Web2 → Web3 Migration Guide for Fintech: The First 90 Days
Introduction
Over the past decade, fintech has thrived on APIs, mobile-first design, and cloud-native infrastructure. Products like Stripe, Plaid, Wise, and Nubank set real-time transactions, global reach, and regulatory reliability as the standard. Yet financial services are now colliding with a new wave of infrastructure in blockchains and web3 protocols that promise programmability, transparency, and new forms of liquidity.
Why should a fintech company care? Because customer expectations are shifting toward assets and services that live on-chain. Tokenized deposits, loyalty tokens, digital bonds, stablecoins, even real estate shares, all of these are moving from slide decks into regulated pilots. Citigroup projected tokenized assets could reach $5 trillion by 2030, while RWA.xyz tracks over $26.5B tokenized RWAs live on public chains as of mid-2025.
Migrating to web3, however, is not just another cloud migration. The primitives are different: transactions are irreversible, security is cryptographic not procedural, and compliance must be encoded directly into contracts. Missteps can lead to losses of funds or violations of regulation.
This guide is for VP Engineering, solution architects, and product leaders at fintech and enterprise firms, as it lays out the first 90 days of a migration journey: where to start, which decisions matter, and how to de-risk the path. Even if you don’t plan to build everything on-chain, these practices will help you move from curiosity to concrete results.
Phase 1 (Weeks 0–1): Boundaries and Constraints
The most common mistake fintech teams make is to “lift and shift” their entire web2 stack onto web3. This is almost always a recipe for delays, blown budgets, and rewrites.
Instead, start with boundaries: define exactly what you are migrating and why.
Define the Domain Boundary
Ask: Which part of our system benefits most from being on-chain? Examples:
Tokenization only: Issue digital tokens representing loyalty points, deposits, or regulated assets. Keep accounting and user interfaces in web2.
Settlement layer only: Move the clearing and settlement of transactions to a blockchain, while order management, customer profiles, and reconciliation remain in web2.
End-to-end migration: Rare, but can make sense for businesses that are entirely crypto-native (like exchanges).
Most fintech firms start with the first two options. Issuing tokens or migrating settlement logic provides immediate wins (transparency, interoperability, and composability) without risking the whole stack.
Establish Constraints
Once you know what to migrate, clarify the boundaries in terms of performance and compliance:
Latency budget: If your users expect payment confirmations in 5 seconds, your migration must respect that. Blockchains like Ethereum mainnet may not meet this requirement without rollups or L2s.
Throughput target: Estimate peak transactions per second (TPS). Can your chain and smart contract handle bursts of traffic, such as payroll batches?
Cost ceiling: Define an acceptable transaction cost per operation. For example, <$0.10 per settlement might be your baseline.
Compliance overlay: Map existing obligations (AML, KYC, SOX, PCI DSS) onto your new design. If auditors need records for 7 years, decide what goes on-chain vs. in your secure archives.
Example: A neobank decides to tokenize loyalty points. Constraint: settle within 3s, peak 500 TPS, <$0.05 per redemption, and keep KYC references off-chain but provable with cryptographic hashes.
This upfront scoping prevents months of wasted effort chasing a “full migration” that doesn’t align with business priorities.
Phase 2 (Weeks 2–3): Security and Key Management
Once boundaries are set, the next step is who holds the keys. In web2, passwords or API tokens can be reset. In web3, private keys = control of funds. If lost or misused, funds are gone.
Custodial vs. Non-Custodial
Custodial model: The company manages customer keys through secure storage (e.g., HSMs, AWS KMS). Advantages: better UX, easier recovery. Disadvantage: higher regulatory burden, single point of failure.
Non-custodial model: Each customer holds their keys via a wallet. Advantage: decentralization and security. Disadvantage: customers bear responsibility; UX can suffer.
Fintechs often start custodial to meet user expectations, then experiment with non-custodial for advanced users.
Multi-Party Controls
To avoid “one person controls all,” implement:
Multisig wallets (e.g., 2-of-3): Require multiple signers.
Threshold cryptography: Split keys across parties without revealing them.
Social recovery: For users, allow friends or trusted devices to recover accounts.
Recovery and Rotation
Every key strategy must include:
Rotation drills: Practice rotating signing keys without downtime.
Recovery runbooks: Document how to respond to key loss or compromise.
Monitoring: Track access attempts, signers, and suspicious behaviors.
Without these, a fintech migration can be derailed by a single mishandled key.
Phase 3 (Weeks 4–5): Compliance, Data, and Auditability
Traditional fintechs live under regulatory microscopes. Migrating to web3 intensifies expectations.
On-Chain vs Off-Chain Data
On-chain: Settlement IDs, token transfers, and events visible to anyone. Strong immutability, weak privacy.
Off-chain: KYC documents, customer details, AML scores. Safer to keep private, but must be provably linked.
Audit Log Anchoring
Auditors and regulators care about evidence. Use cryptographic hashes or Merkle roots to anchor off-chain logs to on-chain events. Example: “Transaction ID X has AML score hash H123” stored in the blockchain. Auditors can later confirm the record matches.
Data Retention
On-chain data is permanent, but off-chain data must follow existing laws (7 years for financial records in many jurisdictions). Ensure your data model accommodates this.
Regulator Transparency
Plan how to expose data:
Dashboards linking on-chain events to off-chain evidence.
On-demand export of proofs for regulators.
APIs for automated regulator queries.
The earlier you design these, the fewer compliance surprises later.
Phase 4 (Weeks 6–8): Rollout Patterns
By now, you’re building contracts and integrations. The big risk? Shipping directly to users without a safety net. That’s why rollout design matters.
Feature Flags
Wrap new web3 paths in toggles:
Start with flags off.
Test in staging and shadow environments.
Turn on for specific cohorts (e.g., employees).
Flags allow instant rollback if things break.
Dual-Write
For critical workflows, write to both old (web2) and new (web3) systems. Compare results. If they diverge, trust the old system until fixed.
This provides confidence through reconciliation before committing fully.
Shadow Traffic
Route real traffic into the web3 system, but don’t expose results to users. Analyze performance, costs, and error rates.
Cohort Rollout
Migrate in stages: internal testers → small % of real users → high-value customers. Each step should only proceed after metrics stabilize.
Phase 5 (Weeks 9–10): Avoid Anti-Patterns
At this stage, many teams fall into common traps:
“Lift everything”: Rewriting the whole stack on-chain. Usually ends in delays or rewrites.
Over-customizing libraries: Reinventing wheels when audited standards exist. Leads to audit nightmares.
Ignoring chain congestion: If fees spike, user flows halt. Without fallback, customers are stuck.
“Blockchain = audit trail”: Vague claims won’t satisfy regulators. You need linked proofs and reports.
Synthetic-only testing: Skipping real-world data leads to surprises under peak loads.
Each anti-pattern costs months to fix later. Proactively design against them.
Phase 6 (Weeks 11–12): Test, Validate, and Prepare for Audit
As 90 days close, the goal isn’t “feature complete.” It’s migration readiness.
Rollback Rehearsals
Simulate:
A failed key rotation.
A blockchain outage.
Transaction fee spikes.
Confirm your flags and dual-writes work.
Latency Testing
Instead of just measuring averages, watch the tails. Users experience the worst 5% (p95/p99 latencies). A system with average 2s latency but 10s spikes is unacceptable.
Google engineers call this “the tail at scale”. Apply that mindset to web3 migrations.
Audit Package
Prepare a binder of:
Scope and boundary documents.
Logs from web2 + web3 reconciliation.
Rollback runbooks.
Compliance mappings.
When regulators or execs ask “are we ready?”, you’ll have evidence.
Migration Checklist
Your team can use this step-by-step checklist (downloadable PDF). Key items:
✅ Domain Boundary Defined
What to do: Write down exactly what part of your system will migrate: tokenization, settlement, or something else. Keep it narrow.
Why it matters: Teams fail when they try to “lift and shift” everything. A clear domain boundary prevents scope creep, aligns engineers and compliance, and makes audits manageable. Example: “We are migrating only settlement logic, not KYC flows.”
✅ Constraints Documented (Latency, Cost, Compliance)
What to do: Define measurable performance and compliance constraints. E.g., “≤ 5s settlement confirmation, <$0.10 gas/transaction, AML logs retained for 7 years.”
Why it matters: Without constraints, engineers can’t choose the right chain, scaling pattern, or design trade-offs. Constraints anchor technical decisions in business realities.
✅ Key Management Chosen (Custodial vs. Non-Custodial)
What to do: Decide if your company holds user keys (custodial) or if users manage them (non-custodial). Document the rationale.
Why it matters: Keys = control of funds. Custodial gives you UX and compliance control, but centralizes risk. Non-custodial gives decentralization but increases user support burden. If you don’t settle this early, every downstream workflow will stall.
✅ Rotation and Recovery Drills Complete
What to do: Practice rotating signing keys in staging and simulate a lost/compromised key. Document who does what in an emergency.
Why it matters: Key compromise or loss is the most common catastrophic failure. Having a rotation/recovery plan is like fire drills: boring until you need it, then life-saving.
✅ Compliance Anchors Mapped to On-Chain Events
What to do: Decide which compliance proofs (AML checks, KYC approvals, audit signatures) are represented on-chain (hashes, Merkle roots) vs. stored off-chain. Build mappings between them.
Why it matters: Regulators won’t accept “it’s on the blockchain” as proof. They want to trace specific compliance data to specific transactions. Anchoring solves this.
✅ Feature Flags in Place
What to do: Wrap every new on-chain function in a toggle you can turn off instantly (mint, transfer, reconciliation). Deploy flags to staging first.
Why it matters: Rollouts without flags are risky. If a bug or fee spike occurs, you’ll need to disable features without a redeploy. Flags are your insurance policy.
✅ Dual-Write Reconciliation Tested
What to do: Implement “dual writes” during migration; log events in both web2 and web3 systems. Build dashboards that compare the two.
Why it matters: Reconciliation lets you catch mismatches before users are exposed. Without it, you won’t know if web3 is dropping events or mis-logging settlements.
✅ Shadow Traffic Monitored
What to do: Route real traffic into web3 logic silently (no user impact). Collect metrics like latency, gas use, and mismatch rates.
Why it matters: Synthetic tests miss real-world quirks like bursts, user retries, or unusual transaction sizes. Shadow traffic shows how web3 behaves under your live workload.
✅ Rollback Rehearsals Passed
What to do: Simulate failure scenarios: gas spikes, chain outages, key compromise. Practice rolling users back to web2 systems.
Why it matters: A rollback drill is the difference between a controlled incident and a public fiasco. You only discover rollback gaps when you practice them.
✅ Latency/p95 Tests Conducted with Real Traffic
What to do: Test with real or replayed user traffic, measuring tail latency (p95/p99). Document thresholds.
Why it matters: Averages lie. Users notice the slowest 5%. Google’s “Tail at Scale” research shows this is where satisfaction drops and SLAs are broken.
✅ Audit Package Assembled
What to do: Prepare a binder (digital or physical) with boundary definitions, compliance mappings, logs, rollback plans, and test results.
Why it matters: When executives or regulators ask “are we ready?”, you need evidence. The audit package shows readiness and builds trust.
De-risking Your First 90 Days
Sometimes people think a web2 → web3 migration is little more than a rewrite, but it’s actually an augmentation. The smartest teams start narrow, constrain by business goals, and test with rollback paths.
The real payoff? You don’t just port code. You earn:
Programmable assets and settlements.
Interoperability with DeFi ecosystems.
Stronger audit trails for regulators.
Future-proof infrastructure for tokenized finance.
Your first 90 days won’t complete a migration, but they’ll ensure every step forward is safe, compliant, and value-aligned.
Next step: Download the migration checklist and run a kickoff workshop with your engineering and compliance teams.
Conclusion
The first 90 days of a web2 → web3 migration are about clarity: defining scope, securing keys, anchoring compliance, and building safe rollout patterns. Done right, these steps transform a risky leap into a structured process that any fintech team can navigate.
Take Visa, which began piloting stablecoin settlement on Ethereum and Solana in 2023. Instead of rewriting their entire network, they scoped narrowly: cross-border settlement in USDC for a handful of partners. They defined clear latency and compliance requirements, kept user-facing interfaces in web2, and rolled out in carefully staged pilots. The result? Real-world transactions settled on-chain at lower cost, with regulators satisfied because compliance anchors remained intact.
The lesson is clear: migration is a series of disciplined, testable moves. The fintechs that succeed in the next five years won’t be those that rushed everything on-chain, they’ll be the ones who started with defined boundaries, practiced rollbacks, measured tail latency, and built credibility with regulators and users alike.
Your first 90 days set the tone. Treat them as your foundation, not your finish line. The companies that do will be positioned not just to adopt web3, but to shape the next generation of financial infrastructure.
