Is Web3 in for a Yahoo moment this bull run?

Bruce Lee once famously said that a man who’s practiced 10,000 kicks once isn’t a worry — it’s the dude who’s practiced the same one 10,000 times who’s scary. And, as it often happens, what goes in the ring also applies to business.

Take Yahoo, once your gateway for anything on the Internet, and its loss to Google’s simple and ascetic search bar. Take MySpace, a platform for anything you, and its downfall at the hands of Facebook, at the time more limited in functionality. Take Blockbuster and Netflix, or Kodak’s decline, or any other similar story — they always come down to the same pattern: Specialization wins where a jack-of-all-trades loses.

In Web3, this principle hasn’t been working too great so far… But the tide may be turning.

The appeal of the general

For now, general-purpose blockchains built to power anything (or nothing in particular, you could say) are the top players. By market cap, Bitcoin and Ethereum still lead the way, but market cap is not the best KPI to look at here: This is more about where people build. After all, if a chain was purpose-built for a niche sector, be it gaming, NFTs, or RWAs, its success is a matter of how many relevant projects go to build there.   

As far as dApps go, Ethereum used to be the undisputed king, but now, BNB Chain has risen as a popular alternative, running more dApps than its arch-rival, as per DappRadar. BNB Chain is still very much a general-purpose one, but it offers developers enough architectural, economic, and other improvements, as well as a lot of users and a high market cap to tap into, which enabled it to compete and succeed. The same advantages appeal to any given project, no matter what Web3 sector it comes from, so the chain is home to games, DeFi services, NFT projects, and more.

And it’s not just these three chains — there’s both Ethereum’s layer-2s and various other layer-1s vying for the crown of the generalist appeal. Competing on the fundamentals, ecosystem support, and other variables, they work to establish themselves as the home for anything Web3. Some are succeeding more than others, but still, the competition is for overall dominance, not as much for a specific segment.

Enter the specialists

Now, let’s consider mission-specific chains, or blockchains built with a particular Web3 segment in mind. Don’t confuse them with application-specific such as Ronin, which only exists to power Axie Infinity, or chains like Filecoin’s, which provide a specific service layer for Web3 projects, but aren’t meant for dApp deployment. Here, we are talking about chains that are meant to host particular dApps or projects — blockchains tailored for gaming, decentralized social media, or music and entertainment.

In some sectors, such as gaming, the niche approach has only seen limited success. Most crypto games are still built on general-purpose chains, for example, not on the ones tailored for gaming. However, there is a range of sectors where purpose-built chains defy this trend due to their smart choices of focus and functionality. 

For example, the Energy Web Chain has been making headway with industry adoption due to its enterprise-tailored strategy and focus. peaq, the blockchain for real-world applications, has outpaced Solana, a major Web3 network with a market cap in billions, in its adoption by DePIN projects, even before its mainnet launch. Audius has been making headway with its user and artist adoption, advancing the Web3 push into the music and entertainment field. And these are just a few examples of what could be a colossal change of tides in the industry.

It is quite interesting to note the common thread here — all of these projects are focused on real-world business processes, services, and business models. Given the rise of RWAs as one of the most sought-after DeFi categories, and Web3’s overall apparent pivot towards the real world, the advantages these projects offer, from fundamentals on par with general chains to segment-specific economic models and benefits, could end up transforming the entire Web3 landscape. 

It is too early to spell doom and gloom for Ethereum and other major general-purpose layer-1s — just the opposite, they stand strong and will benefit from the bullish sentiment on the market. But as the crypto winter gives way, the mission-specific chains with their clear focus and laser-accurate strategies also look increasingly appealing both for investors and builders, and as they gain momentum, Web3 might indeed have its Yahoo moment. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


Source link

About The Author

Scroll to Top