“Uncertainty” is the biggest charm of the encryption industry, and it also makes Web3 very imaginative.
Since Tim Berners-Lee proposed the concept of the World Wide Web in 1989, the Internet industry has gone through two turbulent times, Web1 and Web2. Now, Web3 is coming to us. Standing on the shoulders of Satoshi Nakamoto and other industry pioneers, this brand new technology gives us the ability to achieve complete private ownership of assets through cryptography, unswervingly enforce the constitution and laws through smart contracts, taxation through token issuance, and The open and transparent ledger realizes the formulation and execution of rules, and realizes the integration of finance and culture through DeFi and NFT.
It’s all so beautiful and refreshing.
If the copywriting stops abruptly here, the beginning seems more like a soft article for a project, rather than an objective and fair Web3 popular science article. There is no doubt that Web3 has made significant progress in 2021, and infrastructure from wallets to public chains has received a lot of capital attention. At the beginning of 2022, when we look forward to this field, what kind of “uncertainties will we encounter” “?
Complete decentralization of governance rights is not the optimal solution
One of the core of Web3 is the decentralization that DAO brings, however, people will gradually realize that full decentralization is not the most beneficial.
The full name of DAO is “Decentralized Autonomous Organization”. The open and transparent computer code is the spiritual core of DAO. The transaction records and procedural rules completely protected by blockchain are the soul of DAO. Controlling shareholders is the ultimate appeal of DAO. Under these cores, DAOs have become synonymous with fully autonomous utopias.
But does complete decentralization really make Web3 possible? At least for now, this is not and cannot be the final form of the Web3 world.
In April 2021, a voting event on PancakeSwap, a DeFi platform project on a smart chain, became a negative case of “complete decentralization”. This vote was conducted on a proposal that was initially approved. Developers and community support, but the pause button was finally hit by a whale who cast 94,500 negative votes for the proposal, making him the largest single voter against the proposal, and the final vote against the proposal The proportion reached 65%, becoming the majority party. As a result, a single whale blocked the proposal that the majority hoped would be successful.
After repeated discussions, after the developers “begged hard”, the giant whale gave up the negative vote, and the proposal was passed.
Take Axie Infinity as an example. For this native NFT game, the land and players are the core of the game, and the AXS token is just a means for the game to run normally. The idea of complete decentralization leads to AXS Token holders become an important force in deciding the development direction of the game, and the means become the ultimate goal.When speculators become the decision makers of this game by holding AXS tokens, it will inevitably lead to an extremely slow game development process, which is undoubtedly fatal for games where playability dominates, and it is also the reason why the price of AXS tokens has been in the near future. One of the reasons for the repeated setbacks.
In early January of this year, the founder of NFTX said when talking about the decentralization of DAOs, “The benefit of DAOs is that stakeholders can veto proposals and elect new leaders if necessary. However, an overly open community governance is a step backwards. 99% Decisions should come from a visionary core team whose members know when to listen to teammates’ advice.”
The reason for this is that complete decentralization equates to majority control of governance, which is detrimental at all times because individual individuals lack the skills, knowledge, and long-term motivation to maximize the growth of the emergent system.
Even as powerful as the United States, it has introduced a very important Senate in national governance. The senators are basically filled with the top professionals in various fields, such as the current Arizona Senators Kyrsten Sinema and Mark Edward Kelly, the former is a legal expert , the latter was actually an astronaut on the spaceship Endeavour.
Only the linear thinking of “decentralization” will be abandoned
When it comes to Web3, the most direct impression is “decentralization”, and it seems to be inclined to think that the higher the degree of decentralization, the better.
It would be absolutely correct to apply this narrative logic to an “asset-based project” like Bitcoin, but it would seem difficult to fit this logic into an “application-based project” if the beard and eyebrows were slammed into it. After all, XMR and Asset tokens such as BTC do not have high requirements for performance, and the most important thing in the operation of application-based underlying projects is performance. In the face of the “impossible triangle”, the concession of “decentralization” to “high performance” is in line with Web3 development path.
Therefore, in the future development of Web3, the linear thinking of “decentralization” will be abandoned. In fact, the encryption industry is resonating with such changes.
Just take the fifth largest public chain Solana network as an example. Since 2020, the project has grown into the fifth largest encrypted asset, with a total market value of $47 billion, has been used to settle more than 50 billion transactions, and minted more than 570 Of the 10,000 NFTs, nearly 10% of the top 50 GameFi projects belong to this network.
This achievement comes from the high performance, low cost and ease of use of the Solana network, which has become one of the most popular networks for developers and users of micropayments, DeFi, NFTs, and games. Taking high performance as an example, public data shows that the average TPS of Visa is 1700, but in theory, the Visa network can process at least 24,000 transactions per second. Ethereum currently processes around 15 transactions per second on mainnet (and more on Layer 2), while Solana has a theoretical TPS cap of 65,000.
Scalability is a priority for Solana, and “a less decentralized but secure blockchain” is already the evolutionary idea of Ethereum competitors like “Avalanche/Luna/Cosmos/Polkadot”.
Even though we still put on the attitude of an old encryption OG, and said to the less knowledgeable novice that “decentralization is the only measurement factor”, have you considered such a question: how does Web3 meet the billions of levels? User.
Shouldn’t the answer be 1,000 yuan per transaction?
In early January this year, Lightspeed partner Amy Wu commented on decentralization, “The next billion-level Web3 users are more concerned with user experience than decentralization.”
The Web3 world needs decentralization to check and balance the despotism and hegemony of the Web2 world, but it does not need the decentralization of “waiting for half an hour for a transaction of 1,000 yuan”. After all, expensive is not the truth. Finding a balance among these necessary factors can maximize the market and conform to the spirit of Web3.
Continue the hunt for killer apps in the Web3 world
From 1980 to 2000 was the first 20 years of the Internet, called the Web1 era. In this era, giants such as Netscape, Yahoo, and AOL were calling for wind and rain, and they also created one after another investment and financing miracles in this era: Netscape launched the The issued share price was raised from $14 to $28, and it rose to $75 per share on the day of listing, with a market value of $3 billion, comparable to Apple’s market value at that time.
Perhaps, you might be thinking, they should represent the Internet, right? However, in the later script, Netscape was first killed by IE browser, and then 10,000 feet were stepped on by Google browser, while Yahoo and AOL ended in the Web2 era with different backs.
If the blockchain technology is an upgraded version of the Internet, then the wallet of Web3 is very likely to be the mailbox of Web1, and the public chain war of Web3 is very likely to be the search engine war in the era of Web2 and Web1, before the dust ends. , you never know who is the chosen one.
Looking back at the end of Netscape, just days after Netscape went public, Microsoft released Internet Explorer 1.0, which was bundled with Windows 95, and the two companies competed fiercely for the next year. , but Microsoft is not dominant at this stage.
However, that all changed with the release of Internet Explorer 3.0 in August 1996, and Microsoft finally caught up with Netscape in browser technology. In addition, Microsoft has grabbed Netscape’s market share in a very strong way by pre-installing the IE browser in every Windows.
Changes in Netscape Navigator Market Share from 1994 to 2007
Until August 2002, Netscape ended this 7-year farewell, and there was no Netscape in the Internet world. This is a sad story, but under the tide of the times, let you cry and blind your eyes, only to be sad.
Looking back at the current encryption world, have Google, Apple, Facebook and Amazon in the Web3 era really appeared? Is it Ethereum? If not… the revolution has not yet succeeded, comrades still have to work hard!
Web3 acceleration captures traffic from Web2
According to the “2021 Internet Industry Challenges and Opportunities White Paper” released by iResearch and Huawei, the traffic dividend of China’s Internet has gradually peaked with the decline in population growth and the increase in Internet penetration. In addition, the report also believes that the characteristics of Generation Z, small town youth and middle-aged and elderly groups outside the mainstream Internet user group are different, the traditional operation strategy is exhausted in absorbing new traffic, the new operation model has risks, and the traffic mining effect is not good , Internet companies have fallen into the dilemma of weak traffic growth.
In fact, weak growth is a common feature of the global Internet. As of March 31, 2021, the number of global Internet users reached 5.169 billion, accounting for 72.3% of the world’s total population. This is even more evident in developed countries. As of March 31, 2021, the Internet penetration rate in North America was the highest, reaching 93.9%, followed by Europe, with an Internet penetration rate of 88.2%. Peak traffic is almost a certainty.
If it cannot grow, for the Internet industry, there is no other way than to intensively cultivate existing users, which will lead to violent involution among giants. Either participate in the competition or find another way. Facebook’s renaming of Meta in October last year was a key step for Mark Zuckerberg to step out of Web2 and move towards Web3. Whether it can be successful or not depends on the future, at least the steps are taken.
In addition, in the past six months, with the gradual recognition of the Web3 concept, the search popularity of Web3 entries in Google Trends has also risen rapidly, even surpassing the search popularity of the Web2 explosion around 2006.
××Fi is still far from out of the circle
Web3 is an all-encompassing term covering cryptocurrencies (digital gold and stablecoins), smart contracts (L1/L2 platforms), decentralized hardware infrastructure (radio/memory/sensors, etc.), NFTs (digital ID and Property rights), DeFi (financial service transactions/web3 mortgage assets), Metaverse (digital residents built in a gamification-like environment, community governance (DAOs, decentralized autonomous organizations) and other major categories, as well as small categories such as GameFi .
The most eye-catching growth in the second half of 2021 is GameFi. With the rapid emergence of Axie Infinity, the rapid rise of AXS tokens from June to October 2021 has made giants see the possibility of GameFi projects, so Carry forward the spirit of hard work and quick work, and spend a lot of money on the GameFi track.
According to incomplete statistics, from October 25 to November 14 last year, there were 55 investment and financing events, of which 22 occurred in the GameFi field, and the amount of financing attracted by leading GameFi projects, studios, game companies, etc. More and more expensive, such as the blockchain game platform Forte completed a $725 million Series B financing, and the NFT game startup Mythical Games received a $150 million Series C financing, bringing the company’s valuation to $1.25 billion, refer to DeFi in 2020 The large-scale investment and financing events before and after the outbreak of Summer and NFT Summer in 2021 show that GameFi is being favored by capital and has become a popular concept in the crypto market.
However, after several rounds of investment and financing, it did not come out of the circle as quickly as imagined.
The reason is that Axie Infinity’s rapid exit is based on the team’s hard work since 2018. Most of the other GameFi eventually became a platform for trolling wool tools and selling NFTs. Saying this is a slogan is not at all for the sake of it. pass. Recently, even the number of users, transaction volume and total assets of the leading project Axie Infinity have declined. ××Fi, including GameFi, still has a long way to go before it really goes out of the circle.
Due to the length of the article, this article is divided into upper and lower parts. The second part of this article, “Top Ten Uncertainties of Web3 in 2022 (Part 2)” will be released on January 19.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/top-10-uncertainties-for-web3-in-2022-part-1/
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