto landscape.