Author: Jason Rosenthal, a16z Operating Partner
Compiled by: Hu Tao, ChainCatcher Highlights
Many of history's greatest businesses were built by positioning themselves in the "flow of funds" – facilitating the creation and transfer of value within a network and taking a cut. The more value that flows through the network, the larger the business typically grows.
Cryptocurrency is the first modern technology natively built for this purpose. If your startup hasn't yet architected its product and business to benefit from these principles, you're missing an opportunity. Thanks to stablecoins, funds and value now flow at internet speed – 24/7, with global settlement, and end-to-end programmability. Payment rails are frictionless, unit economics are transparent, and every dollar flowing globally is addressable.
The Specific Model
Blockchains are network businesses by design. Every transaction settles on a shared ledger. Every new participant strengthens the same underlying network that the next builder can use. As more people use and build on it, the network becomes more valuable for all users.
Most companies spend years manufacturing network effects on top of traditional infrastructure. Crypto founders inherit them as starting conditions.
Network tokens amplify this. A well-designed token aligns users, developers, suppliers, validators, and the protocol around a single outcome—growing the network—and pays each proportionally to their contribution. But the protocol's revenue belongs to the people who use it. No partner rebates, no side deals. Just a feedback loop between value flowing in the system and value accumulating in the hands of the people building and growing it.
This isn't a new model. Cryptocurrency just makes it accessible and scalable for startups for the first time.
Railroads didn't make money on locomotives. They made money on every ton of grain, coal, and steel that crossed their tracks. Standard Oil, U.S. Steel, and AT&T were companies in the flow of funds. Google and Meta replaced print and TV not because their ads were better, but because they sat at the choke point where attention turned into commerce, enabling them to take a cut of trillions in commercial intent. AWS is in the flow of compute.
The pattern is consistent: find where value moves and put yourself in the middle.
Financial markets make this model even clearer. Visa processed $15.7 trillion in payment volume in FY 2024 and reported $35.9 billion in net income. Jane Street posted $20.5 billion in net trading income last year – more than Citigroup or Bank of America. The top five US market makers handled 87% of order flow payment: they don't predict markets; they sit in the flow of every order and earn more as volume grows.
These businesses share another trait: network effects. Visa is more useful to more merchants because there are more cards; more useful to more cardholders because more merchants accept it. Same with order flow – each additional broker tightens spreads, attracting more brokers, which attracts more flow.
Flow of funds plus network effects is one of the most durable business structures ever.
Your Margin Is My Opportunity
Bezos called it “your margin is my opportunity.” He was talking about retail, but it applies even more to traditional financial services – the world's largest pool of profit extraction. Payments, custody, lending, FX, securitization, settlement, market making, without exception. Visa and Mastercard charge 2–3% transaction fees on networks designed in the 1960s. Remittance corridors take 6–9%. Prime brokers and custodians take a piece of every securities trade. Even after the US moved to T+1 settlement in 2024, funds still sit idle overnight as a structural tax on everyone involved.
Each of these margins is a target. Compress the cost, increase the speed, and potentially expand the whole market. Stripe and Square proved this was possible in payments.
Crypto founders have the opportunity to build the next version – programmable, instant, global, and natively in the flow of funds.
And the frontier extends far beyond financial services. Compute and GPU markets. Memory chips. AI training data. Energy. Robotics. Space. Rare earth metals. Each is a category where global value can begin to move at volumes the existing rails were never designed to carry.
Each is greenfield for building a flow-of-funds business on programmable infrastructure from the ground up. These markets have no existing rails, no entrenched intermediaries, and nothing to defend.
As a founder, ask yourself:
1. Are you in the flow of funds today?
2. When the value of activity on your product grows 10x, does your revenue grow with it?
3. If you're building a new product, where in your target market is the profit extraction highest relative to the value being created?
The opportunity is there. Take it, get into the new flow, and let the network compound from there.
