The crypto markets are down dampening the industry, but that’s not stopping venture firm Variant, which announced Thursday that it has raised $450 million across two funds targeting Web3 and decentralized finance startups.

Variant is an early-stage crypto-focused investment fund founded by Andreessen Horowitz veterans that has backed well-known Web3 and crypto projects including the decentralized crypto exchange Uniswap, decentralized nonfungible token marketplace Magic Eden and Ethereum scaling project Polygon, among others.

The money is part of Variant Fund III, which is intended to “invest in the builders of the user-owned web,” Variant partners Li Jin, Spencer Noon and Jesse Walden wrote in the announcement.

The fund is being split into two portions: a $150 million seed fund designed to help startups and the remaining $300 million for an opportunity fund for projects within Variant’s own portfolio that have demonstrated their value.

“What we have learned over the last few years has reinforced our thesis that user-owned networks grow bigger and faster than their traditional centralized counterparts, with more favorable economic terms for users,” the partners wrote. “Beyond that, it has also shown that ownership is a vast design space, with different experiences ranging from participation in a community to financial exposure to governance.”

The fund will specifically target DeFi projects, blockchain computing, consumer-oriented Web3 projects and new forms of ownership such as nonfungible tokens.

Web3 is the moniker computer experts gave to the next evolution of the World Wide Web, also known as the decentralized web, which allows for financial transactions to be done peer-to-peer via blockchain technology. These transactions are governed by smart contracts that execute trades without the need for middlemen or centralized institutions, thus allowing developers to create software that allows communities to control their own resources.

This is the fundamental philosophy behind DeFi, or decentralized finance, which uses blockchain technology to create crypto-token economies. These economies have been used to reproduce decentralized versions of traditional finance including securities trading exchanges, interest generation, lending and more, all using crypto assets.

Web3 has also led to allowing the virtual ownership of digital assets through nonfungible tokens, which Jin told Fortune Variant is also focused on. Although most NFTs have been digital collectibles and artwork, they can also represent items in video games, music, video, documents, concert tickets and other virtual consumer items.

“Web2 was digital feudalism, and Web3 is digital capitalism,” she said. “Web3 is a paradigm shift, in that it introduces capitalism to the internet. It introduces the ability for people to actually own capital and become capital owners of their own output.”

By using NFTs, it’s possible to give users an incentive by providing them ownership of assets within an ecosystem, such as game items, collectibles or their very avatars within virtual worlds. Token models can also be used as part of loyalty systems that can allow users to trade them not just for goods on a platform but to exchange them on external markets for money, making the tokens valuable to earn. According to Jin, these emerging use cases and more combine social and economic systems in ways not possible in legacy systems.

Variant raised $22.5 million and $110 million in its previous two funds.

The partners said that the small size of the funds is deliberate: That’s intended to allow the firm to remain close with its portfolio companies and guide them. They added that the next three to five years would be critical for the crypto and Web3 industry and what happens now will determine that future.

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