[50] Web3 in 2023

First Post of 2023

LJW

William Starr

Shaman4646

, and 3 others

Jan 02, 2023

GM Readers,

Happy New Year! 2023 here we go!

After a crazy 2022 in Web3, particularly with the crypto winter and implosions of some major projects, we wanted to look ahead to Web3 in 2023. 🛳

Rather than write a prediction piece, we decided to ask some members in the Life in Color collective for their thoughts.

We asked them one question: Where does Web3 go in 2023?

My prediction on where Web3 goes in 2023 is simple: For Web3 to get the next level, we bring back WAGMI in 2023.

But of course, the Life in Color members have more interesting things to say!

🛟 Disclaimer:

This post was written for purely educational purposes. Any thinking on the future is usually wrong, but from a brainstorming perspective, it can help spur our imagination and thinking. Nothing written in this post should be taken as financial advice or advice of any kind.

Empower yourself, DYOR (do your own research).

Mike, CEO of Gen City Labs

Gen City Labs is a community creation, engagement and loyalty platform for brands, powered by Web3. Mike Schaiman (aka Shaman) also founded and lead Non-Fungible Heroes.

[Website] [Linkedin] [Twitter]

My Top Three Predictions for 2023:

Digital Identity becomes 'The Thing': From the early days of digital interaction (choosing screen names, picking characters in video games), we have looked for ways to identify ourselves. This trend will continue in new and unique ways in the coming year.

The letters 'NFT' get phased out: No one says 'did you see that mp4?'. No one asks 'Did you check out that HTML page'. And given the perception around the letters N-F-T, I think we'll be using 'Digital Collectibles' and other monikers to describe them.

Security, Security, Security: Nothing can progress until people feel safe. Remember the days where people were afraid to give out their credit card info online? That's where we're at. There will be bad actors in the space doing bad things, but a wave of products and services providing more secure ways to participate will enable millions to comfortably engage with Web3.

The foundation of our digital future is being built NOW. And the future couldn't be brighter 😎

Cameron, CEO of VF Protocol

VF Protocol is a zero fee payments network built with crypto infrastructure. VFP's first product is a decentralized NFT escrow and private sale protocol.

[Website] [Linkedin] [Twitter]

Crypto will be low profile for most of 2023. Media will proclaim it as having run its course, especially NFTs. More specifically, there are a few areas I am watching in 2023:

Payments: I think payment processors and other payments giants (e.g. Visa) will quietly push to make crypto look exactly like the existing payment rails, except they get to cut out all the interchange organizations and keep the margin. It will be oriented completely around stablecoin payments. There will be a big Layer 2 (L2) payments push. I don't think any of this will result in lightspeed adoption in the US. But developing countries will continue to adopt crypto, especially stablecoins, for payments — mostly on L2s to save on fees.

NFTs: 5-10 blue chip collections continue to show signs of life and eventually turn into meaningful IP bases with supplementary content outside of just PFPs. While this NFT PFP era is dying, I think a few really experimental NFT project formats come front and center — potentially as collaborative storytelling, or ultra luxury art or well-executed content gating. NFTs (the technology) will have a productive building year. Coupons, discounts and rewards are the first thing to get completely transformed by NFTs and transform entire industries in the process (coupons, etc.). NFTs offer new data models and let companies track usage in a way that blows CMOs’ minds. CMOs and the marketing departments get hungry for more and more of this precise data to influence their strategy.

NFTs x Creators: On the creator side, music NFTs emerge as an "outside" pipeline for artists to get popular. It won't replace SoundCloud, but there will be a handful of artists that build a cult community following around music NFTs, and those superfans will use the music NFTs to engage with the creator and artist. Creator NFTs in general start to come around slowly, then suddenly as creators realize there is a potentially more lucrative economic model (~ high margin product that aggregates and gates access to some product and/or experience.)

Erica, Founder of KryptoSeoul

KryptoSeoul is a community organization that hosts BUIDL Asia, one of Asia’s largest Web3 conferences that brings together the industry’s top thinkers and builders in Seoul.

[Website] [Linkedin] [Twitter]

As someone who has been community building in Crypto for 6+ years now, I think 2023 will center around a new generation of founders building game changing projects that will mature the space. In the last Crypto Winter, when the headlines were all doom and gloom, I saw firsthand how top talent was still entering this space. In the last Crypto Winter, projects like Open Sea, Solana and Polygon were just getting started. For those who stick around despite the market situation, their consistency will pay off. On the community building side, I am personally excited that Seoul will continue to be a hub for a meeting of the minds in Asia. I believe in 2023, we’ll see again the power of communities in Web3 and how a bunch of smart people who have the right intentions can make progress toward Crypto’s ideals and values.

Tayyab, CTO of Casama

Casama is a community-owned user research platform where users test-to-earn Web3 products and protocols.

[Website] [Linkedin] [Twitter]

Stablecoins: Crypto has finally found its killer app in stablecoins. In the developing world, most people don't want access to BTC/ETH, they want USD, but local liquidity in those markets makes it difficult or expensive to access dollars. Additionally, most countries have severe restrictions on what you can or cannot do with those dollars. Lastly, with many countries in a high inflation environment, stablecoins become a safe haven asset for people. There is the right combination of tools, access, motivation and no other choice that make me believe stablecoins will garner major adoption in 2023.

Crypto Business Models: Welcome to the law of gravity in business, you only stay alive if you make more money than you spend. A lot of projects in crypto launched without a clear business model or any true sense of how they would generate revenue, many solely relying on tokens and some basic tokenomics. But, no one knows how long this crypto winter will last and the smartest teams realize that they need to generate revenue to keep pushing their mission forward. The most obvious crypto-native business model is NFT sales used by Nouns, ENS, most "utility" NFT projects, and more. While NFT sales will likely remain the main source of revenue for most crypto projects, I think we’ll continue to see new and novel mechanisms invented around it in 2023.

Wallet Improvements: The wallet experience is awful for a newbie. Great UI/UX that is simple and sleek matter for mass adoption. In 2023, Wallet competition will feel like the browser competition of the 1990s where incredible core pieces of Internet technologies were invented to keep gaining an edge on competition. I expect a ton of innovation, improvements and odd experiments as people try to become your gateway to the crypto-verse.

Will, Investor / Technical Lead at Fintech Collective

Fintech Collective is a full-scale investment firm specializing in Fintech, Crypto and DeFi investments.

[Website] [Linkedin] [Twitter]

Some trends and developments in 2023 I am excited by:

Transactions and Financial Inclusion: Bridging real world assets on-chain could revolutionize traditional finance by allowing individuals to easily and securely transfer ownership of assets like real estate, art, and precious metals. As crypto continues to touch more lives, people will find more and more ways to link their "real life" with their "crypto life." Crypto could be a solution for financial inclusion in developing countries, allowing people to access financial services that may not be available to them through traditional means. Crypto and blockchain could also lead to greater financial literacy and responsibility for individuals.

DAOs: The "institutionalization" of DAOs could lead to more transparent and decentralized decision-making processes, but it could also potentially lead to centralization of power if certain actors wield disproportionate influence. A study showed that the top 1% of DAO token holders control 60% of voting power. We need to be thinking deeper about how we actualize giving the right stakeholders the right control over an organization. The rise of crypto platforms for decentralized governance and decision-making that allow people to use cryptocurrency to participate in and influence the decision-making processes of various organizations and communities will be critical to enable the vision of DAOs.

New Company Trends: (1) Using blockchain for social impact and environmental sustainability, such as using crypto to fund renewable energy projects or to incentivize conservation efforts. (2) Crypto-based metaverse + Gaming, VR/AR platforms that enable people to use cryptocurrency to purchase and trade virtual goods and experiences at scale with familiar and frictionless UI/UX. (3) Using blockchain for decentralized content creation and distribution, such as using cryptocurrency to fund and reward creators of music, art and other forms of digital media.

JK, Building Something New in Staking

JK is currently tinkering and building something new in the validator and staking space. He has been one of the most involved validators in the Crypto space and was formerly the head of strategy and business operations at StakeFish, a leading validator / infrastructure company.

[Linkedin] [Twitter]

2023 will be the year when Crypto goes back to its roots and core values. Decentralization will be prioritized once more along with closer scrutiny around all centralized players. Our community will resume asking the hard questions on trust and will return to old habits of self custody and self verification of on-chain products. I don’t think 2023 will be the year where we’ll see Crypto bouncing back yet. The ecosystem still requires significant UX and UI improvements to be made to onboard the next wave of DeFi and NFT users. Hence, I am closely observing wallets, explorers, blockchain APIs and on-chain analytics projects that are contributing to maturing the crypto user experience. The Crypto Winters are a great time to build.

Sam, CEO of Geno / dPrism

Geno is building interoperable, intelligent and scalable data infrastructure to power multi-chain analytics. One of Geno’s first projects is dPrism.ai, an on-chain data analytics platform.

[Website] [Linkedin] [Twitter]

As top teams continue building through the Crypto Winter, every project will think about sustainable growth. Every project team will need to make smarter decisions, backed by data to deeply understand their user profiles and personas. While the data exists openly and transparently on-chain, more analytics platforms that are easy to use will help project founders and leaders better serve their users. Additionally, in 2023, conversations around transparency will become front and center, especially in light of FTX. Ultimately transparency leads to trust in crypto and decentralized systems. Transparency is a function of having open data structures that are not only accessible, but also easy to use for all.

📈 Life in Color Tip:

🛟 Disclaimer:

This post was written for purely educational purposes. Any thinking on the future is usually wrong, but from a brainstorming perspective it can help spur our imagination and thinking. Nothing written in this post should be taken as financial advice or advice of any kind.

Empower yourself, DYOR (do your own research).