What should web 3.0 builders focus on to emerge stronger from the bear market?
HodlX guest post Submit your message
All markets are cyclical and Web 3.0 is no exception. Here’s what the community needs to work on to drive the next bull market.
As shown in the recent a16z State of Crypto Report 2022, crypto has historically followed something the authors call the “price-innovation cycle.” A surge in prices attracts new builders, who develop new solutions to long-standing problems, even when prices drop.
These new applications are renewing interest in Web 3.0, which is bringing waves of users into the space, causing cryptocurrency values to rise again. Although there are ups and downs, the overall trajectory is one of growth.
The silver lining is that, with less hype and euphoria about rising prices, manufacturers can devote more attention to developing truly innovative protocols. Recall the major breakthroughs that led to the ICO craze, the DeFi summer and the NFT boom.
Every great rally was preceded by a phase where imaginative people rolled up their sleeves and got to work. We are currently in such a phase. Here are four key areas where builders should invest their time and talent if they want to ride the next bull market.
Web 3.0 user experience (UX) needs to improve
The forefront of Web 3.0 is populated by “early adopters,” who are generally more tech-savvy and more willing to experiment with the unknown. However, the capabilities and features that appeal to early adopters often intimidate less advanced users. This creates barriers to entry that stifle Web 3.0 adoption.
The biggest barrier to entry is often based on overcoming the technical hurdles required to participate in Web 3.0. Users need a wallet to interact with protocols. Addresses used to send and receive transactions are made up of a long string of numbers and lettersa far cry from Web 2.0 usernames and passwords.
Moreover, it is a huge responsibility to take on the burden that has always been on the bankscustody of your own assets. If a user loses their private key and seed phrases, there is no customer support line to call. These funds are inaccessible.
The next wave of successful projects will find ways to make it easier for new users to transition into the space by simplifying those technical hurdles and unknown processes involved in getting into Web 3.0.
Web 3.0 must extend financial services
Core lending and borrowing are essential pillars of the traditional financial system that are replicated in DeFi. By migrating consumer financial offers loans, business loans In DeFi, opportunities are created for lenders to leverage their crypto assets to earn interest on liquidity.mortgages, auto
Additionally, borrowers who may not have a traditional bank account have access to loans that would otherwise not be available to them.all based on their crypto collateral or proof of eligibility.
That said, bringing TradFi to DeFi is not enough. In order to become the world’s default financial system, DeFi must expand the core financial services already ubiquitous in TradFi to attract people and institutions to the new field of decentralized finance.
This is where education about the importance of decentralization comes in. People need to understand the benefits of owning and controlling their own financial destiny instead of putting their money in the hands of banks.
The 2008 financial crisis illustrates what can happen when power and control is centralized in the hands of a few who act in their own interest rather than in the interest of the majority. The core value of cryptocurrency is to empower people rather than businesses to own and control their own value.
Builders should focus on enabling Web 3.0 e-commerce
Web 3.0 threatens to break the grip of retail giants on e-commerce, giving consumers greater decision-making power. A key element involved in facilitating this transition is again implementing a frictionless user experience that delivers the benefits of Web 3.0 with the look, feel, and convenience users already expect from Web 2.0.
To use an example, new financing options, such as “buy now, pay later” services, which are an essential part of Web 2.0 e-commerce, will further drive the adoption of Web 3.0 for e-commerce. Studies show that offering a “buy now, pay later” option at checkout increases conversion rates by seven percent over traditional card transactions.
Another way to capture buyers’ attention is to engage through Decentralized Autonomous Organizations (DAOs). Increasingly, we’re seeing brands and influencers launching DAOs as a way to turn customers into community members, giving them decision-making power over contests, new product features, and sometimes revenue streams from shared investments.
Are you looking for capital? Build infrastructure
When 300,000 people raced across the country to get rich during the California Gold Rush, it was Samuel Brannan, a merchant who provided materials to miners, who earned the most money of all. With Web 3.0 going through a bear market, the most discerning VCs pull a page from Brannan’s book and focusing their investments on infrastructure.
Infrastructure projects are projects that others can build on Messari Report indicated that these projects showed clear signs of increasing profitability. This shouldn’t be a surprise. Fascinating things are happening in the area of infrastructure.and a recent
The new infrastructure enables permanent file storage, low-cost streaming and on-demand video, and even decentralized wireless networks to power the Internet of Things. With such an array of new tools to build with, who knows what’s next?
It’s time to roll up your sleeves
Bear markets are not new phenomena, which means that history has lessons for us. This includes Internet history itself. When the tech bubble burst in 2000 after the euphoria of the late 1990s, it was not the end of the internet. Instead, with the noise and nonsense of projects with bad fundamentals filtered out, a new generation of stronger projects emerged.
The new wave included improved e-commerce, increased financial services offerings, improved infrastructure, and improved UX. It means it’s an exciting time. History is full of bull and bear markets, and the bulls that emerge from this period can affect everyday life for decades to come.
Ryan Berkun is the founder and CEO of Cashier, DeFi’s unsecured lending protocol. Ryan is an alumnus of crypto startup school a16z, angel investor and mentor at CELO, a mobile blockchain optimized for peer-to-peer payments. Previously, Ryan focused on Web 3.0 infrastructure for projects such as Tezos, 0x and Livepeer.
Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any loss you may incur is your responsibility. The Daily Hodl does not recommend the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment adviser. Please note that The Daily Hodl engages in affiliate marketing.
Feature image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia