The Next Financial System Is Being Built Right Now

ABOUT THE AUTHORS

On election night 2024, Polymarket called the presidential race hours before the cable networks did. Not because it had better polls or inside information. Because millions of dollars in real stakes forced participants to be honest about what they actually believed. What matters for investors is this: when real money meets new infrastructure, entirely new markets can form and have the potential to scale quickly.

That night felt like a curiosity. Eighteen months later, it looks more like a turning point. The parent company of the New York Stock Exchange has since committed close to $2 billion to Polymarket.¹ Rival platform Kalshi raised roughly $1 billion at a $22 billion valuation. DraftKings and FanDuel are launching their own prediction products. An entirely new category of marketplace emerged — one where information and knowledge can be priced and traded as digital assets — showed strong early demand, attracted Wall Street capital, and is now getting regulated into the mainstream.

Meanwhile, digital assets crossed a threshold of their own. The GENIUS Act became America’s first federal regulatory framework for stablecoins. The SEC reduced capital requirements related to certain blockchain-based financial instruments, influencing how institutions evaluate their use.

And underneath all of it, Blockchain infrastructure kept maturing. High-throughput chains that can handle institutional-scale volume. Modular data layers where AI systems can verify the information they’re operating on. Enterprise accounting tools that translate on-chain activity into formats CFOs and auditors already understand.

Here’s the key insight for investors: these trends don’t just coexist, they actually reinforce each other. Blockchain provides the rails. Digital assets provide the programmable value that flows across those rails. And new marketplaces, from prediction markets to decentralized social platforms to on-chain exchanges, provide the venues where that value gets discovered, priced, and traded. When all three align, you get systems that can scale faster and create new venture opportunities.

For a long time, the crypto conversation treated these as separate worlds. Blockchain was about Layer 1 protocols. Digital assets meant tokens and stablecoins. Marketplaces were DeFi or NFTs. But in 2026, convergence began. The companies building the most important infrastructure are operating across all three simultaneously. And together, they’re assembling something that starts to look like the financial plumbing for the next era of the internet.

At Alumni Ventures, we’ve been closely watching this space for years across multiple market cycles. Here’s how we see the landscape organizing itself around four infrastructure layers, and why each one matters right now. These four layers also form the investment thesis behind Alumni Ventures’ Blockchain, Digital Assets & Marketplaces Fund 6.

The Foundation: Decentralized Infrastructure

Every market needs rails. Before you can settle blockchain-based transactions or trade a tokenized asset, you need a blockchain that’s fast, secure, and cheap enough to handle the volume.

An analogy helps. When people talk about “the internet,” they rarely mean TCP/IP. They mean email, streaming, e-commerce. But none of those applications exist without the protocol layer underneath. Blockchain infrastructure plays the same role for value transfer: it enables trust and coordination without centralized intermediaries, globally, around the clock.

What’s worth watching is how quickly this layer is evolving. Early proof-of-stake chains like Algorand (AV portfolio company)  proved the concept. High-throughput platforms like Sui built by AV portfolio company Mysten Labs, founded by former Facebook Novi and Diem researchers) pushed performance closer to what financial applications actually demand. And now a new generation is emerging at the intersection of AI and blockchain. Companies like Zero Gravity (AV portfolio company) are building modular data infrastructure for verifiable on-chain computation, giving AI systems a way to cryptographically prove the data they’re operating on is legitimate.

That last point deserves emphasis. AI agents are starting to make autonomous decisions in financial markets. Buying data. Executing trades. Settling transactions. No human in the loop. These systems can’t call customer service when something fails. They can’t eyeball a data source and decide whether to trust it. They need infrastructure that verifies information cryptographically, at machine speed, before they act on it. That’s what on-chain data layers provide. And the convergence of AI and blockchain infrastructure might be the most consequential trend in this space over the next five years.

The Connective Tissue: Payments and Liquidity

Here’s a notable trend: blockchain-based payment networks processed rapidly growing transaction volumes in 2025, reflecting increasing experimentation and adoption across financial use cases.

Important caveats apply. Much of that digital asset volume is trading activity, not consumer payments. Actual stablecoin payments were closer to $390 billion,⁴ which is still a doubling from 2024 and heavily concentrated in B2B payments and cross-border remittances. While still evolving, the growth trend suggests increasing interest in these systems.

Regulatory developments have played a role in shaping how institutions evaluate these systems. The GENIUS Act created clearer regulatory frameworks for certain blockchain-based financial systems. Then the SEC’s capital haircut change opened the floodgates. Previously, regulatory treatment limited how these instruments could be used on balance sheets. With updated guidance, some institutions are beginning to evaluate related blockchain-based systems for specific use cases, subject to regulatory and risk considerations. This type of regulatory change may influence how institutions approach adoption of these systems.

Several developments highlighted growing institutional engagement in the sector: Visa, Mastercard, Stripe, and Western Union have all announced stablecoin integrations. PayPal introduced blockchain-based payment capabilities as part of its broader digital payments strategy. JPMorgan issued tokenized deposits on Ethereum. B2B stablecoin payments surged from under $100 million monthly in early 2023 to over $6 billion by mid-2025.5

We see this playing out across our own portfolio. Circle (AV portfolio company), issuer of USDC and now publicly traded on the NYSE, has become core infrastructure for regulated stablecoin settlement globally. Kite AI (AV portfolio company) is building payment rails designed specifically for AI agents, so autonomous systems can transact and settle without a human in the loop. And Lemon (AV portfolio company) is bringing stablecoin-based financial services to millions of users across Latin America, where demand for stable digital dollars is strongest.

The infrastructure opportunity is straightforward. Someone has to build the payment rails that enable blockchain-based value transfer between institutions, across borders, and between autonomous AI systems. Someone has to build the vault infrastructure for deploying capital on-chain. Someone has to build the compliance layer that makes all of it auditable. Those are the companies worth watching.

The “Boring” Middle: Enterprise Enablement 

We call this the boring middle because nobody writes breathless headlines about enterprise accounting software. But this layer might matter more than any other for blockchain’s long-term adoption. 

The problem is simple. A Fortune 500 CFO might understand why blockchain-based settlement is faster and cheaper. But their next question is always practical: “How does this show up on my balance sheet? Can my auditor verify it? Does it break my ERP system?” If the answer is unclear, the conversation ends. Institutional capital doesn’t flow until the back office is comfortable. 

That’s why companies bridging blockchain to traditional finance, accounting, and compliance matter so much. Digital asset accounting platforms that translate on-chain activity into standard reporting formats. Blockchain-based credential and agreement platforms that make documents verifiable and legally binding. Automated workflows that handle KYC, tax reporting, and audit trails without requiring enterprises to rebuild everything from scratch. Our portfolio reflects the breadth of this layer. Bitwave (AV portfolio company) builds enterprise accounting and compliance infrastructure that connects digital assets with financial reporting, ERP systems, and tax workflows, recently launching an AI assistant for automating finance operations. EthSign (AV portfolio company) brings legally binding agreements on-chain with cryptographic verification, essentially DocuSign for Web3. And TransCrypts (AV portfolio company) enables organizations to issue, verify, and manage credentials and compliance records securely on-chain. None of these make crypto Twitter headlines. All of them determine whether institutional adoption actually happens. 

Now consider what’s happening around these companies. BlackRock, Morgan Stanley, and Vanguard have launched crypto ETFs. Financial advisors can recommend 1–4% crypto allocations to clients. Robinhood launched tokenized stocks on Arbitrum. Every one of these developments increases the surface area of blockchain activity that enterprises need to account for, comply with, and report on. The demand for enterprise enablement infrastructure scales directly with institutional adoption. That’s a powerful tailwind that has nothing to do with token prices. 

The Interface Layer: Networks and Marketplaces

If the first three layers are about building the pipes, this one is about what flows through them.

As the internet evolves from a network of information to a network of ownership, new kinds of marketplaces keep emerging. Prediction markets are the most visible example. We opened this piece with Polymarket for a reason. But the pattern is repeating across multiple categories.

Decentralized social is another one. Our portfolio company Bluesky (AV portfolio company) grew from 10 million users in September 2024 to over 40 million by late 2025.6 What makes it interesting from an infrastructure perspective isn’t the user count alone. It’s that Bluesky is built on a protocol where users own their identity, data, and social graph. Your followers, your content, your reputation become portable, verifiable assets rather than data locked inside a platform’s walled garden. That’s a fundamentally different model for how social capital works online.

Then there are the exchanges. Kraken (AV portfolio company) raised $800 million at a $20 billion valuation in late 2025 with backing from Citadel Securities and Jane Street.7 On-chain data intelligence platforms are building the analytical layer for DeFi, essentially Bloomberg terminals for on-chain markets. And prediction market revenue could reach $8 billion by 2030 according to Piper Sandler analysis, as the category takes share from traditional sports gambling.

The common thread across all of these: network-effect businesses where liquidity attracts more liquidity, data attracts more participants, and the platforms that reach critical mass early tend to compound their advantage. When blockchain provides the rails, digital assets provide the value, and marketplaces provide the venue, you get something more powerful than any one of those pieces alone.

Why the Timing Matters 

Every previous blockchain cycle was driven primarily by speculation. ICOs in 2017. DeFi summer in 2020. NFTs in 2021. Each left wreckage, but also real infrastructure. 

Three things are different this time. 

First, regulation arrived. Not perfectly, not completely, but substantively. The GENIUS Act. The CLARITY Act (passed the House with bipartisan support, moving through the Senate). The SEC’s stablecoin guidance. Regulatory clarity has improved in recent years, there’s a real framework that institutions can operate within. 

Second, the use cases shifted from speculation to utility. There is increased usage of blockchain-based payment systems in B2B contexts. Enterprise accounting tools for digital assets. AI agents that need programmable, instant settlement. Real problems being solved by real infrastructure. 

Third, the institutional on-ramps are built. Circle is public. Crypto ETFs exist. Financial advisors are authorized to recommend allocations. The question used to be “Will institutions participate?” Now, institutional participation appears to be increasing. 

None of this means the risks have disappeared. Blockchain investing involves substantial risk, including the potential loss of all capital invested. Regulatory frameworks are still evolving. Markets remain volatile. Many early-stage companies in this space will fail. Anyone considering exposure should do so with a long time horizon and clear eyes about the risks involved. 

But the infrastructure layer has reached a point where the companies building it are solving problems that grow with adoption, not problems that depend on token prices going up. That’s a meaningful difference from previous cycles. And it’s why the convergence of blockchain, digital assets, and marketplaces is worth paying close attention to right now. 

Sources:

[1] Intercontinental Exchange press release, October 7, 2025; additional $600M investment reported March 2026. 

[2] Bloomberg / Artemis Analytics, “Stablecoin Transactions Rose to Record $33 Trillion in 2025,” January 8, 2026.

[3] CNBC, “Stablecoin issuer Circle soars 168% in NYSE debut,” June 5, 2025.

[4] Artemis Analytics / Phemex, “Stablecoin Payments: Only 10% of Total Volume in 2025,” January 2026.

[5] Stablecoin Insider / Artemis Analytics, “50 Stablecoin Statistics That Matter in 2026,” January 2026. 

[6] Sprout Social / Backlinko, Bluesky user statistics, updated 2026. 

[7] CoinDesk, “Crypto exchange Kraken raises $800M at $20B valuation,” November 2025. 

This communication is from Alumni Ventures, a for-profit venture capital company that is not affiliated with or endorsed by any school. It is not personalized advice, and AV only provides advice to its client funds. This communication is neither an offer to sell, nor a solicitation of an offer to purchase, any security. Such offers are made only pursuant to the formal offering documents for the fund(s) concerned, and describe significant risks and other material information that should be carefully considered before investing. For additional information, please see here. Achievement of investment objectives, including any amount of investment return, cannot be guaranteed. Co-investors are shown for illustrative purposes only, do not reflect all organizations with which AV co-invests, and do not necessarily indicate future co-investors. Example portfolio companies shown are not available to future investors, except potentially in the case of follow-on investments. Venture capital investing involves substantial risk, including risk of loss of all capital invested. Diversification cannot prevent investment loss; it is a strategy to mitigate investment risk. This communication includes forward-looking statements, generally consisting of any statement pertaining to any issue other than historical fact, including without limitation predictions, financial projections, the anticipated results of the execution of any plan or strategy, the expectation or belief of the speaker, or other events or circumstances to exist in the future. Forward-looking statements are not representations of actual fact, depend on certain assumptions that may not be realized, and are not guaranteed to occur. Any forward-looking statements included in this communication speak only as of the date of the communication. AV and its affiliates disclaim any obligation to update, amend, or alter such forward-looking statements, whether due to subsequent events, new information, or otherwise.

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