Article translation: Block unicorn
Who is capturing value in Web 2.5?
For most of financial history, the challenge has been transferring funds. The difficulty lay in moving money from point A to point B, which required going through a series of banks, each taking a commission. Sometimes, this even involved cross-border fund transfers.
Over the past decade, cryptocurrencies and stablecoins have promised to minimize these frictions through crypto applications and wallets. But if these funds cannot be used within the broader economic system, these fast, low-cost transfers are meaningless. Dollar value trapped in a crypto wallet is worth less than its actual value. That’s why cryptocurrencies today are playing a more refined role as infrastructure for transferring existing traditional assets.
The convergence of old and new financial systems has created a new intermediate layer where value is accumulating. In today’s article, I’ll explore who is capturing value in this new layer.
The necessity of Web 2.5
For over a decade, the cryptocurrency industry has struggled to convince people to download wallets, move assets across different blockchains, and deposit funds into new applications. But people won’t abandon systems they’ve known and used for decades just to try something new. No vendor is willing to accept payments via blockchain and then watch that money sit idle in their wallet, waiting for them to figure out how to convert it back into a bank account they can use for everyday expenses. Transferring funds from a wallet to a bank account requires transaction fees and, in most cases, compliance checks.
The issue has never been cryptocurrency’s ability to transfer funds instantly, but rather that its architecture requires people to abandon systems they already use—such as bank accounts, credit cards, and payroll systems—in favor of entirely new ones. Access points, exit points, and bridging solutions are friction points that need to be hidden, not features to be flaunted. People will always adopt new technologies that allow them to move their existing funds faster and cheaper into their current accounts.
The ideal infrastructure is one where cryptocurrency serves as an efficient, invisible enabler and the underlying backbone of traditional finance. We call this optimal state “Web 2.5.” While the term may sound slightly awkward, the underlying idea is to combine the strengths of both worlds. We retain the essentials of traditional finance—such as regulation, licensing, verification, and the user interfaces and experiences people already trust and use—and combine them with cryptocurrency’s low-cost, programmable, and always-on settlement capabilities. The two do not need to replace each other. Banks remain banks, while cryptocurrency breathes new life into infrastructure that has long been slow and outdated.
But if cryptocurrency becomes an invisible underlying layer, while traditional finance remains the familiar surface, where does value accumulate in this new Web 2.5 world?
This layer connecting two financial systems has historically been worth more than most of the institutions it connects. Visa generated an operating profit of $24 billion last year (fiscal year ending September 2025), with transaction fees accounting for less than one percent of each transaction. Even so, its operating margin remained at 60%. The Depository Trust & Clearing Corporation (DTCC), which is currently building its own on-chain settlement system, processed $47 trillion in securities transactions in 2025 and earned $2.9 billion in profit.
Middle layer
Both institutions are now building conversion layers that enable banks to translate ISO 20022 instructions into on-chain settlement while retaining their existing infrastructure.
On June 23, Chainlink announced the launch of the Pangea project with a consortium of over 50 European and Korean banks, whose combined assets total approximately $10 trillion, to test real-time settlement for foreign exchange transactions.
The goal is to transition the foreign exchange settlement infrastructure from the traditional T+2 cycle to a real-time T+0 model.
Chainlink's Runtime Environment (CRE) acts as an orchestration layer that connects blockchains with other external payment systems without requiring manual routing or bridging. It converts each standard instruction into an on-chain atomic swap and returns the result for the banking system to read.
Chainlink is a relatively new technology. However, DTCC, a 50-year-old institution located at the heart of the U.S. market that processed approximately $4.7 trillion in securities transactions last year, has chosen the same Chainlink runtime to power its collateral application chain.
In the traditional institutional space, SWIFT is an example. According to early predictions about cryptocurrency, SWIFT was expected to be the institution replaced by blockchain. Many anticipated that stablecoins would bypass this information transmission monopoly. Eight years ago, this global messaging network for banks called blockchain “not ready for mainstream adoption.” Yet today, SWIFT is working with more than 40 banks to build a blockchain-based shared ledger.
It is not a replacement for the SWIFT network, but an orchestration layer built on top of it. The movement of funds on-chain itself has never been a threat. For SWIFT, their concern is being excluded from the layer that determines how funds flow on-chain. As long as it can participate and have a voice in the decision-making process, it can remain in the game. Therefore, it is building this layer itself.
Sovereign nations are also flocking to this space, seeking to capture value. The Bank for International Settlements (BIS) has convened seven central banks and over forty private institutions to launch the "Agorá Project," aimed at testing atomic settlement using tokenized central bank reserves.
But is the real value in building a bridge between two financial giants and/or banking giants?
The value of the bridge
The translation layer that merely enables dialogue between the two parties may be more valuable than the players themselves.
Visa and Mastercard were originally routing networks between banks and merchants. Even today, they do not hold deposits, issue any cards, or assume any risk. Yet, Visa’s market capitalization exceeds that of all global banks except JPMorgan Chase.
The value brought by the operations translation layer extends far beyond money. Those who decide where funds flow also have the authority to shut down this channel.
The SWIFT system was established in 1973 as a means for banks to exchange standardized messages with one another. Fifty years later, it has gained immense power to enforce sanctions against nations. Over the past decade, SWIFT has played a pivotal role in economic warfare, such as imposing sanctions on Russia due to its war in Ukraine. It has also enforced European Union sanctions on Iranian banks to curb the country’s nuclear program, and later eased those sanctions as progress was made on the nuclear deal.
Chainlink is currently partnering with Project Pangea to pilot addressable liquidity pools for real-time settlement of foreign exchange transactions, which is significant.
Cross-border payments range from $150 trillion to $190 trillion annually and are projected to exceed $250 trillion by 2030. If Chainlink and its alliance of 50 participating banks capture even 1% of this market, their total addressable market (TAM) would exceed $1.5 trillion. Even with a mere 0.1% fee, Chainlink could generate $1.5 billion in revenue by bridging traditional finance with on-chain settlement.
But there’s one important point to note: SWIFT and Visa have become the dominant standards in their respective fields, and ultimately, the entire system has had to adopt them. Each field has had only one winner, which has solidified its position over decades.
Currently, we have four distinct models—protocol, market utility, bank cooperative, and central bank club—competing for the same single translation layer to connect the financial worlds of Web 2.0 and Web 3.0.
Licensing and Floating
The economic mechanisms driving this layer of value have long existed. As payment technologies have advanced, the processing of transactions itself has gradually become a commodity. With the cost of payment flows decreasing, the primary sources of value are now concentrated in two areas: first, authorization—the power to determine whether a transaction is viable and under what conditions; and second, float—the interest generated while funds are held temporarily before transfer.
We previously explored how payments work between AI agents (see here and here). The same logic now applies to interbank settlements.
It is precisely this that makes the intermediate coordination layer worth competing for. It creates a two-sided network effect: the more banks one side connects, the more attractive it becomes for settlement institutions on the other side, and vice versa. Each additional institution increases the cost for existing ones to exit. Although competition exists among individual banks and blockchains, the entity coordinating this conversion layer can serve all banks and blockchains while charging fees.
Stripe has adopted the same strategy in the credit card payment space. By providing a simple, developer-friendly API, it enables businesses of all sizes to easily accept and manage online payments, abstracting away the complexity of payment processors, acquirers, and payment networks. It then charges fees to all users to eliminate transaction friction and hide it behind the scenes.
This is precisely why the connectivity layer has become a popular target for acquisitions. Once someone builds this connectivity layer, others prefer to acquire it outright rather than rebuild it from scratch. We saw this five years ago when Visa agreed to acquire Plaid for $53 billion. Although the deal ultimately fell through due to an antitrust lawsuit by the Department of Justice, the intent behind it was clear: Visa sought to acquire Plaid’s share of the connectivity layer that links thousands of fintech applications to bank accounts.
The new world of Web 2.5
The world of Web 2.5 holds more promise than the fully decentralized Web 3.0 utopian vision, as it does not require capital to flee existing participants in search of services offered by cryptocurrencies. Instead, it treats cryptocurrencies as a more efficient underlying infrastructure for moving funds and assets within the existing ecosystem.
Although bank-side projects including Pangea, DTCC’s AppChain, and Agorá are still in pre-production, we are optimistic about the direction of participants like Chainlink. For years, internal debates within the cryptocurrency space have revolved around how to build better crypto applications to lure users away from traditional payment methods. Developers have also argued over which blockchain has the lowest gas fees and which token is best for storing value. Web 2.5 renders these debates obsolete by eliminating all jargon and hiding the infrastructure in the background.
The internet we use is essentially packets of information transmitted across a global network of computers. While this is certainly useful knowledge, it’s not something to boast about if you simply want to go online. No one cares whether the technology enabling these lightning-fast, low-cost transactions is cryptocurrency or something else.
Blockchain is gradually being commoditized, becoming an interchangeable, intangible, and low-margin component in transactions. Its value is now reflected in business models centered around the flow of funds, granting people a degree of agency over how and whether funds move.
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