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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?
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.
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.
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.