Encryption transformation of traditional businesses: hybrid innovation becomes the new main line of Web3

2025/07/28 17:00

After observing the projects that have been favored in the primary investment market recently, I found a commonality: they all tend to "hybrid innovation" and use web3's technology infra to carry the proven mature business logic of the web2 business model. For example,

lightyear moved the traditional stock ETF investment logic to Web3, Hilbert Group specialized in digital asset quantitative strategies, OkaFund made professional configuration of encrypted assets, Elysium Lab created a daily Bitcoin payment wallet, etc.

Most of these projects belong to the category of integrated innovation, which is essentially consistent with the operating logic behind some web3 projects "backdoor listing" and some US stock reserve encrypted assets involved in Crypto.

Why does this trend occur? To be honest, there are three core reasons behind it:

1) Pure native chain innovation projects encounter a ceiling. Not only is it difficult for the user scale to break through the circle, the business model is also highly dependent on Tokenomics incentives. The key is that the narrative and business design have also fallen into the dilemma of "self-entertainment", which is obviously very passive in a sluggish market with relatively scarce liquidity;

2) The "crypto-friendly" characteristics of the regulatory environment are evident. BTC and ETH ETF spot, the establishment of the GENIUS and CLARITY Acts, the FOMO entry of Wall Street financial institutions, etc., have all turned crypto assets from niche speculative targets into more mainstream financial derivatives. Undoubtedly, in this case, actively embracing the mature business model of traditional finance or actively looking for hybrid innovation directions such as web3's available technology infra will be "hot cakes";

3) Users' investment needs are also becoming more mature. Originally, crypto users often care about whether the product or protocol is decentralized and rate the project according to the strength of consensus, but with the influx of a large number of people in the mainstream web2, users actually only care about whether it is easy to use, safe, and profitable. Therefore, products with simpler experience and more direct results will have a better market.

So, what will be the next investment direction? Following this line of thought, we can make a judgment that the mainstream investment direction in the next 3-5 years may revolve around the "encryption transformation of traditional business"? :

1. A large number of "traditional business logic + encryption technology bottom layer" projects will emerge in the segmented financial markets such as investment, payment, asset management, insurance, credit reporting, supply chain finance, and cross-border trade settlement. Encryption infra will tend to be hidden in the back end, only to solve the problems of cost, efficiency, and transparency, while the front-end experience perceived by users is almost the same as that of traditional products;

2. Technical standardization and "invisibility" of infrastructure will become an important trend. The new infra supporting the integration and innovation of web3+web2 is no longer limited to the original Crypto Native category, nor does it pursue the coolness of technical concepts, but only focuses on providing reliable, efficient, and low-cost encryption technology support. "Modularization, chain abstraction, etc." are no longer the hot track that is sought after, but they will actually become the bottom layer of some eye-catching products;

3. Traditional financial institutions will turn to "active entry". It is no longer a simple purchase of coins for reserve or investment in Web3 projects, but a direct use of one's own licenses, resources, and user base to localize crypto business. For example, banks launch stablecoin payments, insurance companies issue on-chain policies, and securities firms provide crypto asset custody. Such giants will bring in larger funds and users, increase productization, and drive the industry to mature.

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