Kyle Samani, co-founder of Multicoin Capital, has reignited debate about the future of the crypto industry after declaring that “Web3 is dead,” arguing that decentralized finance (DeFi) and decentralized physical infrastructure networks (DePIN) are the only sectors still offering clear value propositions.
Generally speaking, crypto seems to be going through an identity crisis.
On the one hand, several long-time OGs have left, and on the other, we’re finally seeing some love from institutions and TradFi, which is everything crypto has rebelled against.
It’s challenging crypto’s…— Eli Ben-Sasson | Starknet.io (@EliBenSasson) May 31, 2026
The remarks were made on X in response to comments from Eli Ben-Sasson, CEO of StarkWare and co-founder of Zcash, who suggested the crypto industry is facing an identity crisis as institutional participation continues to grow.
Crypto faces an identity shift
Ben-Sasson pointed to a noticeable shift in the industry’s direction, noting that several long-standing crypto advocates have stepped away while traditional financial institutions have become increasingly involved in the sector.
According to him, the growing influence of banks, asset managers, and regulated financial firms raises questions about crypto’s original mission. For years, the industry positioned itself as an alternative to traditional finance, emphasizing open networks, self-custody, and reduced reliance on centralized institutions.
However, much of the sector’s recent growth has come from products tied to traditional finance, including exchange-traded funds (ETFs), tokenized assets, and regulated stablecoin initiatives.
DeFi and DePIN stand out
While dismissing the broader Web3 narrative, Samani argued that DeFi and DePIN remain the strongest areas of crypto adoption.
DeFi continues to serve as one of blockchain’s most active sectors, providing lending, trading, payments, and stablecoin services without relying on traditional intermediaries.
Meanwhile, DePIN has emerged as a growing category focused on connecting blockchain incentives with physical infrastructure. The sector includes projects supporting wireless networks, cloud computing, storage systems, sensors, and other real-world services powered by decentralized participants.
Institutional growth reshapes the market
The increasing presence of traditional finance has transformed discussions around crypto adoption. Large financial institutions now play an important role in providing liquidity, investment products, and access to digital assets.
While some industry participants view this shift as a departure from crypto’s original vision, others see it as a key step toward mainstream adoption. A recent report from Binance Research suggests that crypto adoption could accelerate rapidly over the next decade as platforms continue removing the barriers that once made entry difficult.
Meanwhile, Kyle Samani announced in February that he is stepping back from his daily leadership role at the venture capital firm. Samani revealed he will focus on emerging technological frontiers, specifically AI, robotics, and longevity technology.
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