🌌 Intro
The main purpose of this article is to highlight some of the most prevalent issues that I have personally encountered during my involvement with web3 or decentralized ledger technology (DLT) projects. This includes working with startups, products, and other related ventures. By pinpointing the root causes of some issues, the goal is to help the industry, both at the project level and as an industry, work to identify solutions.
🧩 Table Of Contents
📉 Capitulation
From 2020 to 2022, the web3 space experienced exponential growth: crypto, gamefi, defi, and NFTS, each activating users and keeping them engaged through the pandemic with high-yields and returns. This is a phenomenon unprecedented since the .com bubble of the late 1990s and early 2000s.
Quantitative easing led to returns across all sectors as free cash flowed through our financial system. Using the S&P 500 as a reference, markets were artificially supported by cheap dollars.
Over the same period, QE dollars were allocated to Distributed Ledger Technologies, including cryptocurrencies, NFTs, Defi, and GameFi. Earnings were reinvested in new projects, networks, ecosystems, and startups with high valuations, returns, and newly acquired and activated customers. Early in 2021, several projects were funded that, in retrospect, probably weren’t the best investments.
When the world economy shifts from bull to bear in April of 2022, the highly volatile and speculative web3 market suffers severe damage. Economists and analysts will find this period to be an enigma, challenging all assumptions about economics, monetary and fiscal policy.
😵💫 Process Breakdowns
Overall, the tech industry and Silicon Valley champion innovation throughout all their divisions and business verticals. For the web3 domain to attain long-lasting prosperity and provide true value to each customer segment, from the end users to the developers, prioritizing process innovation is crucial, or can even be viewed as critical for the overall well-being of the industry moving forward.
As far as I am concerned, web 3.0 startups can be divided into two categories: process-based startups and freefalling startups. As for the former, these are companies that are founded on sound fundamentals, they’ve done the necessary due diligence, and they’re using the same process innovations they’ve learned from working in web2 before their current venture or have gained as a means of ensuring success or hitting their goals.
🤼♂️ Blockchain and web3 Team Dynamics
I would like to call attention to one noticeable trend to support my previous statements based on anecdotes and empirical evidence. The amount of talent that has completely devoted themselves to web3 is truly astounding. Hedgefund quants to 10x engineers are solving some of the most challenging technical and business problems of this century and working vigorously to achieve their goals.
In the era of profit-seeking-mania, it’s hard to blame teams for not adhering to long-term strategies, since following is human nature, and teams were simply following working styles that they viewed as the norm. Individuals of this level of talent being considered in the same context as all web3 talents seem unfair, but it’s worth considering in order to make a point and provide some insight into the industry’s future.
🌐 Web3 value proposition for developing economies
I spent a considerable amount of time working on team development and hiring while I was at GalacticWay. Due to this experience, I have built long-term working relationships with some of the most astute intellectuals from around the world and from every continent. Among them is a Nigerian.
In spite of having the largest population on the continent, Nigeria has experienced a weakening economy, political corruption, and local-level political issues delegated to local governors. In addition to being a crucial part of the overall development and stability of the region, the Nigerian economy has become a powerhouse for outsourcing technology and scientific workers. By uniting around alternative education, foreign investment, and collaboration, the continent can set the standard for what is to come.
In the future, the success and prosperity of his nation and its people will be greatly influenced by decentralization, blockchain, and more prevalent tokenized economies, as shared by this comrade who has now become a friend. The existing financial and political systems within his country, at both local and federal levels, are untrustworthy. Numerous individuals from comparable developing regions concur with this sentiment, considering decentralization, blockchains, and token economies as a method to liberate their communities from corruption, currency debasement, inflation, etc.
🙌 Blockchain and Web3 team development
It is imperative that the industry considers the average tech worker and what will continue to attract talent to the space in order to achieve mainstream adoption and retention of Web3 technologies. Rather than focusing on rapid returns, long-term roadmaps aim to build a better, more democratized future for consumers and internet users. In order for Web3 startups to become mainstream, they must be integrated into the traditional technology industry.
⌛ Time Horizons & Roadmaps
In every generation, new technologies have created wealth by solving specific business problems. As we look back on web3, I believe this generation has an opportunity to achieve a similar level of success– As someone who has firsthand experience building dApps, I was taken aback by the rapid rate at which people are attempting to ship solutions to problems in search of quick returns, which goes back to a previous point I made in this post regarding team dynamics.
When you build a blockchain-based dApp on a network like Ethereum (ETH), movements in the underlying Ethereum value directly affect how the applications are built. We have to solve problems like this as an industry.
Teams without long-term vision and strategies will default to making decisions based on profit-seeking behavior in the face of an ever-persistent profit incentive. We must begin viewing blockchain-based services and dApps as long-term visions and strategies, divorced from profit-seeking, visceral reactions, as a result of the recent capitulation and subsequent insolvencies.
📈 Web3.0 Change-Enablement - Proposing Solutions
A consideration for the teams and companies looking to affect change within the web3.0 space is change-enabelment innitatives that prioritize company-wide changes due to a critical challenge or event. In this case, working our way out of the most severe period of large-scale banctruptcies within blockchain and crypto, with teams, networks, and projects becoming insolvemt overnight.
Several decentralized-ledger technology projects, DAOs, crypto, blockchain, etc, are using agile development methods to manage their release cycles. A similar approach can be used to affect change within an industry.
Control Theory is an additional tool that can be used at the industry level and is something veteran DAO members and leaders might consider championing within their companies and teams – We must now turn these procedures into the basis for how teams work in web3.0, something that will require a lot of work, but is certainly possible if we work together.
It may be worth reviewing a minimum viable solution to the change-enablement problem space and building out a white-paper, including an execution strategy - This can take place within DAOs or through leaders within the space.
Based on feedback and multiple iterations, the web3.0 industry can collectively determine the best path forward - Almost like a business and project-level standard, similarly to Agile and SCRUM, but something that is desiged specifiically for web3.0 business needs and the unique requirements and challenges. Regulatory changes will also force teams to adhere to higher standards, which can further speed up this process.
Due to the current market conditions, I anticipate much of what we were seeing between 2020 and 2022 will abate; the profit-seeking teams will be swept away into the ether by a powerful wave, and will forever be viewed as everything that was wrong with web3.0 before 2023.
In a follow-up article, I will cover the themes discussed in this section in more detail and brevity, titled Web 3.0 Change Enablement, so stay tuned for that piece sometime in early 2023.
🌍 🎖️ Final Thoughts
In this article, we examined a few themes that can be regarded as some of the most urgent systemic challenges within the web3 industry, such as the overall capitulation in both web3 and traditional markets in 2022, as well as a blockchains value proposition in emerging markets as a way to support some of the topics being covered in succession. We also unpacked team dynamics, process breakdowns, and a chart to visualize the web3 activation curve between 2019 - 2021.
The second part of the article reviewed time horizons and long-term roadmaps, including the market’s ability to influence and even govern the behaviors of individual actors within a specific blockchain network. And lastly, we outline the web3 change enablement problem space to help define industry standards to assist at both an industry level and the project level.
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