Everyday, there are new concepts, ideas, and startups being made in the pursuit of business and technology, especially within Web3. With all the world’s knowledge and potential for collaboration at the tip of our fingers through the internet, the possibilities for tech founders to venture into Web3 is limitless. However, the influx of new innovations seem to have difficulty catching on in the market. Does the world have a problem with blockchain technology?

Quantity over quality

It is a known fact that 90% of startups fail within the first year, 63% not being able to start at all. Why is this the case? There are a few reasons as to why this happens such as bad marketing, lack of funding, and a misaligned vision. With web3 as an emerging industry, having more than billions of dollars worth of funding from top venture capitals, startups look to take a chunk off these investments, chasing for quantity over quality.

Additionally, overreliance on generative AI is possibly a common occurrence in startups, opting Web3 projects to take shortcuts for the sake of creating a product. Why is this the case? The speed of which blockchain technology and the crypto market progresses usually outpaces a startups’ ability to get off the ground. 

With the 4 year Bitcoin cycle being the benchmark, the bear market would flush out a large portion of Web3 startups, paving the way for newer, shinier players.

Implementing Blockchain, for the sake of Blockchain

Non-fungible tokens, Interoperability, Bridging solutions, Artificial Intelligence. These are terms we hear time and time again when new web3 projects enter the cutthroat industry. These buzzwords are meant to attract a general audience, but only seem to be effective within crypto enthusiasts. Are these new web3 products what the world needs?

While some may argue the need for most of these concepts, there has been a large amount of mediocrity that is not able to penetrate a greater audience. At the time, OpenSea, an NFT marketplace, took the world and the NFT industry by storm as it was the first of its kind. Having a user-friendly approach, even non-web3 enthusiasts were boarded into the industry. With the NFT hype subsiding, the popularity of OpenSea also declined with the value of NFT declining, as seen with Bored Ape Yacht Club NFTs going down to a floor of 12 ETH ($27,000) today compared to a floor of 153 ETH ($313,00 at the time) at its all-time high.

OpenSea changed the game for NFTs by getting the attention of retail investors. Currently, there are new NFT marketplaces such as Tensor and Magic Eden that are also catching on, but with a lack of vision to capture a larger market from a consumer’s perspective. This leaves a question or a gap for the NFT industry to solve on how they are able to approach mass adoption.

While different web3 projects certainly have different target markets, mostly with the aim to cater to already web3 enthusiasts, it is important to understand the blockchain technology has an aim of disrupting traditional industries. Real-world assets (RWA) and Decentralized Physical Infrastructure (DePIN) projects are narratives that aim to tap into a larger market, outside of cryptocurrency.

Ultimately, blockchain technology is merely a tool and a solution to solve a problem. Before one utilizes blockchain technology, they must be able to answer the question of “will this solve this problem?”. If blockchain technology is a must to solve the problem, it is also important to keep in mind that its utility must also synergize user-friendliness. If there are easier solutions to problems that do not require blockchain technology, then it is most likely Web3 isn’t a fit. However, with human ingenuity and the rapid pace of technological advancements, blockchain technology will eventually become more user-friendly and a common occurrence in solving the future’s problems.