Author: Jason Rosenthal, a16z Operating Partner
Translation: Hu Tao, ChainCatcher Selection
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 of it. The more value that flows through the network, the larger the business typically becomes.
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, capital and value now flow at internet speed—settling globally, 24/7, with end-to-end programmability. Payment channels are unobstructed, unit economics are transparent, and every dollar flowing anywhere in the world is reachable.
The Model
Blockchains are network businesses by design. Every transaction settles on a shared ledger. Each new participant reinforces the same underlying network that the next builder can use. As more people use and build on it, the network becomes more valuable to all users.
Most companies spend years manufacturing network effects on top of traditional infrastructure. Crypto founders inherit them as a starting condition.
Network tokens amplify this. Well-designed tokens can align users, developers, suppliers, validators, and protocols around a single outcome—growing the network—and pay proportionally to each participant's 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 through the system and value accruing to the hands of those 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 from locomotives. They made money from every ton of grain, coal, and steel that crossed their tracks. Standard Oil, U.S. Steel, and AT&T were all companies in the flow of funds. Google and Meta displaced print and TV not because their ads were better, but because they sat at the chokepoint where attention converts to commerce, enabling them to take a cut of trillions in commercial intent. AWS is in the flow of computation.
The model is consistent: find where value flows, and position yourself in the middle of it.
Financial markets make this model even clearer. Visa processed $15.7 trillion in payment volume in FY2024, reporting $35.9 billion in net revenue. Jane Street posted $20.5 billion in net trading revenue last year—more than Citigroup or Bank of America. The top five U.S. market makers handled 87% of order flow payment: they don't predict the market; they sit in the flow of every order and earn more as trading volume grows.
These businesses share another commonality: network effects. Visa is more useful to more merchants because there are more cards; more useful to more cardholders because more merchants accept it. It's the same with order flow—each additional broker narrows spreads, attracting more brokers, which attracts more flow.
The 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 margin extraction. Payments, custody, lending, FX, securitization, settlement, market making—all of it. Visa and Mastercard charge 2-3% transaction fees on networks designed in the 1960s. Remittance corridors charge 6-9%. Prime brokers and custodians take a piece of every securities trade. Even after the U.S. shifted to T+1 settlement in 2024, money still sits idle overnight as a structural tax on every participant.
Each of these margins is a target. Compress cost, increase speed, and potentially expand the entire market. Stripe and Square proved this is 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 category is an area where global value can begin to flow at volumes the existing rails were never designed to handle.
Each is an open field for building flow-of-funds businesses from the ground up on programmable infrastructure. 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 margin extraction highest relative to the value being created?
The opportunity is there. Seize it, ride the new flow, and let the network compound from there.
