Web3 is very popular, but three prerequisites must be met before it can truly take off

Web3 is the next generation of the Internet that will redefine our lives. Using cryptography and distributed ledger technology, Web3 provides the framework for building a user-owned Internet. A tsunami of Web3 has emerged, and this has brought new opportunities to industries such as financial services, gaming, e-sports, media, entertainment, retail, and more.

At present, the Web3 ecosystem has attracted a considerable amount of capital. Whether it is DeFi, NFT, DAO, P2E games, data storage or social media, there have been start-ups of considerable size. DappRadar reports that in the first quarter of 2022 alone, venture capital funds and investors have invested more than $2.5 billion in blockchain games and related infrastructure. compared to full year 2021

$4 billion in total investment and $80 million in 2020, which is certainly a pretty huge increase. And this is just one aspect of the Web3 ecological development process.

Another report, published on GitHub, indicated that there are more than 18,000 active developers in the Web3 ecosystem, and the so-called “active” means that these developers commit code to open source blockchain projects at least once a month. The report also claims that the true number may be even higher, since this segment of developers does not include those individual developers in the Web3 world.

By all metrics, Web3’s growth is unprecedented. But it still has a long way to go before it reaches the mainstream adoption stage. While investor and user interest in Web3 products and services is increasing, several factors need to be addressed to accelerate Web3’s growth.

In order for Web3 to truly “take off”, Web3 users, investors, and project developers need to implement the following mentality changes.

Users must change their mentality to a “user-owned” model

In the current iteration of the Web2 “as a service” Internet, users have little say in the future direction of the product or service they use. In most cases, there is a rift between the user and the owner of the platform, and it is not until after the platform goes public that the user acquires in some sense negligible “ownership”.

However, although shareholders can participate in the voting of part of the decision-making, ordinary investors obviously cannot promote the change of enterprises. Even if a considerable amount of stock is purchased, the decision-making power that this ownership gives small shareholders is quite limited, and they cannot have the same voice on the table of institutional investors or corporate decision-makers.

In contrast, the Web3 pattern provides true ownership. Tokens enable users to have early and decentralized ownership of a platform or service. Users who have previously compromised near-zero ownership in a private enterprise must be familiar with the responsibilities of ownership and governance. They need to recognize the power of this “ownership” and the extent to which they can contribute and influence the direction of a product or service.

By investing at an early stage, even an ordinary person can become part of the project management, driving the product roadmap together with the community. The whole decision-making process will become more transparent, inclusive and fair, and these attributes usually do not exist in the Web2 ecosystem.

Investors need to shift to a ‘community driven, collaborative and engaged’ mentality

In the Web2 paradigm, investors focus on competing for percentage of control and board seats to ensure value capture and governance oversight authority.

However, this approach is not as effective in Web3. Decentralization of ownership is a key principle of Web3. Network effects are best accelerated by the decentralized ownership of community members who can play multiple roles in the ecosystem (users of services, investors, suppliers, business partners).

The project party needs to find a sustainable way to attract users

Usually, projects can generate considerable popularity in a short period of time through token incentives. Undoubtedly, such an event can quickly attract users and liquidity providers, thereby improving the performance of key metrics.

However, this approach also has its drawbacks. It tends to attract mercenary capital and speculators who have no loyalty to the platform’s purpose and long-term vision. Furthermore, key metrics driven by short-term incentives often obscure the accuracy of assessments of “product-market fit”. Tokens with high inflation and initial issuance are equivalent to wasting market budgets on things that don’t really matter in the long run, which will greatly reduce the project’s “ammo” in future wars.

Instead, every project should design a token economic model thoughtfully. Only after finding a core audience who truly agrees with the team’s values ​​and accurately distributing tokens to these people is a good enough idea.

summary

While the phrase “we’re still in the early days of Web3” has been rotten, it’s actually true, the content may seem cliché but it’s true, we’re really in a fairly early stage, but That’s why we need to think more, and I hope this article will provide some help to those who are trying to build the next generation of the Internet.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/web3-is-very-popular-but-three-prerequisites-must-be-met-before-it-can-truly-take-off/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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