Who is gaining value in Web 2.5?

Article Author: Bryan Daugherty

Article Compiled by: Block unicorn

For most 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 passing through a series of banks, each of which takes a commission. 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. However, 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. For this reason, cryptocurrencies are now playing a more complete infrastructure role in transferring existing traditional assets.

The integration 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. But people are not going to abandon systems they have been familiar with and using for decades just to try something new. No vendor is willing to receive payments via blockchain and then watch that money sit in their wallet, waiting for them to figure out how to convert it back into a bank account that can be used for daily expenses. Transferring funds from a wallet to a bank account incurs fees and, in most cases, requires compliance checks.

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

The ideal infrastructure is for cryptocurrencies to act as efficient, invisible enablers and the underlying carriers of traditional finance. We call this optimal state "Web 2.5." While this term may sound a bit awkward, the idea behind it 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-online settlement methods that cryptocurrencies offer. The two do not need to replace each other. Banks remain banks, while cryptocurrencies inject new vitality into the slow and outdated infrastructure of past fund flows.

But if cryptocurrencies become an invisible underlying layer, while traditional finance remains the familiar surface, then 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. Even so, its operating profit margin remains as high as 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 with a consortium of over 50 European and Korean banks (with total assets of about $10 trillion) to test real-time settlement of 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) serves as the 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 system 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 (processing about $47 trillion in securities transactions last year), has chosen the same Chainlink runtime to support its collateral applications on-chain.

In terms of traditional institutions, SWIFT is an 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 building a blockchain-based shared ledger with over 40 banks.

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 it can participate and have a voice in the decision-making process, it can continue to stay in the game. Therefore, it is building this layer itself.

Even sovereign nations are rushing into this field, trying to capture value from it. The Bank for International Settlements (BIS) has convened seven central banks and over forty private institutions to jointly 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

A translation layer that merely facilitates dialogue between both parties 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. However, Visa's market capitalization exceeds that of all banks globally, except for JPMorgan Chase.

The value brought by 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 as a way for banks to send standardized information to each other. Fifty years later, it has gained 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 imposed EU sanctions on Iranian banks to curb the country's nuclear program and relaxed sanctions after progress was made in 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 and are expected to exceed $250 trillion by 2030. If Chainlink and its consortium of 50 banks can capture even 1% of that market share, it would mean a potential market size (TAM) of over $1.5 trillion. Even with a fee of just 0.1%, Chainlink could generate $1.5 billion in revenue by building a bridge between traditional finance and on-chain settlements.

But there is something to note here. 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 field, which consolidates its position over decades.

Now, we have four different models—protocols, market utilities, bank 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. With advancements in fund flow technology, transaction processing itself has gradually become a commodity. As the cost of fund flow decreases, the accessible value primarily concentrates on two aspects. The first is authorization, which is the power of those who decide whether a transaction is feasible and under what conditions. The second is floating income, which is 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 two-way network effect. The more banks that connect on one side, the more attractive the settlement institution on the other side becomes, and vice versa. Each additional institution raises the cost of exiting for existing institutions. While there is competition among various banks and blockchains, the coordinating 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 allows businesses of all sizes to easily accept and manage online payments through a simple, developer-friendly API, thereby hiding the complexities of payment processors, acquiring banks, and payment networks. Then, it charges all users fees to eliminate transaction friction and hide it in the background.

For this reason, 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 intention 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, including Pangea, DTCC's AppChain, and Agorá, are still in pre-production stages, we are optimistic about the development 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 to abandon 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 jargon and hiding the infrastructure in the background.

The internet we use is essentially the transmission of information packets through a global computer network. While this is a nice piece of knowledge, it is not something to boast about if you just want to browse the web. No one cares whether the technology supporting these lightning-fast, low-cost transactions is cryptocurrency or something else.

Blockchain is gradually being commoditized, becoming 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 and whether funds flow.