SCENE 2023 STORY OF THE YEAR: IS THE WEB3 DREAM DEAD?

Soon Web3 was a battle cry.

The term was originally coined in 2014 by the co-founder of Ethereum Gavin Wood During the NFT boom of 2021, the future, peer-to-peer internet without gatekeepers, gained real strength.

That year, creative tech innovators—in art, fashion, journalism, film, hospitality, you name it—adopted Web3 as a coat of arms, poised to defeat and penetrate the highly centralized forces that controlled the global economy. A new era of decentralized and democratized prosperity for consumers and creators alike.

Using blockchain technology, these dreamers thought, they could. Flipping Hollywood. They could. Dolce & Gabbana victory. You can even help likes and push back. Tech giants like Meta. The stakes of this conflict have been nothing short of existential: some Web3 industry leaders liken it to a. War with feudal rulers. Web 3 startups regularly call out fighting and fighting talk:“War” “revolution”– To emphasize this ethic.

But recently, leaders of the Web3 community have begun to openly question whether the revolution has lost its way. 2023, one of the crypto's Very difficult yearsundoubtedly was. Full of Sacrifice. For some, those may constitute Web3's founding principles.

“I think what we've seen at Web 3 this year is that survival takes precedence over ethics,” said Danny Loftus, founder of the digital fashion platform. DropsHe told him Decrypt. “a lot [companies] They risked fighting for their livesWAGMIA notion of ‘success' or ‘keeping them afloat' for any metrics. The compromise that many have made to survive is likely to be entrenched.

Interestingly, at least on paper, Web3 is doing better than ever. from Disney to the MoMA to the Mercedes to the Gucci to the Visa to the StarbucksThere is hardly a major Web2 company this year that hasn't done some kind of Web3 or explored the opportunity internally.

That's a big change from two years ago. What's more, most of these companies don't seem to have come out with Web3 – many of them have. Years-long road maps For their projects supported by blockchain and they have established many Corporate infrastructure To support those efforts in the long run.

But while that support from established companies bolstered Web3's hopes this year, it also came with some ideological costs. Most Web3 projects taken on by large corporations have not actually redistributed wealth, influence, or opportunity in a meaningful way — as the technology's early proponents once sought.

These projects have instead given birth to new customers Loyalty programsalone Drops of goodsAnd Product packaging. Creativity, of course. But it is not materially revolutionary.

As for Web3-native startups, many seem to be reticent when it comes to Web2's archenemy. When Apple reveals the reality of the immersive mix vision pro Headphones in June, Open metaverse Advocates—a core part of Web3 Pure People—He celebrated the news As a big step forward.

They were the same people from months ago. He declared open war Trying to control metavas by organizational importance on the meta. Meta CEO Mark Zuckerberg has at least tried to create his Web3 ambitions. Mild congestion To the public of the open metaverse; Apple's approach to Web 3 can be summarized as follows. Doesn't sound good, In the worst hostility.

So has Web3 dropped its tools? Is it to leave the rebellion behind and join the status quo?

Nihar Neelakanti, an entrepreneur who founded a blockchain-powered carbon emissions startup EcosapiensMuch of this recent change in tune at Web3 can be attributed to the brutal changes that have taken place in the fundraising landscape over the past year.

“I've been around startups all my life,” Neelakanti said, “and before that, V.C Decrypt. “I've never heard an investor ask a seed, Series A, or Series B company to seek profitability. until now.”

“That's not how startups operate,” he continued. “Questioning race is absurd. [or] Series A. It's even harder when you're a Web3 company.”

Neelakanti says he has run out of patience with crypto-related companies from VC firms following incidents like these. Failure of FTX Last November. Investors now want an immediate return on their investment, says Nelakanti—which means Web3 companies don't have the luxury of pursuing lofty goals like reshaping consumer habits or educating users on the benefits of decentralization. Now they have to make money.

For most struggling Web 3 startups, the path to black is selling services to established brands and companies—which, according to Nelakanti, have no interest in changing anything other than their bottom line and nothing to do with such contracts. “crypto” “NFT” Or “metaverse.”

“People in these companies talk [to Web3 startups]'My boss is going to shoot me if I mention the word NFT or Web3,' said Nelakanti.

That brings things full circle. That's not all that harsh financial realities have turned the Web3 startups into one-time adversaries with no chance of survival. These novices have often been forced to swallow their ideological principles in the name of living another day.

Emma-Jane McKinnon-Lee, founder of the digital fashion startup Digitalaxstates that the Web3 ecosystem's current reliance on venture capital is preventing the sector from realizing its revolutionary potential.

“We can't have any third-party player gloating about controlling bottlenecks,” she said. Decrypt. “This means making VC obsolete before Web3 is finally viable.”

So Web3 now finds itself going through a bit of a coming-of-age transition—from idealistic adolescence to the rough streets of the real world. Balancing the democratizing potential of technology with tangible profitability will always be a high-wire act, but the harsh economic realities of 2023 seem to have them moving forward faster than many expected.

Not everyone in space sees things as black and white, though. Co-founded entertainment executive JP Alanis HistoryWeb3, a platform for creating and engaging immersive, movie-like experiences, says it never set out to set Hollywood on fire.

But he believes that by giving Web3 the resources to attract top writers, actors and producers to lesser-known creators, he can pave the way for a better and more equitable entertainment industry.

“The reality is that it was never intended to completely replace Web3 [existing systems]” said Alanis. Decrypt. It is meant to supplement, supplement and fill gaps in the existing system.

But solving some real problems, in our case, how superfans engage and interact with content and who helps create that content, “could lead to a big change.”

All in all, it seems that many Web3 creators do not wish for a bloody victory in a multi-front holy war with the likes of Netflix, Apple and Louis Vuitton.

Maybe that's giving up or maybe it's growing.

Edited by Andrew Hayward.