Dispersion Capital Starts $40 Million Fund for Web3 Infrastructure

A West Coast venture capital firm has announced a new fund to support Web3 infrastructure. Its founder and managing partner believes strongly that the industry needs to improve on a number of fronts. Namely, pressing security issues and a serious lack of developers committed to building sustainable infrastructure. Can well-meaning sponsors address these chronic issues?

Dispersion Capital’s Initiative

Dispersion Capital, a backer of early-stage ventures based in San Francisco, has launched a $40 million fund to support foundational Web3 infrastructure. The firm has already invested in 20 companies, many of which have received subsequent funding since Dispersion’s initial investment. The fund said it seeks a ChatGPT-like “transformative moment” for blockchain.

Dispersion Capital’s fund has gained support from both the Web2 and Web3 worlds. Including Ripple, Faction Lightspeed, Wemade, Circle Ventures, Alchemy Ventures, Hashkey, Cherubic Ventures, Forte, and NG.

Better Web3 Infrastucture

In a discussion with BeInCrypto, Patrick Chang, Dispersion’s Managing Partner and co-founder, said he anticipates “a consolidation of chains and networks in the future, resulting in a select few that excel in key areas such as security, scalability, specialization, and interoperability.”

Chang used Flow (FLOW) as an example. A gaming-focused blockchain known for its speed, throughput, and low fees. While praised for its performance, some worry about its centralization and limited security compared to decentralized platforms like Ethereum.

“The existence of multiple chains also cultivates diverse ecosystems, reducing the risk of regulatory shutdowns,” he continued.

The current problem with decentralized infrastructure is that people are “building in a vacuum, hoping developers will come,” Chang argued.

Diversion’s founder also highlighted the lack of robust security solutions, interoperability, and the need to make blockchains faster and cheaper. 

Dispersion Is Bullish on Gaming

For all the issues, Diversion’s founder is bullish on Web3 infrastructure for gaming. “In our mind, gamers and the gaming industry will drive the short-term mass adoption of Web3,” explained Chang.

“Gamers today, and yesterday, already understand collecting digital assets, from your early days collecting coins to today’s kids collecting skins, weapons, and more on Fortnite and other [platforms],” Chang added.

“However, these games had assets that were locked into games and had zero value. Blockchain can bring real-world economic factors into games, allowing gamers to experience the real-world inside a digital world.”