Who Gains Value in Web 2.5?

Written by: Bryan Daugherty

Compiled by: Block unicorn

For much of financial history, the challenge has been the transfer of funds. The difficulty lies in how to pay from point A to point B, which requires navigating a series of banks, each taking a cut. Sometimes, this even involves 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, then these fast, low-cost transfers are meaningless. Dollars sitting in a crypto wallet are worth less than their actual value. This is why cryptocurrencies are now playing a more robust infrastructural role in transferring existing traditional assets.

The convergence of old and new financial systems has given rise to a new intermediary layer where value accumulates. In today’s article, I will explore who is capturing value in this new layer.

The Necessity of Web 2.5

For over a decade, the cryptocurrency industry has been trying to persuade people to download wallets, bridge assets across different blockchains, and store funds in new applications. However, people are not going to abandon systems they have been familiar with and using for decades just to try something new. No vendor wants to receive payments via blockchain and then watch the money sit in their wallet, waiting for them to figure out how to convert it back to a bank account for everyday spending. Transferring funds from a wallet to a bank account incurs fees and often requires compliance checks.

The issue has never been the ability of cryptocurrencies to transfer funds instantly, but rather the architecture requiring people to abandon systems they already use, such as bank accounts, credit cards, and payroll systems, in favor of entirely new systems. Access points, exit points, and bridging solutions are friction points that need to be hidden, not showcased. People will always accept new technologies that can transfer their existing funds to their current accounts faster and cheaper.

The ideal infrastructure is one where cryptocurrencies act as efficient, invisible enablers and traditional finance serves as the underlying carrier. We call this optimal state "Web 2.5." While the term may sound a bit awkward, the underlying concept is to leverage the strengths of both. We retain the essence of traditional finance, such as regulation, licensing, verification, and user interfaces and experiences that people already trust and use. Then, we combine this with the low-cost, programmable, and always-on settlement methods that cryptocurrencies provide. The two do not need to replace each other. Banks remain banks, while cryptocurrencies inject new vitality into the slow, outdated infrastructure of past fund flows.

But if cryptocurrencies become an invisible underlying layer while traditional finance remains the familiar surface, where does value accumulate in the new world of Web 2.5?

This layer connecting the two financial systems has historically held more value than most of the institutions it connects. Visa's operating profit last year (for the fiscal year ending September 2025) reached $24 billion, while the transaction fees on its network accounted for less than one percent of each transaction. Even so, its operating profit margin remains at a staggering 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, earning $2.9 billion from it.

The Intermediary Layer

Both sides are now building a conversion layer that allows banks to convert ISO 20022 instructions into on-chain settlements while retaining their infrastructure.

On June 23, Chainlink announced the launch of the Pangea project in collaboration with a consortium of over 50 European and Korean banks (with total assets of about $10 trillion) to test real-time settlements 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, connecting blockchains and other external payment systems without manual routing or bridging. It converts each conventional instruction into on-chain atomic swaps and returns the results for the bank systems to read.

Chainlink is a relatively new technology. However, the DTCC, which has a 50-year history and is at the center of the U.S. market, has chosen the same Chainlink runtime to support its collateral applications on-chain.

In terms of traditional institutions, SWIFT is a prime example. According to early predictions about cryptocurrencies, SWIFT was supposed to be the institution that blockchain would replace. Many predicted that stablecoins would bypass this information transmission monopoly. Eight years ago, this global messaging network for banks claimed that blockchain "was not ready for mainstream application." However, SWIFT is now collaborating with over 40 banks to build a blockchain-based shared ledger.

This is not a replacement for the SWIFT network but rather an orchestration layer built on top of it. The flow of funds on-chain has never been a threat. For SWIFT, their concern is being excluded from the layer that decides how funds flow on-chain. As long as they can participate and have a voice in the decision-making process, they can remain in the game. Therefore, they are building this layer themselves.

Even sovereign nations are rushing into this space, trying to capture value from it. 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 settlements using tokenized central bank reserves.

But is the real value in building bridges between two financial giants and/or banking behemoths?

The Value of Bridges

Simply having a translation layer that allows both sides to communicate may be more valuable than the players themselves.

Visa and Mastercard initially served as routing networks between banks and merchants. Even today, they do not hold deposits, issue any cards, or take on any risks. Yet, Visa's market capitalization exceeds that of all banks globally, except for JPMorgan Chase.

The value derived from operating a translation layer goes far beyond money. Those who decide the flow of funds also have the power to decide when to close that channel.

The SWIFT system was born in 1973, initially as a way for banks to send standardized information to each other. Fifty years later, it has amassed significant power to impose sanctions on countries. Over the past decade, the SWIFT system has played a crucial role in economic warfare, such as imposing sanctions on Russia due to its war in Ukraine. It has even sanctioned Iranian banks to curb the country's nuclear program and relaxed sanctions after progress was made on the nuclear agreement.

Chainlink is currently collaborating 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, with expectations to exceed $250 trillion by 2030. If Chainlink and its consortium of 50 banks could capture even 1% of that market, it would mean a potential market size (TAM) of over $1.5 trillion. Even charging just 0.1% in fees, Chainlink could generate $1.5 billion in revenue by building a bridge between traditional finance and on-chain settlements.

But there is a caveat. Both SWIFT and Visa have become dominant standards in their respective fields, and ultimately the entire system must adopt them. There can only be one winner in each domain, which consolidates its position over decades.

Now, we have four different models—protocols, market utilities, banking cooperatives, and central bank clubs—all vying 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 been around for a long time. As the technology for fund flows has advanced, transaction processing itself has gradually become a commodity. With the reduction in the cost of fund flows, the accessible value is primarily concentrated in two areas. The first is authorization, the power of those who decide whether a transaction is feasible and under what conditions. The second is floating income, the interest generated while funds are idle waiting to be transferred.

We have previously discussed how payments operate between AI agents (see here and here). Today, the same logic applies to interbank settlements.

This is what makes the intermediary coordination layer worth competing for. It creates a bidirectional network effect. The more banks that connect on one side, the more attractive it becomes for the settlement institutions on the other side, and vice versa. Each new institution increases the cost of existing institutions exiting. While there is competition among banks and blockchains, the institutions coordinating the conversion layer can serve all banks and blockchains and charge fees for it.

Stripe has adopted the same strategy in the credit card payment space. It provides a simple, developer-friendly API that allows businesses of all sizes to easily accept and manage online payments, thereby hiding the complexities of payment processors, acquirers, and payment networks. Then, it charges all users to eliminate transaction friction and hide it in the background.

This is why the connection layer has become a hot target for acquisitions. Once someone builds this connection layer, others would rather acquire it directly than start from scratch. Five years ago, Visa agreed to acquire Plaid for $5.3 billion, which illustrates this point. Although the deal ultimately fell through due to an antitrust lawsuit from the Department of Justice, the intent behind it was clear. Visa was attempting to acquire the market share of the connection layer operated by Plaid, which connects thousands of fintech applications to bank accounts.

The New World of Web 2.5

The world of Web 2.5 is more promising than the fully decentralized utopian vision of Web 3.0 because it does not require capital to flee existing participants in search of the services offered by cryptocurrencies. Instead, it uses cryptocurrencies as a more efficient underlying infrastructure for transferring funds and assets within the existing ecosystem.

Although bank-side projects like Pangea, DTCC's AppChain, and Agorá are still in pre-production stages, we are optimistic about the direction of participants like Chainlink. For a long time, there has been internal debate in the cryptocurrency space about how to build better crypto applications to attract users away from traditional payment methods. Developers have also debated which blockchain has the lowest gas fees and which tokens are best for storing funds. Web 2.5 makes these debates redundant by removing all the jargon and hiding the infrastructure in the background.

The internet we use is essentially packets of information data transmitted through a global network of computers. While this is good knowledge, it is not something to boast about if you just want to go online. No one cares whether the technology supporting these lightning-fast, low-cost transactions is cryptocurrency or something else.

Blockchain is gradually becoming commoditized, turning into an interchangeable, intangible, and low-margin component of transactions. Its value is now reflected in the business models of fund circulation, granting people a certain voice in how funds flow and whether they flow.

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