Backdrop and why build in Web3 & Blockchains ?
After exiting Shunya mid April 2021, I learnt a lot a things, but most important of those that if you catch a market by the tail, as it is well formed and more or less organized - its that much more harder to out-innovate and out muscle the competitive offerings - which for lesser mortals (non-serial entrepreneurs) makes it that much more harder on the right to win.
So, as I kept my ears to the ground on what next to build, web3 theme, kept crosscutting and it met the following bar, as seen from a personal lens.
1/ The space was ripe for large scale innovation and Blockchains in particular, will form the basis of a whole new world economy
2/ I see myself as co-building at least 2 companies over the next 22+ professional years, so assuming 1/ , this gives a future room to build a second one in the space
I am writing this post, as I keep getting - “How do I get started in web3” and “what are the applications being built in it”. It took me ~2 months to put this together and most weekends when I was talking to operators, builders & VC’s. Hope this is useful.
Thesis on web3 at large
Let’s assume a world where digitally programmable currency & identity becomes a mainstream asset class & offering. Similar to other assets like fiat currency, commodities (Gold, coal etc) - a set of instruments will be born on it - some of which are already taking shape . The same applies to identity space, where people's lives will be lived on a new internet , and to maintain that identity a set of offerings will evolve (much like Adtech in web2 to monetize those, but by the "owners" of that identity. Along with this, Full stack applications, Ops & Support will be needed to support the economy for different set of actors in the ecosystem will be needed.
But the most important impact of Blockchains & crypto will be actually increasing the true GDP and a new world order . For people who think crypto is just a bubble and would fizzle off , we first need to understand how we got here. The origins of Petrodollar, the M1 and M2 money supply and that for economically weaker countries it opens up immense possibilities of doing business and expanding the true wealth of nations.
Eg : If a firm wants to do Business in economically unstable regions like Africa - and it do so by decoupling itself from the sovereign currency - which is where Crypto/Defi use cases shine.
This episode, in particular, gives a very good sense of how we got here
Applications in Web3
Jobs, people & upskilling
People who understand the unit of currency, the trading parameters programming smart contracts. In an ideal usecase, the companies will do this to build, support & scale their own platforms & hence build ecosystem flywheels. Ex: here from Web3 university from Alchemy. Think Facebook/Google/AMZ solution engineering, or old world SAP consultants. See also
Building Communities around that and monetizing communities such as Crypto Saturdays(Much like how baby communities etc are monetized )
This can take several forms, or all of it.
Social network
Job boards
Marketplace for quests
Education
Mining
Access to trading via leased/on demand hardware, and full stack Infrastructure - much like AWS for cloud computing
Discovering the blockchain/ coins to mine, analyzing the economics efficiency frontier for different blockchain with mining pool/solo combinations and Income estimates & profitability of hardware(ASIC) to mine , and actually procuring it through a vendor/retail
Setting up actual physical infrastructure & running benchmarking on it at scale
Better tech infrastructure & watch dogs for miners to mine in the economically, autonomously with self remioadiation effect manner (Eg : Hive Os)
Platform layer
Browsers with built in wallets (Brave + metamask), Opera - that have attention constructs (BAT tokens) - and remember the entire context of the user anonymously (Like, Shares, view history, analytics )
Hardware wallets eg ledger
Ad stack & vertical monetization opportunities - Ability of users to be able to trade their information - eg : Health data for opt in research
Shared productivity applications - eg “calendars” that sync across multiple calendars & applications - to make sharing safe
Decentralized Networking infrastructure eg Helium Anyone can buy a wifi router like device which can provide internet to around 10km radius. Users pay through crypto based on data usage.
Decentralized social network eg Deso
Decentralized search engine eg Customata
Decentralized version of AWS eg
Bridging web2 Services & marketplaces
Circular crypto economy - Bitrefill allows you to spend crypto without kyc . Basically access Uber, Zomato, Movie theaters, Flight tickets etc by buying vouchers. Essentially a twist on the affiliate & coupons marketing businesses.
Including IPFS(Replaces https) in Web3 ecosystem. Fleek is trying to monetize it and is doing very well. It is creating a deployment pipeline with web3 stack
Trading
Financial & quantitative trading instruments to make money while holding (much like Fixed deposits do) via ether/other coins as collateral (ex: liquidity.fi), arbitrage strategies & bots
Hedging & market corrections tools (Eg: Crypto winter , Crypto half life , programed synthetic circulation constructs by raising the difficult level of hash to control price inflations )
Transaction management
Better transactional infra(Lightning Network, and this) for scaling the blockchains with layer 2 blockchains
The Bitcoin network processed just under four transactions per second as of August 2020, with transactions logged in the blockchain every 10 minutes. By comparison, Visa can process somewhere around 65,000 transactions per second
Inter exchange arbitrage opportunities , incl coin swapping
Payments, Cash back rewards & partnerships
Payments - Integrating the Web2 payments to include Crypto. The current problem is getting money from your bank and the traditional model of placing limit orders in app(Think Old school stock trading) - this is wasteful and with crypto volatility the money ends up being undeployed on these platforms for a very long time , esp for passive investors. A single platform that can transact through Web2 nuances seamlessly on Crypto is needed.
Eg : stripe - Integrating offline & commerce merchants to accept coins helping accelerate the exchange value
Rewards - In india alone 8500 Cr of unused cashback rewards is lying around and there needs to be a central frictionless mechanism to convert it into a widely accepted asset class (Cash & crypto can be this) to drive deeper data points and widen the incentive led, BYPL etc commerce classes. This esp for Hospitality(Airlines) etc has a lot of financial impact - and is a pressing problem that impacts scale by marquee partnerships and opaque conversion schemes of cashbacks.
Applications & Tooling in DAO
Building organizations autonomously
Future of work to couple skills fto belong to only one organization that are “leased” for a definitive amount of time - what does it mean for proprietary information, competition, hiring space , talent wars etc.
Tooling to “measure” the work - besides the hierarchical voting constructs for which the DAO’s are great at leveraging communities.
Data Science applications to increase transaction speed, mining more efficient
Basis data from BTC.com, Pooling, ViaBTC, and Foundry , or equivalent
Trust & social media
Pseudonymous social media N/W’s - much like this
E Governance to help manage the capital by governance , to prevent identify theft , mixed SSO applications to orchestrate identity selectively
Validator as a service. See audit - one of the largest VAAS in Asia with around 500mn$ TVL
Smart contract security audits : (huge profit making sub sector)
Eg, Consensys audits, Certik, Zokoyo audits
On-Chain analysis tools like Glassnode, crypto quant
Web2 applications enhanced
Calendars shared with Zero knowledge proofs. Ironically booking a schedule still continues to be broken even after Calendly etc
Gaming & poker
NFT marketplaces
Platform play to enable brands to launch NFT's - think of it like a shopify for NFT's . Bring your own assets and the everything else is taken care of.
Metaverse , upskilling, digital twins , gaming , remote presence
Tokenomics for creator economy
Helping creators own their art and monetize their users with distinctive coins . Liquidity & perception of the coin for real commerce & value exchange is an stopping function to scale.
User-generated content at scale
User interviews notes
Here are some notes from conversations of product folks , building companies, challenges etc. Original link here . Credits
Jarrad (Status.im)
Afri (Parity)
Thibaut (Parity)
Madeof_Tin (Tennagraph)
Tim Beiko (PegaSys)
Griff Green (Giveth)
Tobias Schubotz (Gnosis)
Notes here
Exploring Status’s struggles of growing with co-founder Jarrad Hope here
Learning about Parity’s programmer anarchy with release manager: Afri Schoedon here
Learning about Parity’s role of Product owner in Parity with Thibaut here
Differences of working in deeper r&d tech startup vs. Ethereum client r&d with Tim Beiko here
Challenges of grassroots open source projects with Madeof_Tin from TennaGraph here
Flat holacracy organization models with Griff Green from Giveth, here
Business models and product management of Gnosis Safe with Tobias Schubotz from Gnosis. See also here
Img src (cover) here