Estimated reading time: 7 minutes · Last updated: 2026-08-11
Web3 has long cycled through narratives driven by headlines and asset prices. The shift in focus, Varun Datta argues, is toward the underlying infrastructure—the settlement, custody, tokenisation and interoperability layers that make decentralised technologies usable at scale. In his view, institutions are increasingly asking how decentralised technologies can improve traditional finance, rather than whether digital assets belong in portfolios. This is not a momentary trend but a pivot toward the foundational components that will enable broader adoption over years, not just cycles. The piece maps how long-horizon investment logic, experience with regulation, and the demand for durable utility are reorienting capital toward the Web3 stack.
Infrastructure is no longer viewed as a niche part of Web3. It is increasingly being recognised as the foundation upon which tokenisation, digital ownership, decentralised finance and many future financial applications will be built.
Varun Datta
Key takeaways
- Shift from headlines to infrastructure: Institutional capital is moving beyond exposure to tokens and toward tokenisation, digital custody and settlement infrastructure.
- Long-term durability matters: Investors ask whether a technology solves a meaningful problem and whether the problem persists if markets cool.
- Hybrid finance is likely: Traditional finance strengths and decentralised tech capabilities may combine rather than compete.
- Capital follows capability: Institutions arrive later but insist on durable technology and practical utility that supports broad adoption.
Table of contents
Institutions are asking different questions
The article notes that the first wave of institutional interest focused on exposure through vehicles like spot Bitcoin and Ethereum ETFs, enabling participation without direct tech engagement. The current conversation, however, is markedly different, centering on tokenisation, digital custody, settlement infrastructure and blockchain technologies that could modernise existing financial systems.
The shift moves the discussion away from questions about whether digital assets deserve a place in portfolios toward how decentralised technologies might improve efficiency and reduce costs. The emphasis is increasingly on durability, commercial viability and whether a technology solves problems that are likely to persist even if market enthusiasm wanes.
This new line of questioning aligns with long-horizon investment habits: institutions probe whether a technology addresses real, enduring needs and whether the product can operate effectively as adoption grows. The focus is thus moving down the technology stack toward the systems that will enable scale and reliability in everyday business operations.
Concrete areas of focus
Truth Ventures explains its portfolio through concrete examples. Bittensor is exploring decentralised approaches to machine intelligence and compute, aiming to widen access to advanced AI capabilities without centralised bottlenecks.
StarkNet is tackling blockchain scalability, working on ways to increase throughput and reduce friction for widespread use of decentralised apps.
Peaq is building decentralised physical infrastructure that connects digital networks with real-world assets, extending tokenised networks into tangible assets.
History Offers Some Important Lessons
A recurring pattern in technology investing is that visible, consumer-facing success can obscure the quiet, foundational work that actually enables a broader economy. Early internet growth saw consumer websites rise in prominence while payment infrastructure, cloud computing and enterprise software quietly became essential to the broader internet economy.
Datta draws a parallel to artificial intelligence, where the headline chatter often focuses on new applications, but substantial value comes from chips, compute infrastructure and software environments that enable AI at scale.
He suggests Web3 may follow a similar path, with the foundational problems—scalability, privacy, interoperability, liquidity and decentralised compute—becoming more important as adoption expands. Those behind the scenes efforts may not grab headlines, but they build the durable base on which future applications will rely.
What this implies for investors
Long-term value, not daily market sentiment, tends to drive durable investment theses. The people who invest in infrastructure layers are betting on systems that developers and businesses will depend on as Web3 technologies scale.
Datta argues that the most influential companies may be those solving these underlying challenges rather than those delivering the latest consumer feature. The pattern recalls past tech cycles where foundational technologies outlived trend-driven hype.
Why infrastructure has always been our focus
Truth Ventures frames Web3 as an evolving technology ecosystem rather than a collection of token projects. This perspective shapes how it evaluates opportunities: does the technology solve a meaningful problem, will that problem endure as markets wax and wane, and can the product improve operations for developers, businesses or institutions?
The portfolio is presented as evidence: Bittensor, StarkNet, peaq, Ternoa and 1inch. Each company operates in a different slice of the Web3 stack, yet all share a common aim to address infrastructure-level needs—whether it is decentralised compute, scalable networks, private data management or efficient liquidity.
The implication is clear: as adoption grows, the demand for robust infrastructure will surpass the lure of headline-driven projects. Long-term value will hinge on solutions that improve the way people build, connect and transact within the Web3 ecosystem.
A portfolio logic grounded in utility
The firms cited—Bittensor, StarkNet, peaq, Ternoa, 1inch—are presented not as flashy products but as pieces of a broader, durable foundation. Each seeks to solve a core barrier to adoption, whether in computation, scalability, data privacy or liquidity.
This approach reflects a conviction that enduring value comes from solve-it-now technology that scales, rather than from speculative narratives that may fade with market cycles.
A hybrid financial system feels far more likely
Datta rejects a binary future where traditional finance and decentralised finance exist in opposition. Traditional institutions bring regulatory expertise, global relationships and operational resilience, and decentralised technologies offer transparency, settlement improvements, asset ownership clarity and new modes of collaboration.
The most promising outcome, he argues, is a synthesis in which both systems reinforce each other. Tokenised assets, modern settlement infrastructure and growing institutional engagement with blockchain technologies illustrate this convergence in real time, with regulatory frameworks maturing as adoption becomes easier.
The idea is that the greatest value may come from what enables traditional finance and decentralised technologies to work together, rather than from trying to replace one with the other. This convergence, if it continues, could broaden the range of use cases that attract institutional capital.
What to watch next
Early examples of convergence—tokenised assets and modern settlement infrastructures—will be milestones to monitor as regulatory clarity increases. As the rules evolve, the compatibility between old systems and new technologies will determine the speed and scope of adoption.
The ongoing evolution will also hinge on the ability of infrastructure providers to deliver reliability and interoperability across diverse platforms and jurisdictions.
Capital is beginning to follow capability
The author notes that speculative capital tends to move quickly, but institutional capital arrives later with more rigorous scrutiny. Investors seek durable technology, practical utility and the potential for adoption over many years, not just the next market cycle.
Datta argues that this is the story unfolding across Web3 today: cycles of optimism and volatility will continue, and Bitcoin will remain a headline fixture. Yet what feels different now is where serious long-term attention is settling—the infrastructure that underpins tokenisation, data privacy and decentralised compute.
Those who build and support the foundations of Web3 may not dominate the headlines, but they are creating the durable value on which future applications will rely.
Long view and practical implications
Investors are increasingly looking for the kind of durable, enterprise-grade foundations that can scale with broad adoption. The emphasis on infrastructure suggests that the next phase of Web3 growth will hinge on reliability, interoperability and efficient liquidity rather than on flashy consumer products alone.
As regulatory frameworks mature and implementation becomes easier, Datta predicts that these relationships between traditional finance and decentralised technologies will deepen, not diminish, over the coming years.
Outlook
The case for
- Infrastructure-first Web3 adoption could accelerate as tokenisation and settlement tech mature.
- A hybrid finance model may unlock new efficiency gains by combining traditional regulatory expertise with decentralised technology.
- Institutional engagement with blockchain tech is likely to deepen as durable, scalable solutions prove practical.
The case against
- Regulatory frameworks must continue to mature; any delay or ambiguity could slow adoption.
- If foundational technologies fail to achieve scale or interoperability, capital may retrace to headline-driven narratives.
- Market cycles and volatility could still misalign short-term incentives with long-term infrastructure buildout.
What to be careful about
- Durability risk: investors ask whether the technology solves a meaningful problem and whether that problem exists if markets decline.
- Regulatory risk: adoption depends on regulatory frameworks maturing; delays could slow convergence between traditional finance and decentralised tech.
- Implementation risk: convergence relies on tokenised assets and modern settlement infrastructure being widely adopted across institutions.
- Timeline risk: the shift toward infrastructure may require longer timelines than headline-driven cycles, testing patience and capital allocation.
Nothing here is financial advice. Anyone putting money in should do their own checks.
Frequently asked questions
What shift does Datta identify in institutional capital?
Datta says institutions are moving from chasing headlines to funding the infrastructure that enables Web3 to scale. They are focusing on tokenisation, digital custody and settlement infrastructure rather than just asset exposure.
Which companies does Truth Ventures cite as infrastructure-focused examples?
The article highlights Bittensor, StarkNet, peaq, Ternoa and 1inch as exemplars addressing decentralised compute, blockchain scalability, decentralised physical infrastructure, privacy and secure data management, and fragmented liquidity respectively.
Why might a hybrid financial system emerge according to the piece?
Datta argues that traditional finance strengths and decentralised technologies can complement each other. The convergence could be driven by tokenised assets, improved settlement, and growing institutional engagement as regulatory frameworks mature.
What risks does the article highlight for readers considering Web3 infrastructure?
Key risks include durability risk (whether problems persist as markets shift), regulatory risk (maturity of frameworks), implementation risk (wide adoption of tokenised assets and settlement tech), and timeline risk (infrastructure buildout may take longer than market cycles).
