Entrepreneur's Statement: From Start to Giving Up, Why I No Longer Do Web3 Payments

Over the past six months, I have transitioned from an observer in Web3 to someone inside the payments industry. And now, I have decided to stop and no longer continue with Web3 payments.

This is not a retreat after failure, but a strategic adjustment made after truly stepping into the field. During this time, I have been to Yiwu, Shui Bei, Putian, and even Mexico, observing the most bustling areas reported in various reports to understand how payments are actually made. I also got involved firsthand, built an MVP for Web3 payments, took over accounts, developed Web3 payment tools, and tried to run the imagined process from start to finish.

But the deeper I went, the clearer one thing became: this is not an industry where “making a good product equals winning.” Payments are not about functionality alone; they depend on banking relationships, licenses, capital efficiency, and long-term risk management capabilities.

Many seemingly “profitable” payment businesses are not fundamentally earning through capability premiums but through risk premiums—just waiting for things to go wrong. What truly determines how far a payment company can go is never how much money it makes, but whether it can withstand risks when they become explicit and whether it can survive.

This article is not meant to dismiss the industry but to remove the filters, lay out the real structure, and leave future entrants with a clearer judgment. (A few weeks ago, I also recorded a podcast with former Kun Global VP Robert, Nayuta Capital CEO, and former Didi Financial CEO Alex, discussing similar issues.)

1. Why did I step into Web3 payments?

As a serial entrepreneur, I ended a long-term startup project last year. During the closure, I also took some time to rest and reflect, returning to a more “cleared” position to seriously consider where to focus my efforts next.

Six months ago, a friend invited me to Hong Kong to explore Web3 payment-related startups. At that time, I was not very familiar with Web3 itself, nor did I have much understanding of the payments industry. From a macro perspective, it was clear that this was a large and still growing industry, with potential for integration with AI.

In previous ventures, we had handled cross-border business and platforms/software related to remote work. In these practices, I kept encountering the same fact: businesses can quickly go global, but capital flows always lag behind. Slow settlements, fragmented pathways, opaque costs, uncontrollable billing cycles—these issues might be manageable with experience and patience when small-scale; but as the business scales, they are not solved by “management ability,” only amplified. Money cannot flow freely like information; this itself is an invisible ceiling for many globalized businesses.

Against this backdrop, when I began to systematically understand how Web3 payments are used in clearing and settlement, I saw not an abstract technical narrative but a solution that directly addresses these pain points: faster settlement, higher transparency, and almost 24/7 clearing capabilities.

At that time, it seemed to me that this was a direction that could solve real problems and be Day 1 Global—not because of Web3 itself, but because it offered a better structure for this specific scenario. At least logically, it seemed capable of addressing long-standing frictions that had been ignored.

But looking back now, I gradually realized that, like many others, I had implicitly assumed a premise that reality would challenge later: as long as the clearing and settlement efficiency was high enough, payments would naturally migrate onto the chain. It was further simplified into an intuition—payments are just matching transactions; as long as the process runs smoothly, one could “handcraft” cash flow.

Due to my limited understanding of Web3 and the payments industry, I initially decided to spend three months truly immersing myself in this industry, understanding its structure thoroughly, and then deciding what to do and where to position myself.

2. Payments have never been about products

When I arrived in Hong Kong, my initial plan was simple. The idea was straightforward: leverage existing resources and relationships, start with OTC or relatively simple payment scenarios, get cash flow running, and then determine the next steps based on real needs.

**I wasn’t there to do research or to observe long-term; I just wanted to see—is it possible to first build a working solution, then calibrate the direction in real business?

But soon, the external environment accelerated noticeably. In May, the US passed the GENIUS Act, and the entire industry was ignited almost overnight. Capital, projects, entrepreneurs flooded in, and Web3 payments shifted from a niche infrastructure topic to a frequently discussed “new opportunity.” From an external perspective, this was positive; but for a startup just entering the scene, this sudden buzz was not necessarily a good thing.

The more chaotic, noisy, and consensus-driven the moment, the easier it is to obscure the real issues. Large internet companies, financial institutions, banks, traditional Web2 payment firms, and Web3 native teams all entered, talking about opportunities, but few discussed the structure. I felt it was even more necessary to go deep into the front lines and truly understand this industry.

1. The “buzz” in reports is not the same as what’s seen on the ground

Once I started working on the front lines, my first step was not to optimize product solutions but to ask: who is actually using Web3 payments? Why? Where? I first visited Yiwu, which is frequently mentioned in reports.

In many studies and reports, Yiwu is often cited as a “scaled application” of Web3 payments. But after going there, I saw a different picture. Stablecoins do exist, but more often they are scattered, relationship-driven, and used behind the scenes.

They have not become a standardized, productized settlement method as described in reports. Many transactions are not driven by “maximum efficiency.” I then visited Shui Bei, Putian, and Mexico, and also looked into penetration in Africa, Argentina, and other regions. The situation was not fundamentally different.

Web3 payments are not nonexistent, but they have not yet formed a stable, scalable main pathway. More often, they are just “patches” embedded within existing systems. The actual penetration rate does not match the hype we perceive in reports, communities, and discussions.

But it was through these exchanges that I gradually shifted my perspective from “whether a product can be built” to the industry structure itself. I began to realize that the incremental market for stablecoins is likely not within “crypto circles,” but in existing Web2 business scenarios that have been long slowed down by traditional clearing and settlement systems.

This is not a narrative shift but a slow upgrade of financial technology. Meanwhile, problems began to surface: if real usage is so fragmented, can a productization path even stand?

2. When we start building applications, all issues point to one place: channels

From July to September, I continued field research and began systematically engaging potential clients. HR companies, insurance, tourism, MCN agencies, trade services, cross-border businesses, gaming companies… needs varied, but the core issue was highly consistent: money should flow faster, cheaper, and more stably.

Payroll, task settlement, B2B payments—these scenarios are logically well-suited for stablecoins. Initially, we thought the application layer was a viable entry point. But soon, an unavoidable premise emerged: you must have a stable, compliant, sustainable fiat ⇄ digital currency channel.

We started connecting with several service providers that looked promising, but real experience showed that none of these channels were “long-term reliable.” To meet business needs, we even tried to build our own channels, but once we got into it, we realized: this is not a product issue but an infrastructure issue.

Bank relationships, licensing structures, KYB/KYC compliance, risk control, quota management, regulatory communication… the entire channel layer relies heavily on long-term trust, experience, and capital—capabilities that a small team with an internet background cannot quickly assemble.

It was here that I first truly realized: payments are not just a “product that can be made good to win.”

3. You think you’re making money, but actually you’re eating risk premiums

One phrase struck me deeply during this process: payments are not about how much you earn, but how much you can spend. Many “working” Web3 payment paths are not fundamentally capability premiums but risk premiums.

The more dangerous part is: many people don’t even realize what risks they are bearing or where those risks are hidden.

• Is it the compliance of trading partners?
• Is it the mismatch in fund pool structures?
• Is it lagging risk control rules?
• Or the gray area in regulatory interpretation?

If a business’s feasibility is based on “nothing went wrong so far,” then it is not a structure that can be safely scaled.

4. The essence of payments is a “water flow” business.

Gradually, I began to understand payments from a simpler perspective. Payments are essentially a “water flow” business. Whoever controls the water channels can make money; the larger the water flow from the tap, the greater the profit space. Water passing by your door, and you take a cut—that sounds like an almost “lucky” business.

But precisely because of this, payments are never a simple business. Not all companies “by the water” can make money. Truly long-term profitable payment companies are those that have extremely strong control over water volume, pressure, backflow, pollution, and leaks.

How much water you can handle depends on how much risk you can bear; how long the water flows depends on your tolerance within compliance, risk control, and regulatory environments. Many paths that seem to have “huge water flow” are essentially just temporarily unblocked. It’s through this process that I developed a more complex, but also more genuine, respect for the payments industry.

Its charm does not lie in who creates a new product, but in—it honestly reveals where in the real world industries are truly profitable and where they are just loud. Standing on the water channels, you see where the real funds are flowing, not who is PR-ing outside.

5. Payments are good business, but not necessarily the business we can do well

At this point, I have to face an important judgment for entrepreneurs. Payments are a good business, but it is not the kind of business we can do best. This is not a negation of the direction but a respect for the resource endowment.

What the payments industry truly needs is not rapid trial-and-error, iterative product development, but long-term stable banking relationships, sustainable compliance systems, mature risk control, and the trust built through repeated battles within the regulatory environment. These capabilities are not something you can “try hard and get,” nor can they be quickly assembled through cleverness or effort. They are more like industry-level assets that tend to form gradually within specific teams and timeframes.

Once I started viewing payments as a “water flow business,” I also became clearer that whether a team can sustain long-term on the water channels depends not on desire but on whether they have the resilient infrastructure.

Under this premise, continuing to push forward is no longer a rational investment but more like using time and luck to contend with an industry structure that does not favor us. This ultimately led me to the next decision.

四、After deciding not to continue with payments

When I truly decided to stop Web3 payments, I did not feel a strong sense of “ending.” It was more like a phase of exploration finally reaching a point where it was time to pause. I have not left the industry; I simply shifted from trying to stand on the water channels to observe how the water flows, where it ultimately goes.

Through repeatedly dissecting the payment structure, one judgment became increasingly clear: payments solve the issue of flow—whether money can move and how fast; but what truly determines long-term value is not the flow itself, but where the money stops after flowing, and how it is managed.

Looking back at the development path of China’s fintech over the past twenty years, this logic is very clear. Payments are just the entry point; balances are transit stations; the real scale and barriers are formed by the subsequent fund management and asset allocation systems. Yu’ebao, Tiantian Fund, Tianhong—these are not because “payments are better,” but because they sit behind payments, receiving and reorganizing the already scaled fund flows.

Payments are the gateway, not the destination. When applying this structure to the Web3 world, I see similar issues gradually emerging. There are already many stable, not overly aggressive, on-chain asset forms—lending, short-term RWA, neutral strategies, diversified products… They resemble on-chain money market funds, short-term debt funds, and stable allocation tools. The real issue is not “whether there are assets,” but that most people do not understand what risks they are facing, nor do they have an entry point to understand, compare, and judge these assets.

As more funds flow on-chain, this problem will only become more prominent. At this point, I realize that if I do not continue with payments, I can still stay involved in this transformation in another way. Not by fighting over the water channels, but by clarifying the structure of the water flow, exposing the boundaries and risks, and letting people know where to pause and where to be extra cautious. This will be the direction I and my team will continue to explore.

This article is not meant to conclude Web3 payments nor to advise anyone to enter or exit; it is simply an attempt to explain why I chose to stop payments. I hope it can serve as a reference for future entrants and perhaps help avoid some detours.