When encryption becomes a supporting role: Venture capitalists name the next unicorn will be born from "encryption-related rather than native companies".

The main stage of Crypto Assets is shifting. Dragonfly Capital partner Richard Chen pointed out that in the coming years, the trillion-dollar companies that will change the world are likely to no longer be crypto-native enterprises, but rather those that view encryption as a function rather than a product within the "crypto-related industries."

Unlike in the past, there’s a good chance the biggest outcomes the next few years will not be crypto-native but rather crypto-adjacent companies that use crypto as a feature rather than a product.

Examples: – Fintech company that uses stablecoins for intermediate leg of payments…

— Richard Chen (@richardchen39) May 27, 2025

From the protagonist to the accessory: Crypto is no longer a product, but an added highlight.

Richard pointed out that over the past decade, encryption technology itself has been a product, with public chains, protocols, and token economics becoming the market focus. But now, real innovation is happening at the borders:

Fintech companies use stablecoins as intermediate exchange tools for cross-border payments.

AI startups leverage decentralized infrastructure (DePIN) to incentivize data collection and computation.

Consumer technology companies are leveraging privacy technologies like zkTLS to unlock new insights into user behavior data.

These "crypto-adjacent companies (" do not have encryption at their core, but they create competitive advantages by flexibly incorporating encryption technology.

How does the market collapse impact VC? Crypto Assets venture capital is shifting from private equity to liquidity funds, with strategy flexibility becoming key.

No longer relying on hype: Traditional venture capital evaluation criteria have also become a focus.

With the rise of this wave of "encryption-related" entrepreneurship, investors must also readjust their evaluation framework. Unlike the past, which relied on token price speculation and project narrative appeal, the current rules of the game emphasize real capability. Specific indicators include:

年經常性收入：Annual Recurring Revenue )ARR(

用戶取得成本：Customer Acquisition Cost )CAC(

Customer Lifetime Value: Customer Lifetime Value )LTV(

Overall Potential Market: Total Addressable Market )TAM(

These indicators are no longer just tools for traditional venture capital )Trad VC(, but will also become fundamentals that crypto investors cannot ignore. The short-term capital bonuses brought by token issuance )TGE( have made it difficult to hide the emptiness of business models and operational performance.

) Written after ABCDE Capital exits: Is there a future worth building in encryption after VCs have successively left? (

Industry knowledge becomes an investment moat

In this trend, if crypto investors cannot quickly grasp knowledge of non-encryption industries, they will be forced to exit: "Successful encryption applications in the future will not occur in the creation and trading of on-chain assets, but will be embedded in physical industries." For example:

Understanding the importance of the robot supply chain and AI training data is a prerequisite for investing in the "AI and DePIN" fields.

Understanding the payment pain points and regulatory environment of emerging markets is key to entering the "fintech and stablecoin" space.

Richard warns: "If you still hold a Web3 native perspective while having only a superficial understanding of the application scenarios, you may miss out on those truly potential targets."

Crypto Assets related industry battlefield: greater potential, more intense competition

The charm of the encryption-related industry lies not only in the innovations at the application level but also in the immense market potential behind them. Compared to traditional L1, these new services are connecting to already mature and immensely large industrial sectors:

The TAM of global payments and financial markets far exceeds that of any single blockchain.

The AI data economy and computing resources market are experiencing explosive growth.

The demand for consumer technology and privacy data has reached a scale of one billion users.

For investors, this is not just a choice of asset allocation, but a strategic shift from closed communities to mainstream markets.

A bear market is not the end, but a filtering process for Crypto Assets projects.

It is not difficult to see that observing the overall market structure can also reveal signs of this transformation:

Since this year, the market value of the vast majority of altcoins ) has stagnated.

The fully diluted valuation of newly issued tokens (FDV) has also significantly contracted, with most projects struggling to break through one billion dollars.

The price trends between Bitcoin and other coins have shown significant differentiation.

These phenomena remind investors that the era in which a project could skyrocket in value simply through a white paper and hype is long over. In the future, capital will only flow to projects that have real users, a clear market, and a solid business model.

This article When encryption becomes a supporting role: Venture capital names the next unicorn will emerge from "crypto-related rather than native companies" first appeared on Chain News ABMedia.