What’s next in web3

What’s next in web3? 🧵

First, where are we today? Let’s start with some anecdotes.

We have an awesome games team led by @Tocelot that invests in founders out of top game studios like Riot, Epic, Blizzard etc. Almost 100% of founders they've met with recently are exploring NFTs in some way, or are already building NFTs into their games

I get regular emails like this from web2 founders (this is verbatim the other day from a top web2 founder) “Hey Chris, hope all is well. I’m going deeper on crypto and now understand why it’s so exciting.” I expect others in web3 are seeing a similar wave of new talent entering.

Last week I tweeted out this half-joking tweet that led to over 250 web2-to-web3 job applications.

Our portfolio companies report a similar uptick in resumes from people who want to migrate from web2 to web3.

Now some numbers. Coinbase has 68 million verified users coinbase.com/about.

They recently announced a new NFT product and already have 2.4M users on the waitlist.

Axie Infinity reported 1.8M daily active users in August and generated $2.6B in total sales volume since launch, despite being blocked by all the web2 app stores including Google and Apple mobile stores. coindesk.com/business/2021/…

MetaMask, the popular Ethereum wallet, has over 10M monthly active users. markets.businessinsider.com/news/currencie…

OpenSea has generated over $9B in GMV selling NFTs this year dune.xyz/rchen8/opensea

For context, YouTube paid out $30B total over the last 3 years to all creators on their platform.

Other social platforms like Facebook, Twitter, and Instagram don’t share revenue with creators. You do get hearts though :)

So what's next for web3?

Expect many NFT-based games to launch, developed by founders with backgrounds at top game studios. Some of these will launch as soon as next month, others will take longer.

Expect many more creators to embrace NFTs in their own communities as they discover how much better they can monetize by selling digital goods directly to their fans vs banner ads and other web2 monetization methods.

New web3 users who earn tokens through games and NFTs will likely choose to save those tokens in DeFi protocols vs tradfi banks given the better rates and user experience, growing the number of DeFi users.

Web3 infrastructure will continue to improve, with the continued improvement and growth of non-Ethereum L1s and Ethereum L2s. The Ethereum merge will hopefully happen in Q1 22. This will improve performance and also remove the environmental objection to using Ethereum.

Expect many more experiments with DAOs, social tokens, decentralized social networks, web3 media, and other emerging categories. Some of these might break out the way NFTs and web3 games did earlier this year.

It’s an exciting time to be in web3. If you want to get involved, there are many job openings at web3 companies. Email us at web3-jobs@a16z.com

(Disclosure: none of the above should be taken as investment advice and a16z portfolio companies are referenced; see http://a16z.com/disclosures for more info)


Originally published on October 23, 2021

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