The Next Wave of Blockchain Innovation: What to Expect in 2023
The past year has been a tumultuous one for the crypto market, with numerous decentralized and centralized entities struggling to stay afloat or fail outright. It seems as though we are in the final stages of the bear market, with bad actors and practices being purged in a dramatic but necessary process for the overall system’s maturity. Despite the challenges, the Web3 technologies that will emerge from this crypto winter have the potential to change everything.
Web3 represents the next evolution of information exchange, similar to the transition from an agricultural society to an industrial one. As we move into the future, here are some predictions for what we can expect to see in 2023:
Crypto venture capital funding is expected to continue declining in the first half of 2023. While this may seem like a negative trend, it is actually a normalization process. Investors are waiting for the market to bottom out and taking into account broader economic factors and global recession risks. In the meantime, new settlement, interoperability, lending, and trading protocols will be funded to fill the void left by recent hacks, regulatory changes, exchange collapses, and other disruptions.
In 2023, the initial Web3 ethos that rejected the need for big brands is likely to disappear. Participants will come to realize that without funding from large brands, the only value of a token comes from the user and speculator dollars. Instead, projects will embrace big brands and the advertising, marketing, and sponsorship dollars they bring, in order to achieve the Web3 dream of tokens representing micro equity among actual users. Web2 brands such as Nike, Starbucks, and Meta will continue to experiment with Web3, with a focus on non-fungible tokens (NFTs) and customer acquisition and engagement rather than monetization.
It will become clear that the way many have been thinking about community in Web3 is misguided. “Community” has often just referred to a group of speculators in a Discord sharing a common dream of quick wealth, who abandon the project once the growth slows down. While there will be exceptions like strong, engaged decentralized finance communities and online-to-offline decentralized autonomous organizations like LinksDAO, it will be recognized in 2023 that the whole Web3 ideal of project/community fit was frequently just project/speculator fit. Therefore, the importance of actual product/market fit cannot be ignored.
As Web3 app development costs decrease and user acquisition costs increase, there will be a greater emphasis on quality and discovery. Web3 will have its own App Store and AdMob-like platforms to help developers and users connect more efficiently. Simple, intuitive apps with innovative engagement and monetization mechanisms will be the most successful, much like the top-downloaded and top-grossing apps in the early days of mobile.
The trend towards stability and sustainability in Web3 games will lead to a wave of products with built-in stability but without the dynamic boom-and-bust nature of most crypto speculation. This will create a flat, muted playing field that favors established players rather than new entrants.
As we look to the future of Web3, it’s clear that blockchain apps will continue to carve out a niche market among users who have an affinity for this technology. These apps may offer functionalities similar to traditional businesses, but with the added benefits of blockchain components. While some may differentiate themselves through marketing and user experience, others may take bold risks in pursuit of truly groundbreaking innovation.