May 29, 2024

3 significant banking challenges for Web3 Founders

Web3 founders have struggled with several banking challenges over the years.

Web3 founders are in both a privileged and a difficult position. While the market is booming with hype for decentralized solutions to solve current problems, traditional institutions have a hard time accommodating an organizational entity without a standard hierarchical structure.

Web3 founders are usually dreamers and idealists. They want to make the world a better place by using decentralized, transparent structures to help turn their visions into reality. However, they face challenges that other founders don’t, especially in banking.

It is a well-known statistic that 9 out of 10 startups will fail, and in Web3, that is especially true. The main reason might relate to not having a well-defined product-market fit or a clear business model. Since this is a particularly volatile market, if a team doesn’t move with enough speed and certainty, it might lose momentum and the opportunity for a big breakthrough.

Yet, there are other challenges Web3 founders face while running a startup: not having the right funding, asset management, and banking provider might pose a threatening risk for Web3 organizations, as without assets, they cannot operate.

In this article, we explore three significant banking challenges a new founder can encounter and propose ways to address them.

1. Raising Web3 Capital

Raising funds is always difficult for any startup founder. However, for Web3 entrepreneurs, the challenge becomes especially hard when they have to overcome traditional methods and explore new ways of raising capital.

Web3 Investors:

Some investors are familiar with what a Web3 project entails, but not all of them are. A Web3 startup's specific needs might challenge traditional investors or even investors who specialize in a specific sector. Founders must educate potential partners on the Web3 market and their specific needs.


Web3 regulations are an ever evolving field, with many countries adjusting their laws to accommodate new projects and on-chain products. Founders must stay up to date with new regulations and inform their investors about the frameworks they must put in place to comply.

Token Economics:

Many projects opt to sell their own tokens to raise money from their peers, using models such as Initial Coin Offerings (ICOs) or tokenized asset sales. However, they must guarantee their project's long-term sustainability, considering factors such as token distribution, utility, governance, and tokenomics.

2. Manage their portfolio

A Web3 startup’s portfolio is fundamentally different from that of a traditional company. For Web3 entrepreneurs, the need for liquidity and freedom to move their assets, as well as creating a portfolio as they see fit, is a major concern.


Diversification of assets is essential for managing risk in a volatile market such as Web3. Founders often choose tokenized assets such as treasury bonds, which are low-risk, to maximize their investments. Despite that, many opt for higher-risk strategies, like crypto trading and swapping. Web3 entrepreneurs must conduct thorough research, stay informed about market trends, and develop a plan to lower risk.

Volatility and risk management

As the market evolves, it becomes increasingly unpredictable. Although regulation and compliance are marching toward a more transparent future, with laws in place to manage a highly unregulated and prone to scams market, Web3 founders still don’t know how a new rule might affect their operations and portfolio management. Moving forward, founders must implement robust risk management strategies to protect their investments and minimize potential losses.

3. Finding the best banking solution

Traditional banks are failing to meet the needs of new businesses, mainly in the blockchain sector. As Web3 founders look for decentralized solutions to accommodate their needs, more DeFi banking solutions are arising to respond to the challenges.


As more Web3 entrepreneurs choose alternative solutions to traditional banking, one primary concern is how DeFi platforms comply with the regulations in place. Web3 founders want to oblige and ensure their businesses are safely compliant with all laws in their jurisdictions. When opting for a banking solution, they must consider how this entity is responding to strict regulatory requirements, including anti-money laundering (AML) and know-your-customer (KYC) guidelines. Founders need to ensure compliance in their geographies and work with banking partners that understand the unique regulatory challenges of the Web3 industry.

Cards, loans, and transactions

Many traditional banks have yet to be able to adapt to the needs of Web3 startups, namely providing crypto-friendly cards and Web3 loans and facilitating transactions between accounts, especially with crypto-to-fiat and crypto-to-crypto payments. Also, when accepting Web3 startups, the traditional banking system often imposes substantial fees for currency conversions, cross-border transactions, and handling digital assets, which can severely impact the operational efficiency and profitability of Web3. When looking for a solution that covers all their Web3 business necessities, founders must certify that on and off-ramping is easy, payments are made simple, transactions are smooth and quick, account reconciliation is pretty straightforward, and loans are made possible for a reasonable amount. 

Connecting TradFi with DeFi

Although many new DeFi solutions are growing, many Web3 suppliers, employees, and clients still prefer using a traditional banking institution. Interoperability is critical to a successful Web3 business, ensuring all payments are processed and operations run smoothly. Founders must ensure their banking solution is compatible with more traditional systems and undoubtedly addresses the business’ daily concerns.

Managing a Web3 startup is not easy. Having to consider all the aspects above regarding financial operations seems like a daunting task ahead for entrepreneurs, but there are simple solutions to help founders navigate the Web3 economy and banking services.

At Skyline Digital, we are ready to help Web3 businesses, DAOs, and founders reach their potential and fulfill their dreams by guaranteeing a smooth onboarding process and a straightforward approach to payments and transactions. Get in touch with us to learn more!

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