Max Wong @ IOSG Ventures - June 2025

TLDR

• Infra ≥ saturation; consumer is the next frontier. After years of pouring money into new L1s, roll-ups, and tooling, marginal tech gains are small and users didn’t “just come.” Attention (not architecture) now drives value.
• Liquidity stalled, retail absent. Stablecoin market cap only ~25 % above 2021 ATH’s; recent inflows are mostly institutional BTC/ETH balance-sheet buys, not speculative capital that circulates through the ecosystem.
• Key Convictions
  • Regulatory tailwinds unlock a “second wave.” Clearer U.S. policy (Trump admin, stablecoin bills) expands TAM and invites web2 users who only care about apps they can touch, not the rails beneath them.
  • Narrative market rewards real usage. Projects with tangible revenue + PMF - Hyperliquid (~$900mn ARR), Pump.fun (~$500mn ARR), Polymarket (~$12 bn vol.) - vastly outperform high-funded infra names like Berachain, SEI, Story Protocol.
  • Web2 has always been an attention economy (distribution > tech); as web3 becomes ever increasingly mixed with web2, our market will also be the same - as such, B2C apps are ones that will grow the pie
• Current PMF consumer verticals (crypto-native):
  • Trading / perps (Hyperliquid, Axiom)
  • Launchpads / memecoin factories (Pump.fun, BelieveApp)
  • InfoFi & prediction markets (Polymarket, Kaito)
• Future PMF consumer verticals (web2-coded):
  • On-/off-ramp + DeFi super-apps - one-stop wallet, banking, yield, trading (Robinhood-style UX without the ad rails).
  • Entertainment / social platforms that replace ads with on-chain monetisation (swaps, bets, jackpots, creator tokens), improving UX and creator economics.
• AI & gaming still pre-PMF. Consumer AI needs safer account abstraction and infrastructure; web3 games struggle with farmer-driven economies. They’ll break out once a web3 title’s the main focus is on the game and not the crypto component.
• Superchain thesis. Activity is consolidating on a handful of consumer-optimised chains (Solana, Hyperliquid, Monad, MegaETH). Pick the killer apps, and the infra that directly supports them on those ecosystems.
• Investment lens for consumer apps:
  1. Distribution & execution > raw tech (network effects, viral loops, brand).
  2. UX, speed, liquidity, narrative fit are decisive.
  3. Evaluate like a business, not a protocol: real revenue, scalable model, clear path to dominance.
• Bottom line: Pure infra trades won’t mint 2021-style multiples. The outsized returns over the next 5 years will come from consumer apps that turn crypto’s rails into everyday experiences for millions of web2 users.

Introduction

Historically, there has been a huge focus on tech/infra, specifically building the rails - new Layer-1s, scaling layers, developer tooling, and security primitives. This was primarily driven by the eco’s “tech is king view”, where if the industry builds good and innovative tech, people will come. However, as we know, this is not true. Take a look at projects and protocols such as Berachain, SEI, and Story Protocol, all of which raised at insane valuations and were touted as the next big thing.

This cycle, however, with consumer projects hitting the spotlight, the conversation has decisively rotated toward what those rails are actually for. As core infrastructures reach “good-enough” maturity and marginal gains become incremental, both talent and capital have begun chasing consumer-facing apps/products, whether that be social, gaming, creator, and commerce experiences that can showcase blockchain value to retail and everyday users. As consumer markets are simply attention economies at it’s core, this has consequently led the general crypto market to become a narrative and attention market.

This insight report aims to explore: