Author:a16z crypto
Compiled by: Deep Tide TechFlow
1. Transactions Can Be a Transit Point, Not the End Goal of Crypto Business
Today, aside from stablecoins and some core infrastructure, almost all well-performing crypto companies are transitioning or have already transitioned into trading platforms. But if "every crypto company becomes a trading platform," where does that leave everyone else? When so many players are doing the same thing, market attention becomes fragmented, ultimately leaving only a few big winners. This also means that companies that pivot to trading too early may miss the opportunity to build more competitive and enduring businesses.
I fully understand the efforts of all entrepreneurs to get their finances in order, but pursuing short-term product-market fit also comes at a cost. This is particularly true in the crypto industry, where the unique dynamics of tokens and speculation can lead founders down the path of instant gratification while searching for product-market fit... one might call it a "marshmallow test" (an experiment testing patience and self-control).
There's nothing wrong with trading itself—it's an important function in market operations—but it doesn't have to be the end goal. Founders who focus on the "product" aspect rather than merely chasing product-market fit may ultimately become bigger winners.
—Arianna Simpson (@AriannaSimpson), Partner at a16z Crypto Fund
2. This Year, Regulation Will Help Eliminate Industry Distortions
Over the past decade, one of the biggest obstacles to building blockchain networks in the United States has been legal uncertainty. Securities laws were stretched and selectively enforced, forcing founders into a regulatory framework designed for companies, not networks. For years, reducing legal risk replaced product strategy; the role of engineers was taken over by lawyers.
This dynamic led to many anomalies: founders were advised to avoid transparency; token distributions became legally arbitrary; governance became superficial; organizational structures were optimized for legal cover; and tokens were designed to avoid economic value or lacked a business model. Worse, crypto projects that circumvented the rules often developed faster than conscientious builders who followed them.
However, this year, the government is closer than ever to passing crypto market structure regulation, which could eliminate all these distortions. If legislation passes, it will incentivize transparency, establish clear standards, and replace "enforcement roulette" (random enforcement) with a clearer, structured path for fundraising, token issuance, and decentralization. After GENIUS (note: likely referring to a policy or event), the explosive growth of stablecoins has already become evident; and legislation on crypto market structure will bring even greater change, but this time for networks.
In other words, such regulation will enable blockchain networks to truly operate as networks—open, autonomous, composable, credibly neutral, and decentralized.
—Miles Jennings (@milesjennings), Head of a16z Crypto Policy Team and General Counsel
