The global Web3 market was $3.2 billion in 2021. It is predicted that it will grow. It is likely that there will be a policy change for Web3 innovators. There is an increased use of decentralized social media. There will be more tokenized assets. There will be an increased use of blockchain technology. There is more focus on value creation. There are new avenues of value emerging. Older spaces are become old-fashioned.
There have been many good developments that are the foundation for blockchain adoption like venture capitalist posture maturity and new technologies like Optimism and Arbitrum that see scaling issues with blockchain.
What is Web3?
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It is basically a decentralized internet. It is owned by builders and users. It is based on blockchain. It has a concept of token-based economics. It is a new iteration of the World Wide Web. It is projected to increase this year and the decade. This is because of the increase in new technologies built on blockchain. Some say it is the internet of the future. Web3 will provide data security, scalability, and privacy for users. It will reduce the influence of large technology companies. It also has a concept of Decentralized Finance (DeFi). In this, users exchange currency without bank or government involvement. It is said that Web3 will work along with Web2. Web 2 will adopt Web3 technologies so that their services are also prominent. In 2023, it is going to be a popular topic for discussion.
Changing policy landscape
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The Web3 is growing rapidly. There was a lot of discourse on regulation and policy approaches for Web3 in 2022. In 2023, it is possible that there would be more concrete policy changes globally. In the U.S., 2022 was a year in which there was a lot of research as to how would Web3 policy look like. In 2023, it is possible that the outputs from President Biden’s executive order on digital assets and progress on crypto legislation in Congress will lead to clear policy landscape. More countries can take the example from Japan and come up with a clear policy office focusing on Web3 to establish more defined policy styles.
Coming up of decentralized social media
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One of the most important features of Web3 is the theory of decentralization. This means that there would be more directness as compared to what we have now in big tech. This indicates that there will be a rise in the status of decentralized social media in 2023. We are seeing this as the users join platforms like Mastodon. Mastodon is not a blockchain technology. But it is intended to be decentralized and it works on federated model. There can be arrival of platforms of blockchain platforms like Lens Protocol and Minds.
More tokenized assets
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Tokenization can allow for any real-world asset to have a digital symbol on a blockchain. The greater use of tokenization can revolutionize financial markets and many industries. 2023 will see an increase in tokenization. Many mainstream players like Blackrock and Goldman Sachs are using its possibilities. This could have an effect on financial markets. But other sectors with feasible assets can become digital like real estate and entertainment also.
More mainstream use cases
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In 2023, Web3 can come further into the mainstream. As the technology grows, there will be an increasing number of concrete use cases for it. This will be steered by companies that have started to explore Web3 like Starbucks. Starbucks came up with their new NFT-based rewards program Starbucks Odyssey in 2022. Along with traditional companies incorporating Web3 into their businesses, Web3-native uses will continue to gain attention.
Value matters
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Liquid tokens on a project’s balance sheet cannot motivate valuations anymore. Companies and projects must display tangible value to create free cash flow and connect network effects. The focus has been on the standalone ability to create value as compared to buying growth using tokens in the short term.
A Token+Equity model has evolved
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Investors like the liquidity concerned with the token. But its volatility and longevity has been an issue. There is a shift from pure short-term and liquidity-driven posture to long-term value-creating models.
Investors like long-term value creation. This is through a combination of tokens (short-term liquidity) and equity (long-term incentives). This reduces volatility and ensures long-term thinking which the new model is.
Decentralized platforms will help increase ecosystem adoption
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For adoption scale, technology should make it easier. This can be done by reducing barriers for non-technical users, using Decentralized Applications (dapp) deployment and faster ways to value creation. The new category of decentralized platforms is between Layer 2 chains and the landscape of dapps and use cases in ecosystem.
A dPlat (decentralized platform) can create a simulated iOS or Android-like effect. It can shield the Layer 1 and Layer 2 complexities. It can abstract blockchain features. It can create ease of development for uses. Many users will not get the complexities of the layer-one protocol behind. And protocols will be easier to make. The dPlat space is something to be watched closely.
Other developments
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The Semantic Web refers to Web3’s vision of the Web of linked data. The Semantic Web has principles. These principles are extended from documents to data. This is like a data web. The NFTs will allow creators to associate with their users like never before. In 2023, Web3 creators will come up with user-centered design that puts user needs front and center. There will be better-design custody and asset servicing procedures. Web3 service creators will invest time in familiarizing users with how to use products. They will increase transparency in Web3 services. They will also reuse existing designs to create familiar designs.
Conclusion
Layer 2 technologies, network effects, regulatory issues, decentralized platforms and investment changes will help raw protocols to measure adoption and transactions. This year we will see a lot of positive changes to the ecosystem. There will be new paradigms.
By Bhawna