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Tag: Web3.0

  • The Pros and Cons of Big Brands Launching Web3 Projects | Entrepreneur

    The Pros and Cons of Big Brands Launching Web3 Projects | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    If you’ve been watching blockchain news, you likely saw the troubling figure that Web3 startup funding fell 74% in 2022. Yet megabrands such as Starbucks, Mastercard and Nike, all launching Web3 or Metaverse projects this year paints a conflicting image of Web3’s current status and future development.

    This may seem like deja-vu from the big-brand NFT craze in 2021 and early 2022, but these projects seem to be much more grounded in providing tangible value instead of manufacturing exclusivity. Major mainstream companies clearly see value in certain aspects of Web3, but with larger infrastructure still a work in progress, is this grand re-entry premature?

    Related: 4 Things to Consider Before Investing in Web3

    Big brand benevolence

    Large companies debuting and re-entering Web3 benefit the space by granting an undeniable cachet to the industry as a whole. Where blockchain-based developments have often been marked as gimmicks or marketing ploys, lower-profile launches show that Web3 technology can function with less fanfare by putting concrete user benefits at the forefront of product launches.

    A stamp of approval from companies outside the blockchain realm, and even the tech bubble, can solidify which Web3 use cases are viable. Gamer outrage drove gaming companies to backpedal on NFT integrations seriously, but we’ve seen virtually no public backlash to Starbucks transitioning its already incredibly successful rewards program to an NFT-based framework. Yes, it is essentially the same technology, but utilized in a way that enhances a service that non-crypto users already love instead of a useless distraction from a main product.

    Another key point of difference this time is the focus on the more tech and innovation-centered aspects of Web3, such as augmented reality (AR). Yes, Meta has long been the leader in this space with Oculus, but the details surrounding Apple launching its own “mixed reality” headset this spring gives a new level of prestige to AR progress. This news creates an even bigger splash considering Apple’s reputation for observing tech developments from the sidelines until it’s a clear win.

    If we’re measuring Web3 progress by a constant influx of VC dollars, then the state of the industry doesn’t look rosy in the short term. But the clear sustained interest from giants outside the industry shows that there is a solid curiosity and desire for Web3 technology. That being said, with big players entering the fold, there is room to question if Web3’s skeletal infrastructure and limited interoperability are ready for it.

    Related: Venture Capitalists are Pouring Money into Web3. Here’s Why.

    Too much too soon?

    A vote of confidence is vital for any industry’s growth, especially for smaller projects looking to get off the ground and build something revolutionary. But outside support doesn’t always guarantee that a platform or industry can succeed in the long term. Just look at the number of companies with an outpost in the primordial Metaverse project Second Life.

    Large-scale Metaverse infrastructures are still more of a sketch than a completed portrait. While big brand investment certainly fuels more frameworks to exist, it might not always have the best interests of a community at heart. What could end up happening is brands painting themselves into a corner, developing siloed Web3 worlds that only serve their customers and mimic the type of “walled garden” ecosystem that describes many internet platforms now.

    Companies that ignore the need for community-based frameworks do so to their detriment. Silicon Valley’s infamous “move fast and break things” mentality somewhat backfired on Web3 projects that didn’t realize you need an infrastructure to exist first before breaking it.

    By creating ecosystems that are not conducive to community growth, Web3 development and infrastructures become a black box, inaccessible to other projects or developers. This is where projects such as SendingNetwork, a software development kit (SDK) with tools that Web3 developers of all sizes can use to create community-centric platforms, step in to form an interconnected digital landscape. These sector-crossing initiatives are just as vital to creating a common Web3 foundation with projects trying to form the industry in its image.

    Related: They Say Web3 Is the Future of the Internet. But How?

    Making sure Web3 infrastructures are solid before courting larger projects can also help secure their interest in the long term. Companies of a certain stature have no qualms about experimenting in a new, potentially revenue-driving space, only to retreat after one bad quarter or plateaued growth. We’ve seen this happen in the blockchain space before, so it would be wise not to retread this path.

    Ultimately, there are clear benefits and drawbacks to megabrands hauling Web3 back into the mainstream. Where certain companies can lend legitimacy to the Web3 space, it’s important not to disregard the less glamorous yet vital strides smaller projects are taking to create common ground. Essentially, while brands invest in their projects, they should consider taking a big-picture approach to become fixtures in Web3 that bring in new communities outside their own corporatized space.

    Ariel Shapira

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  • Web3 in 2023: 6 Trends Towards The Path of Sanity

    Web3 in 2023: 6 Trends Towards The Path of Sanity

    Opinions expressed by Entrepreneur contributors are their own.

    We came off a euphoric bull run in 2021 to an epic bear market in 2022. A lot has changed in this period, with protocol collapses, regulatory bans, code sanctions, CeFi obliteration, heightened FUD and bad actors causing an industry-wide contagion through acts of fraud.

    There have been many positive developments in this period that lay the platform for blockchain adoption, like venture capitalist posture maturity and new technologies like Optimism and Arbitrum that address scaling issues with blockchain, the emergence of new categories like decentralized platforms and regulatory clarity in many countries. A few notable and likely trends for 2023 are shaping up.

    Related: Web3, Crypto, Cybersecurity, Rural Fintech: Trends To Look Out For

    Stand-alone value matters

    Liquid tokens on a project’s balance sheet cannot drive valuations anymore; companies and projects must show tangible value to create free cash flow and harness network effects. Lately, the focus has been on the standalone ability to generate value versus buying growth using tokens in the short term.

    Emphasis is shifting to user monetization from bought-out growth that has proven unsustainable as market cycles change. Investors view equity as claims to future cash flows and profits (minus liabilities) and tokens as value created from future utility or services delivered by the protocol.

    Given the relative maturity of the market, many protocols have not charted a clear path to sustain value through future delivery of utility, causing a shift in investor mindset. Investors are now emphasizing the quality of revenue, which can raise the value of their equity profile while eventually accruing token value.

    A “Tokuity” model evolves

    Investors like the liquidity associated with the token; its volatility and longevity have been concerning to many. There seems to be a shift from pure short-term and liquidity-driven posture to long-term, value-creating models.

    Investors would like long-term value creation incentivized by a combination of tokens (short-term liquidity) and equity (long-term incentives), reducing volatility and ensuring long-term thinking, i.e., a new model Tokuity (Tokens + Equity).

    Related: Why Your Business Assets Belong on the Blockchain

    ETH killers are unviable

    It was once possible that multiple new players would emerge to overcome Ethereum’s technical shortcomings, slow execution and market dominance. Many Layer 1 protocols squandered their windows of opportunity, failing to drive adoption at scale.

    It may be difficult for a new platform to unseat Ethereum as the dominant player anymore as it embarks on many improvements in the months ahead. Ethereum and Polygon dominate use cases, consumers, enterprises and ecosystems. Users and enterprises will trade off minor technical advantages of other blockchains for security, interoperability and network effects.

    Ethereum, the blockchain everyone loved to hate in the bull market, now has the last laugh for “ETH killers.” Most Ethereum-hating chains have completed or are racing to become EVM compliant (Hedera, Solana, Algorand, Near, etc.). Others like Phantom wallet (Solana’s wallet) and Trader Joe (Avalanche’s DEX) also extend support to the Ethereum ecosystem.

    The future is still multichain

    Even though ETH-killers will not likely deliver the advantages amassed by the Ethereum ecosystem (including Polygon, Optimism, Arbitrum, etc.), the future will still be multichain.

    The concept of a “multi-chain” system refers to using multiple independent blockchain networks that can interoperate with each other allowing flexibility in application deployment for different transactions or processes. For example, one blockchain might focus on high-speed, low-cost transactions, while another might focus on security and immutability. For Defi, users will want their collateral on one chain and borrow on another. The portability of gaming assets across metaverses is another use case. A multi-chain system could offer the best of both worlds by allowing different blockchains to work together.

    Related: The Future Role of Ethereum in Multi-Chain Technology

    Interoperability is a critical capability required for a true multichain world to manifest. However, the current bridge technology is fragile, leading to security risks and hacks. Blockchains using bridges to Ethereum create more risk and less value with enterprise use cases.

    While niche chains, e.g., Hedera (optimized for enterprise) or Flow (optimized for metaverse and gaming), may co-exist, the market simply cannot afford the number of Layer 1 protocols/blockchains in existence today. The L1 space is crowded, differentiation is limited, and the market is finite. A multichain future requires mature interoperability solutions.

    Layer 2 is the new frontier

    After the Ethereum ‘merge,’ the blockchain landscape is significantly altered by negating competitive differentiation for the ETH-killers. Ethereum is repositioned as the base layer for settlement under multiple Layer 2 protocols, forming a scalable ecosystem.

    Blockchain’s scaling problems are unfolding. As enterprise adoption of blockchains grows, we will enter a magnitude of multi-billion daily transactions, and even baked Layer 2 solutions may not be enough. We will see the rapid evolution of new categories like decentralized platforms and new forms of roll-ups. These will migrate action up the blockchain stack while letting the base protocol accrue its own value. The last few cycles were about Layer 1 and infrastructure; it will now be about scaling, interoperability, and ecosystem maturity. Layer 1 battlefield is now empty with a handful of survivors; layer 2 is the new frontier.

    Decentralized platforms will accelerate ecosystem adoption

    For adoption scale, technology must make it easy by reducing barriers for non-technical users, deploying faster Decentralized Applications (dapp) deployment and faster routes to value creation. The new category of decentralized platforms sits between Layer 2 chains (layer 1 chains) and the fractured landscape of dapps and use cases driving a vibrant ecosystem.

    A dPlat (decentralized platform) can simulate an iOS or Android-like effect, shielding the Layer 1 and Layer 2 chain complexities and abstracting blockchain features to enable ease of development for uses. Many users will not realize the complexities of the layer-one protocol underneath, and protocols will become easier to build on. The dPlat space is one to watch closely.

    Concluding thoughts

    Layer 2 technologies, robust network effects, regulatory considerations, decentralized platforms, and investment outlook changes will help the inherently raw protocols to scale adoption and transactions. The next 12 months bring a lot of positive changes to the ecosystem despite a bull or bear market; let us prepare for the new paradigms.

    Nitin Kumar

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  • What Not to Do When Marketing a Web3 Product

    What Not to Do When Marketing a Web3 Product

    Opinions expressed by Entrepreneur contributors are their own.

    Despite being a disruptor to the old order of web apps in principle, Web3 success still relies a lot on traditional marketing. The word about these products needs to get out somehow, and the only way they can get out is through marketing.

    To an extent, this means that a product lives and dies on the strength of its marketing. It does not matter how innovative or genius a product is: if word about it does not get to the people who need it, it will die in ignominy. Perhaps if the idea behind the product is genius enough, someone else will inevitably pick up the idea and market it better.

    We have seen that happen many times in tech history, and there is no doubt that it could also happen today. Myspace, for example, lost to Facebook for a lot of reasons. But one of the reasons was that Myspace was not getting into the consciousness of people fast enough. Of course, Myspace eventually tried to fight that, but they eventually lost. They did all the wrong things marketing-wise, and their loss was almost inevitable.

    The same goes for Web3 products. It is easy, and perhaps true, to say that Web3 is the future. But what’s not easy to say is what products will dominate that future. Friendster and Myspace were all first movers in Web2, but all of them died before Web2 became the future. This goes to show that it’s really not about first movers, instead, it’s about the ones who survive. That is why it is important to learn from the marketing failures that riddle failed products and avoid doing them.

    Related: If You Have No Clue What Web3 Is, You’re Not Alone. Here’s a Breakdown of the Future of the Internet.

    Don’t experiment too much

    Many marketers fall into the trap of experimenting too much with Web3 marketing. They fall into this trap because they assume that since Web3 is somewhat experimental and new, Web3 marketing should be the same — but that’s not true. There is no reason why the marketing of a product should model the product itself. Aside from that, there is little reason to disrupt marketing itself. Traditional marketing works, and it works well.

    Even if you are going to have a policy of disrupting marketing, as it were, it is important to do this with the aid of research. A lot of the Web3 products coming online these days are startups, which means they could be living on borrowed time. It is unwise to experiment with the future of those fledgling products by just throwing whatever at it and hoping something new and radical sticks. It’ll probably fail and may lead to the death of the company.

    Don’t use influencers first

    Influencer marketing works — that’s probably the first thing you should know. If you want a critical mass of people to sign up or purchase your NFTs or tokens quickly, then it’s probably smart to get an influencer to market for you. But here is the thing; influencer marketing is 100% a grenade. Suppose you know how to use a grenade, good for you. However, if you don’t know how to use it and try to use it, you may end up blowing yourself up. 2020 and 2021 saw the rise of Web3 products using influencers to scale. But do they work? ‘Or did they eventually blow up?

    Well, according to a Visual Objects survey, not really. Most people are starting to realize that influencer marketing is inauthentic. This is an especially important thing to note if what you are selling, in essence, is risk and profit. People do not listen to people without skin in the game when it comes to taking risks. They understand that influencers do not have skin in the game, and are then less inclined to take advice from them.

    Here is the thing, Web3 influencing is a dying market. Shortly, scandals like the Kardashian fiasco will cause governments to clamp down on influencer marketing. That is why product leads and heads of marketing must be very careful before choosing to step into the river of influencer marketing. It is a tool that works, but it is a tool that must be used carefully. If not, it can cause more harm than good.

    Related: How to Prepare Your Brand for Web 3.0 Marketing

    Don’t overspend

    One of the biggest mistakes you can make in marketing is assuming that a huge marketing budget means effective marketing. Many times, companies spend a chunk of their budget on symbolic but ineffective ads, such as huge billboards or an ad slot during the Superbowl. But spending big in itself does not guarantee success — grassroots efforts that reach out to your market directly can be more effective than a billboard in every airport.

    Don’t be too shy to ask for help

    Web3 founders are fond of doing everything themselves. From raising money to running the day-to-day business, they have a lot on their plate.

    This spills over to marketing and public relations, too — but marketing isn’t as easy as it might seem. When projects and even celebrities and influencers post something on social media, a lot of time and effort went on behind the scenes to make sure the post read exactly the way it needed to be read as far as messaging, content, SEO and target audience.

    There is a lot that goes into this, which is why marketers get paid big money. It helps to hire a marketer part-time just to see what they do, or even vet a few agencies to see what they offer.

    Sometimes, it’s as easy as being pointed in the right direction. Don’t waste anyone’s time, but take a closer look at the nuts and bolts of things. What are the individual components that may even be involved? What do you need to learn about? Does the marketing agency offer SEO? Well, now you know that’s something you need. Go research it or you can schedule a consultation with a marketing team — $300 may seem like a lot of money to pay for an hour or two of education, but that’s all it really takes for a workable strategy to form.

    I often brainstorm 90% of my marketing plans on the very first call with my clients. We’ve done it over and over again, and we can see how your product fits into the audience as easily as you can see how your product fits into the market. The point is to find some way to get a second opinion, and you’re well on your way.

    Kurt Ivy

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