Kyle Samani Web3 Vision: The Stunning Reversal That Shook Crypto’s Foundations

In a stunning development that sent shockwaves through the cryptocurrency community, Multicoin Capital co-founder Kyle Samani publicly declared his lost faith in the expansive Web3 vision, marking a pivotal moment for blockchain philosophy and investment strategy in early 2025. This unexpected reversal from a prominent venture capitalist who helped shape crypto’s narrative for nearly a decade reveals deeper industry maturation and fundamental reassessments occurring behind the scenes. The announcement, made via social media before Samani’s formal resignation, represents more than personal opinion—it signals potential inflection points for blockchain technology’s perceived limitations and practical applications.

Kyle Samani’s Web3 Vision Reversal Explained

Kyle Samani articulated his transformed perspective with remarkable clarity before deleting the controversial post. He fundamentally described blockchain technology as “merely a ledger” that would undoubtedly reshape global finance but would find limited utility beyond that core function. This represents a significant departure from the Web3 evangelism that characterized Multicoin Capital’s early positioning and investment thesis. Samani specifically noted that while cryptocurrency values would continue increasing, the answers to most interesting technological questions—with the notable exception of on-chain confidentiality—had already been discovered and implemented.

The venture capitalist did identify one area retaining his interest: DePIN (Decentralized Physical Infrastructure Networks). These networks leverage blockchain tokens to coordinate and incentivize real-world infrastructure deployment, including wireless networks, data storage, and computing resources. Samani’s continued belief in DePIN suggests his disillusionment centers on blockchain’s social and governance applications rather than its economic coordination mechanisms. This nuanced position reflects broader industry conversations about blockchain’s appropriate scope and realistic ambitions.

Multicoin Capital’s Evolving Investment Philosophy

Multicoin Capital established itself as one of crypto’s most influential venture firms since its 2017 founding, managing approximately $3 billion in assets across multiple funds. The firm gained recognition for early investments in Solana, Helium, and The Graph—projects embodying the Web3 vision of decentralized applications and user-owned internet infrastructure. Samani’s public statements therefore represent not just personal evolution but potential strategic shifts within the organization he co-founded with Tushar Jain.

Industry analysts immediately noted the timing significance. Samani made his comments shortly before announcing his resignation from Multicoin Capital’s day-to-day operations, though he maintains his partnership role and economic interest. This sequence suggests his philosophical reassessment preceded and potentially influenced his operational departure. The firm’s recent investment patterns show increased focus on infrastructure and financial primitives rather than consumer-facing decentralized applications, aligning with Samani’s expressed views.

Historical Context of Web3 Disillusionment

Samani’s perspective shift follows a broader pattern of blockchain realism emerging throughout 2024-2025. Several factors contributed to this industry maturation:

• Regulatory clarity established clearer boundaries for blockchain applications
• Technical limitations became apparent regarding scalability and user experience
• Market cycles separated sustainable projects from speculative concepts
• Enterprise adoption focused primarily on financial infrastructure rather than social applications

Prominent technologists like Moxie Marlinspike and Stephen Diehl expressed similar skepticism about Web3’s decentralization claims years earlier, but Samani’s comments carry unique weight given his insider status and investment influence. His perspective reflects practical experience deploying capital rather than theoretical criticism.

The DePIN Exception and Blockchain’s Practical Future

Samani’s continued endorsement of DePIN projects reveals his specific rather than general blockchain skepticism. Decentralized Physical Infrastructure Networks represent perhaps the most tangible blockchain application beyond pure finance, creating real-world utility through token incentives. Successful DePIN implementations include:

These networks demonstrate blockchain’s unique capacity to coordinate physical infrastructure deployment without centralized corporate entities. Samani’s distinction suggests he views blockchain primarily as a superior coordination mechanism for resource allocation rather than a foundation for entirely new internet architectures. This pragmatic assessment aligns with increasing institutional adoption patterns observed throughout 2024.

Industry Reactions and Expert Analysis

The cryptocurrency community responded with vigorous debate following Samani’s statements. Ethereum co-founder Vitalik Buterin previously addressed similar critiques in his “The End of the Beginning” essay, acknowledging blockchain’s limitations while maintaining optimism about gradual progress. Contrastingly, Solana founder Anatoly Yakovenko consistently emphasized blockchain’s potential to rebuild internet infrastructure from first principles.

Several industry analysts interpreted Samani’s comments as representative of venture capital’s evolving approach to blockchain investing. The initial Web3 vision promised revolutionary changes to social media, content creation, and digital identity. However, practical implementation revealed significant challenges regarding user adoption, regulatory compliance, and technical scalability. Consequently, investment shifted toward infrastructure and financial applications demonstrating clearer paths to sustainability and profitability.

On-Chain Confidentiality: The Remaining Frontier

Samani specifically highlighted on-chain confidentiality as blockchain’s last major unsolved problem, referencing technologies like zero-knowledge proofs and fully homomorphic encryption. These privacy-preserving technologies enable transaction validation without revealing sensitive data, potentially unlocking blockchain applications in healthcare, enterprise collaboration, and personal finance. Several projects, including Aztec Network and Penumbra, actively develop solutions in this domain, suggesting Samani’s critique acknowledges ongoing innovation within specific technical boundaries.

Financial institutions particularly require confidentiality for blockchain adoption in regulated markets. Current public blockchain transparency creates compliance challenges for traditional finance integration. Solving confidentiality could therefore represent blockchain’s next major adoption catalyst following infrastructure development and scalability improvements.

Conclusion

Kyle Samani’s Web3 vision reversal represents blockchain technology’s natural maturation from revolutionary promise to practical implementation. His perspective highlights blockchain’s proven strength in financial infrastructure and emerging potential in physical infrastructure coordination through DePIN networks, while questioning broader social and governance applications. This nuanced assessment reflects industry-wide recalibration as blockchain moves beyond speculative enthusiasm toward sustainable utility. The continued focus on on-chain confidentiality and DePIN development suggests blockchain’s evolution continues, albeit within more defined parameters than early Web3 visionaries imagined.

FAQs

Q1: What exactly did Kyle Samani say about Web3?
Kyle Samani stated he no longer believes in the Web3 vision, describing blockchain as primarily a ledger that will reshape finance but has limited roles beyond that. He made these comments on social media before announcing his operational resignation from Multicoin Capital.

Q2: Does Samani still believe in any blockchain applications?
Yes, he specifically mentioned continued belief in DePIN (Decentralized Physical Infrastructure Networks) and acknowledged that on-chain confidentiality remains an important unsolved problem. His criticism appears focused on blockchain’s social and governance applications rather than its economic coordination mechanisms.

Q3: How might this affect Multicoin Capital’s investment strategy?
While Samani maintains his partnership, his reduced operational role and stated views suggest Multicoin may increasingly focus on infrastructure and financial applications rather than consumer-facing Web3 projects. The firm’s recent investments already show this directional shift.

Q4: What are DePIN networks and why are they important?
DePIN networks use blockchain tokens to coordinate and incentivize real-world infrastructure deployment, including wireless networks, data storage, and computing resources. They represent blockchain’s most tangible application beyond finance, creating physical utility through decentralized coordination.

Q5: Is Web3 development slowing down following such criticisms?
Development continues across multiple blockchain ecosystems, but focus has shifted toward practical applications with clear utility. The initial expansive Web3 vision has evolved into more targeted development in finance, infrastructure, and specific vertical applications where blockchain provides unique advantages.