Source: a16z crypto
A16z argues that financial innovation historically moves in single dimensions—spot markets for millennia before derivatives emerged—suggesting the next frontier lies in new asset classes and trading venues rather than incremental improvements to existing ones. This framework justifies crypto's infrastructure play: if blockchain enables trading in previously illiquid or non-tradeable things (carbon credits, real-world assets, fractional ownership of physical goods), the first-mover platforms that standardize these markets capture outsized value. Whoever defines the exchange rules and settlement layers for assets that can't be traded today owns the rails that all future participants must use.