I'd take .io over .xyz any day.
I check probably around 1000 websites daily for the names I am buying to see the real use cases and gauge a name's value (not to target anyone specifically, as from my experience current users are rarely the buyers, but just as a predictor that someone else might want the name in the future).
And if I see .io as taken, I pretty much can assume that it is developed (50%+), while if .xyz is taken it is pretty much 99%+ that is either a spammy site or someone who speculatively bought for $1/year.
So much so that I have pretty much even stopped checking those.
Few web3 developers while make an impressive case for reporting, are nothing in the global picture.
And, if anyone noticed, a big chunk of 4-5 figure sales reports for .xyz comes from one investor. While I am sure those are all genuine sales, it might just mean that she is well networked with the web3 communities (chats, discord, whatsapp etc.). I might be wrong of course, and possibly her 20k names are the best of the best of regular price premiums.
Regardless, once the web3 thing is oversaturated, .io will take over as #2 option for tech, unless there is a new contender.