Kyle Samani: Web3 Has Failed; Only DeFi and DePIN Remain Viable
Multicoin Capital founder Kyle Samani declared Web3 dead, arguing that only decentralized finance and decentralized physical infrastructure networks have achieved meaningful product-market fit. The commentary underscores ongoing debate within the industry about which blockchain use cases have proven sustainable.
Key Takeaways
- 1## Samani's Assessment Kyle Samani, founder of venture firm Multicoin Capital, stated that Web3 as a broader category has failed to deliver on its premise, with only two subsets showing durable traction: DeFi and DePIN (decentralized physical infrastructure networks).
- 2Samani did not elaborate on which specific projects or use cases fell short of viability, but his framing reflects a narrowing view of which blockchain applications have cleared the bar for real adoption.
- 3## Broader Industry Unease Samani's remarks align with other prominent voices expressing concern about the sector's direction.
- 4Eli Ben-Sasson, chief scientist at StarkWare, warned that crypto faces an identity crisis across the market, suggesting uncertainty about the industry's core value proposition beyond speculation and niche applications.
- 5The tension between infrastructure-layer promise and application-layer reality has persisted for years, but recent statements suggest frustration is mounting among builders and investors.
Samani's Assessment
Kyle Samani, founder of venture firm Multicoin Capital, stated that Web3 as a broader category has failed to deliver on its premise, with only two subsets showing durable traction: DeFi and DePIN (decentralized physical infrastructure networks). Samani did not elaborate on which specific projects or use cases fell short of viability, but his framing reflects a narrowing view of which blockchain applications have cleared the bar for real adoption.
Broader Industry Unease
Samani's remarks align with other prominent voices expressing concern about the sector's direction. Eli Ben-Sasson, chief scientist at StarkWare, warned that crypto faces an identity crisis across the market, suggesting uncertainty about the industry's core value proposition beyond speculation and niche applications. The tension between infrastructure-layer promise and application-layer reality has persisted for years, but recent statements suggest frustration is mounting among builders and investors.
What Constitutes Viability
DeFi's sustained trading volumes, lending activity, and user retention have made it the clearest case of blockchain utility outside of store-of-value narratives. DePIN projects—those enabling distributed provision of physical resources like bandwidth or storage—have attracted venture backing and user adoption, though the category remains early. Samani's framing implies that other Web3 categories—gaming, social networks, identity, content platforms—have not met equivalent thresholds for defensibility or scale.
Why It Matters
For Traders
Negative sentiment from prominent VCs and protocol leaders may weigh on alt-L1 and application-layer tokens that lack clear DeFi or DePIN use cases.
For Investors
A narrowing consensus that only DeFi and infrastructure remain viable signals potential reallocation of venture capital away from gaming and social experiments.
For Builders
Teams shipping consumer-facing or speculative Web3 applications face headwinds; capital and talent flow increasingly toward DeFi protocols and physical infrastructure primitives.
