A lot of the activity in crypto at the moment is centred around building and investing in infrastructure.
On the one hand, building infrastructure for a new technology stack like crypto is needed for applications to emerge. A lot of important infrastructure has been built over the past few years and still needs to be built to further improve the developer experience and power new types of applications.
However, progress in infrastructure and applications is not a choreographed sequence. Rather than infrastructure development reaching a steady state that initiates a period of application building, the reality is a mutually reinforcing cycle. As more applications arise, additional infrastructure is developed to support them, which then encourages further application development.
While the infrastructure that exists today is ready to support a wave of new applications, it feels that a disproportionate amount of resources continue to be dedicated to infrastructure over applications.
A primary reason for this is that infrastructure projects are often seen as less risky. Infrastructure companies enable others to build applications and acquire end users, which at a time when the merits of crypto are still so misunderstood by the mainstream, present a more palatable opportunity for founders and investors to pursue.
Crafting a unique end user experience with web3 technologies is hard. It requires founders to piece together new technologies in novel ways, while hiding the crypto wiring that can scare users away. Yet it is exactly these experiences that will pull in new users and drive the next wave of adoption.
While shovels will continue to be an important area of investment for us, we’d love to see and invest in more teams digging for gold.