More and more ‘old school’ web 2.0 tech giants are facing stiff competition from Web3 decentralized companies. As we can see below, Audius is giving Spotify a run for its money. Companies and Venture Capitalists are now, more than ever, ready to put their hands in their pockets to stump up funding for companies using blockchain technology.
Last year saw $380 million in 93 deals go to companies that describe themselves as Web3 start-ups, a massive spike from just $20.5 million in 30 deals in 2020. Blockchain-based companies that use “Web3” and the “decentralized web” in their descriptions have obviously seen a significant jump in funding up to 2022.
Venture capitalists worldwide are beginning to pitch their tents with Web3.0 startups. India, Pakistan, and several European countries have seen a surge in Web3 projects in the past months, and this is just the beginning of what is to come. Despite its sketchiness, the Web3 space is increasingly garnering investor interest and receiving huge investments.
For context, blockchain-related startups, Web3 startups inclusive, amassed over 17 billion dollars in investments in 2021; that’s about 9x the venture funding in 2020.
In 2022, these blockchain “web3” startups have already received above $3.6 billion, surpassing last year’s record pace. In other words, the figures are expected to be larger this year.
More specifically, funding to Web3 companies in 2020 was about USD 20 million in 30 deals, while 2021 saw investments rise to USD 380 million in 93 deals.
In the first quarter of 2022, over USD 173 million has already been vested into Web3.0 startups, showing that the somewhat vaguely defined concept is gaining massive capital investments.
With the massive funding flowing into the Web3 ecosystem, it remains to be seen if the technology will eliminate the deficiencies of Web2.0.
Let’s get into some more details about Web3 and Web3 startups.
What is Web3?
Web3 or Web3.0 is the 3rd gen of the world wide web that describes the concept of decentralized and permissionless internet services powered by blockchain technology, artificial intelligence, semantic web, and machine learning. The goal of Web3 is to create applications and websites that are more intelligent, user-centric, open, and connected.
The design of Web3 is intended to break users out of the monopoly of tech giants such as Meta, Microsoft, and Google, that rake in enormous profits from user data. The graphics below trace the progression from Web 2.0 to Web 3.0:
Web3 analogs (from left to right): Showtime, Audius, Mirror, Bitclout, Filecoin & Arweave, Livepeer, The Graph, Decentraland
So that’s what Web3 is all about – a decentralized internet that runs on a public blockchain, which is also used for cryptocurrency transactions. Under Web3, the Internet is shared online and governed by the collective “we,” rather than owned by centralized entities. Some familiar interpretations include:
- The Web3 world is one that has open-source protocols at its foundation. Web3 is about rearchitecting internet services and products so that they benefit people rather than entities.
- Blockchain runs on smart contracts, which are based on a set of protocols that differ from one blockchain to another. For example, Solana has a different protocol from Ethereum. These protocols need to be satisfied before services can be run on them.
- The technology is poised to usher in an era where internet users have unrestricted control of their data and earn compensations for sharing them. Users will also enjoy human-Esque interactions and tailored experiences with websites and machines.
- Some of the advantages of Web3.0 include intensified data processing, improved data control & privacy, seamless services, stress-free data accessibility, transparency, restrictionless access, etc.
Web3 Startups making waves in 2022
Ventures capitalists, business leaders, and CEOs across several industries are actively discussing and evaluating the impact of Web3 on their enterprises and the opportunities that come with the Internet’s 3rd gen.
In line with these developments, many Web3.0 startups are already leading the way towards achieving a decentralized and more tech-driven internet. The growing popularity of digital assets (cryptocurrencies), DApps, and the blockchain fuel the Web3.0 movement.
Here are some of the top Web3 startups that are championing the revolutionization of the web in 2022.
Polygon is an Ethereum-scaling platform that is making waves in the Web3 space. It is renowned for facilitating the development of secure and scalable DApps with cheaper transaction fees. In its first round of institutional funding on February 7, 2022, Polygon raised $450 million.
According to Sandeep Naiwal, the Company’s co-founder, “funding the Polygon ecosystem is key because it helps early-stage startups to continue building on the network.” He also added that making India a Web3 superpower is at the core of Polygon’s mission.
Polygon remains India’s largest crypto project, and its developments team comprises passionate and dedicated professionals who actively contribute to the proliferation of a transparent, seamless, and decentralized future.
Decenternet, coined from “Decentralized Internet,” is a Web3 startup based in Hong Kong. The company offers its users a Web3.0 net-neutral blockchain-based internet browser known as Osiris. The browser provides high-speed internet browsing, zero intrusive ads, a built-in VPN, and zero web activity tracking.
Terra is an open-source blockchain-based platform for financial DApps. It features a decentralized financial infrastructure and offers a valuable stablecoin for payments. Terra is in partnership with Near protocol to propagate the growth of web3 through collaborative projects and deep layer integrations.
ConsenSys is another company that is recently leading the charge for developing Web3.0 and its integration across blockchain applications and industries. ConsenSys offers a platform for the development of DApps and Ethereum-focused end-user tools.
Biconomy offers a transaction protocol usable across multiple blockchains. The end goal of this cross-chain protocol is to offer businesses APIs that are readily implementable in other to simplify transactions through a decentralized payment gateway. Recently, Biconomy became partners with WazirX to facilitate the increased adoption of Web3.
Except you live under the rock, you must have heard of Brave. Brave is a fast-growing Web3 internet browser with an adblocker, improved data privacy, and a smooth user experience. The browser features blockchain integrations and has its native coin, known as BAT.
Huddle01 is another Web3 startup focused on integrating Web3.0 and the blockchain with real-time communication. The company wants to improve the connectivity of video calls by reducing latency. Huddle01 aims to achieve this feat through a decentralized video conferencing framework powered by Web3.0.
What do Web3 Startups offer?
The Semantic Web is not a separate Web but an extension of the current one, in which information is given well-defined meaning, better-enabling computers and people to work in cooperation.
- Businesses would be highly user-centric and transparent due to their decentralized structure.
- Users would be able to take control of their data and privacy.
- Business owners would have to adapt blockchain technologies to ensure data transparency and open access.
Some Predictions by Web3 Supporters
Ian Lee, Co-Founder of Syndicate, predicts that Web 3.0 and Web 2.0 technologies will continue to overlap as the parts and layers of a specific product are built on both types of technology. Web 3.0 primarily relates to the economic, ownership, access, and composability models.
Jai Bhavnani, Rari Capital Co-Founder, believes that in 2022, there will be a substantial token-driven phenomenon. They’ll be everywhere. People will be experimenting with them all the time. Tokens will be used in group chats and other social media activities.
The world is gradually moving towards a blockchain-powered internet era that promotes user data’s transparent and honest utilization. With Web3.0, the Internet is poised to become more interactive and immersive, and users can permit their data to be used or not.
You can’t afford to be outdated these days. You have to make your business decisions carefully, keeping in mind that the future is here and continuously renewing. Based on your industry, try to acquire 3D assets.- If you have a retail eCommerce business, try to create 3D models or virtual reality stores.
The Web3 space is exciting; further developments are expected to continue, especially with the massive traction and institutional funding the technology is currently receiving. The new Internet could be here sooner than we think.
FAQs about Web3
Which companies currently use Web3?
There are several companies already exploring the Web3.0 idea. We have provided a few above. Others include Binance, Coinbase, Ripple, KoineArth, BitPay, GanTree, Swash, Crucible Network, etc.
Is Web3 open source?
As with several blockchain-based protocols, Web3 is open-source and decentralized.
Is Web3 decentralized?
By concept, Web3 is decentralized. However, some think it is already centralized and owned by venture capitalists.
How will Web3 improve user experience on the Internet?
With Web3, users can expect enhanced web usability, richer user experience, better search, and personalized internet browsing experience.
What are some Web3 applications?
Some general Web3 applications include:
Wolfram Alpha leverages computational intelligence to satisfy user search queries by gathering information across the database of several apps and academic fields. It was formerly based on Web2 but now runs on Web3. The integration of Web3 with the platform has significantly improved the accuracy and speed of search results.
Ethlance is an Ethereum-based Web3 remote job platform that allows anyone to hire or work in exchange for ETH.
Other applications include Steemit, IDEX, Sola, Storj, Everledger, LBRY, etc.