The watershed moment of Web3: either become the gateway or develop the capability layer

For a long time, Web3 has felt like an experiment outside the mainstream world. It carries many grand narratives: decentralized finance, open networks, on-chain identities, and digital property rights. Supporters believe it will reshape the internet and the financial system, while skeptics argue it has always remained at the stage of speculation and concepts.

And in recent years, a seemingly positive change has been taking place: the mainstream world is starting to embrace Web3—especially stablecoins. From the United States pushing for stablecoin legislation, to multiple countries gradually establishing regulatory frameworks, to traditional payment institutions actively laying out their plans—stablecoins are rapidly moving into the mainstream financial system. Traditional giants such as Visa and Mastercard are also rolling out stablecoin payments and clearing.

At first glance, this looks like a Web3 victory. But on closer inspection, you’ll find that what the mainstream is accepting is not the Web3 ecosystem itself, but only stablecoins as a tool. When Visa promotes stablecoin payments, users are still swiping bank cards; merchants are still paying Visa transaction fees; and the entry point and profit allocation of the payment network remain in the hands of traditional institutions. Stablecoins are simply placed in the background, becoming a more efficient settlement tool.

In other words, the traditional world isn’t embracing Web3—it’s dismantling it, absorbing its valuable capabilities into the existing system. For Web3, this is not entirely good news. Because it means that many capabilities once considered native to the Web3 ecosystem may ultimately just become part of the traditional business system, while the value capturers may not necessarily be Web3 itself.

The boundary between Web2 and Web3 is becoming less important

This change also makes a long-emphasized distinction gradually lose meaning: the boundary between Web2 and Web3.

Stablecoins are being accepted not because traditional finance suddenly recognizes decentralization, but because they are more efficient than traditional systems for cross-border settlement. This means Web3 is starting to shift from an independent narrative to a capability provider. It is no longer viewed as a completely new world, but more like a set of technical modules that can be dismantled by the traditional system, purchased, and integrated.

Looking back at StepN’s success, it wasn’t because users care about on-chain assets, but because of the value proposition of “earning while walking.” Polymarket’s breakout wasn’t because the public understands oracles, but because it provides a more effective event pricing mechanism.

The real reason these projects succeed is the same: they break through the Web3 circle, making users almost forget the underlying technology when using them. This shows that users do not care whether a product belongs to Web2 or Web3—they only care whether it has value. Real competition has never been about technical labels; it has always been about value delivery.

The market no longer rewards “technological narratives”

This shift is especially evident in capital markets. In past rounds of cycles, the most core logic of Web3 was that technological innovation would be rewarded. New public chain architectures, higher TPS, lower latency, different scaling solutions—almost every technical highlight could win generous returns from capital markets. The market was willing to pay a premium for the future and for technological ideals.

But today, this logic is changing. Investors are starting to analyze Web3 projects the way they analyze traditional internet companies: revenue, profit, cash flow, and user growth—not just the technical route. In the recent adjustment of the secondary market, HYPE’s price performance is a typical example. Its relative stability during market pullbacks is not because it has a stronger narrative, but because Hyperliquid behind it has real and robust profitability.

This indicates that the market has begun using Web2 valuation models to price Web3. When narrative is no longer a moat, Web3 enterprises must answer a new question: in the new industrial cycle, what exactly do they rely on to capture value?

When everyone is embracing AI, Web3 is no exception

If in the past few years Web3 could still attract attention by relying on its own narrative, then today the new industrial cycle is very clear: AI is becoming the most important technological mainline globally. Whether they are traditional internet companies or emerging startups, they are all actively embracing AI. Web3 is no exception.

We have already seen more and more projects begin to actively combine with AI: AI Agent, on-chain reasoning, decentralized computing power, Agent payments, AI trading systems… almost every track is looking for points of connection with AI.

At face value, this looks like a pursuit of hot trends. But at a deeper level, it reflects a reality: when the market begins to care only about results, and AI becomes the new center of productivity, both Web2 and Web3 enterprises must find their own place again in this new industrial cycle.

And understanding how value is distributed in an industrial cycle has long been answered very clearly by history.

In every information revolution, wealth flows along a three-layer structure

Historically, whenever a new unit of information is defined, it leads to a redistribution of wealth. In the telegram era, it was charged “per word”; in the telephone era, “per minute”; in the internet era, “per traffic.” Today, whether it’s AI tokens or on-chain gas, fundamentally, the logic is the same: information is standardized into the smallest measurable unit that can be counted and charged for.

And the history of the past one hundred-plus years shows that after each such unit appears, wealth usually flows along a three-layer structure.

The first layer is those who provide infrastructure. In the telegram era, it was companies laying submarine cables; in the telephone era, it was operators building copper lines and switching equipment; in the internet era, it was companies deploying base stations, fiber optics, and cloud computing data centers. Today, it is GPU manufacturers like NVIDIA, as well as data center and computing infrastructure companies. This layer captures the dividend first, but usually requires extremely high capital investment.

The second layer is the compressing and efficiency-optimization players. When each new unit of information is first created, it is very expensive, so there will always be a group of companies that reduce usage costs through technological innovation. In the telegram era, people invented telegram ciphers that compress an entire message into a single word; in the internet era, there is CDN, data compression, and cloud services; today, there are all kinds of technologies that make computing power and model calls cheaper. As the industry matures, this layer typically becomes highly concentrated, eventually forming oligopolies.

The third layer is the entry layer, and historically it is also the easiest layer in which to produce giants. This layer neither lays infrastructure nor optimizes the underlying layer—it instead controls users. Reuters is a typical example. It doesn’t repair even one inch of cable, yet by purchasing underlying transmission capacity and packaging it into news and financial information services sold to customers worldwide, it earns more than many cable companies. Because the entry point determines traffic, and traffic determines value distribution.

Web3 companies only have two paths

Putting this historical framework back into today’s Web3 reveals that in the new industrial cycle, the development directions of Web3 companies are also converging into two paths.

The first path is “becoming the entry point.” That means directly controlling user relationships and becoming a new platform. Projects like Polymarket and Hyperliquid are essentially doing this. Users don’t care whether they are Web3 or not; they treat them as new service entry points. Once they become entry points, the valuation logic of the projects becomes closer to that of platform companies, rather than being just protocols.

The second path is “becoming the capability layer, absorbed by the giants.” Instead of directly competing for users, these projects build solid foundational capabilities and get integrated into the business systems of traditional giants. Stablecoins themselves are an example. They have not become user entry points, but instead have become a foundational capability when Visa and other traditional institutions expand global payments.

Future similar opportunities may include:

• On-chain identity

• Agent payments

• Decentralized verification

• Cross-border settlement protocols

• Compliance and audit infrastructure

These projects won’t define a new order, but they will become indispensable tools as the old order expands.

What is truly dangerous is a project that can neither become an entry point nor a capability layer. It cannot reach users, nor can it become a technology that the giants must procure. In the narrative-driven era, these projects could still obtain funding based on concepts; but in the results-driven era, the middle ground is disappearing quickly.

The future of Web3 lies in finding the right position

In the future, users may not even realize that they are using Web3. Just as today, when people use payment systems, very few of them care about which network protocols are behind it.

But that doesn’t mean Web3 has no opportunities. It is simply entering a more realistic stage: it must find its place within the new industrial structure. This may be the true watershed moment after Web3 is accepted by the mainstream.