A decade ago, a wave of fintech startups such as Revolut, Nubank, and Robinhood figured out that whoever owns the customer interface for money owns the business. They kept the legacy banking backend and rebuilt the frontend: intuitive mobile apps that let users store, spend, save, borrow and invest from a single screen. The playbook worked and the lesson was clear: in financial services, distribution eats infrastructure.
Today, a similar dynamic is playing out in blockchain but in reverse. Instead of rebuilding the frontend while keeping the old plumbing, a new class of apps is keeping the familiar mobile interface and replacing the backend entirely: stablecoin transfers instead of SEPA, onchain lending protocols instead of bank credit desks, decentralized exchanges instead of broker-dealers. Pantera calls these “permissionless neobanks” in a recent piece worth reading.
The closest analogy from traditional finance is Robinhood. Robinhood offered commission-free trading to attract millions of retail investors, then monetized that flow by routing orders to market makers like Citadel Securities, a practice known as payment for order flow. The insight was that capturing the user relationship at scale mattered more than owning the execution infrastructure.
The same logic now applies to apps like Phantom, which generates hundreds of millions in annualized revenue by routing retail transactions through open protocols it didn’t build. It added perpetual futures, stablecoin payments, tokenized equities, and prediction markets within months, at zero marginal cost. On traditional financial rails, that kind of product expansion takes years and millions in licensing. This is the power of composability.
For allocators, the structural question is where value ultimately accrues. The “fat app” thesis argues that whoever owns the user relationship captures most of the economics. But there’s a credible counter-argument: open protocols like Morpho and Hyperliquid generate revenue precisely because they’re the backends that many frontends need. When Phantom routes a trade through Hyperliquid, both clip fees. The value chain isn’t zero-sum the way traditional finance often is.
This tension echoes similar questions from prior technology cycles that were only settled with decades of hindsight. The competitive race for the financial frontend is only starting.
This Week’s Market
- BGCI Index 0.43%
- Bitcoin 0.49%
- Ethereum 1.29%
- Solana -1.22%
All figures are week-to-date as of today 12:00 CET
Theta Blockchain Ventures Content
- Theta Knowledge Hub (explore all resources)
- Legends4Legends 2025 Conference Recordings (watch here)
Blockchain News
- Danske Bank offers Bitcoin, Ethereum ETPs to investors, ending eight-year crypto ‘ban’ (read more)
- White House session ends in impasse as banks demand restrictive parameters on stablecoin rewards (read more)
- Robinhood launches public testnet for blockchain built on Arbitrum (read more)
- Jump Trading to take small stakes in Polymarket, Kalshi via liquidity deals (read more)
- SEC Chair suggests some prediction markets could fall under agency’s jurisdiction (read more)
- Citadel Securities backs LayerZero as it unveils ‘Zero’ blockchain for global markets (read more)
- UK selects HSBC as platform provider for tokenized government bond pilot (read more)
- Franklin Templeton, Binance roll out program letting institutions use tokenized money funds as trading collateral (read more)
- BlackRock takes first DeFi step, lists its onchain money-market fund BUIDL on decentralized exchange Uniswap (read more)
- Stripe adds x402 integration for USDC agent payments on Base (read more)
Relevant Financial Update
- Aztec*, the leading privacy-first Layer 2 that enables Ethereum developers to create applications that prioritize user privacy and flexible compliance, had its TGE and is now trading at a $230mln FDV
- LayerZero*, a cross-chain interoperability protocol and the creator of new Layer 1 blockchain Zero, has received strategic investments from Tether, Citadel Securities, and Ark Invest
- Uniswap*, the largest decentralized exchange by volume, has received a strategic investment from BlackRock as part of a partnership to enable direct onchain trading of its tokenized money market fund BUIDL
- Inference Research, an AI-native quantitative trading firm operating across digital assets and traditional markets, has raised $20mln in a Seed funding round led by Avenir Group
- Avenia, a Brazilian fintech and issuer of the largest BRL-pegged stablecoin BRLA, has raised $17mln in a Series A funding round led by Quona Capital with investments from Sequoia, Accel, and Headline
- Levl, a stablecoin infrastructure platform enabling fintechs to power cross-border payments, has raised $7mln in a Seed funding round led by Galaxy Ventures with investments from FalconX and CMCC Global
- Birch Hill*, an institutional onchain credit infrastructure provider, has raised $2.5mln in a Pre Seed funding round led by ParaFi Capital and Castle Island Ventures with investments from Nascent and FalconX
*Underlying TBV portfolio position | Prices as per 13/02
Interesting Things to Read
- Chris Dixon from a16z argues that non-financial use cases are not dead (read more)
- Electric Capital’s co-founder Avichal Garg shares the investing frameworks behind backing 25+ unicorns on the When Shift Happens podcast (listen here)