Myth of the Web3 Infrastructure Stage

Recently, in my conversations with many Web3 practitioners and investors, I learned that the promotion of Web3 is still hindered by the lack of infrastructure. People generally believe that we need better wallets, Alt L1s (alternative Layer 1 solutions like NEAR, Solana, etc.), Rollups, Rollup-based Rollups (referring to Base Chains based on the OP Stack), multi-chain bridges, Web3 native growth tools, and so on. However, in reality, the biggest problem faced by most infrastructure teams is the lack of enough consumer teams to build excellent downstream applications. Five years ago (!), Dani Grant and Nick Grossman of USV mentioned in their post “The Myth of the Infrastructure Phase”:

In the Web3 community, there is a common belief that we are currently in the infrastructure phase and we need to build better base chains, better inter-chain interoperability, better clients, wallets, and browsers. The core idea is that we need tools that allow us to easily build and use applications running on the blockchain. Once we have these tools, we can start building these applications.

However, when talking to founders who are building infrastructure, we constantly hear that their biggest challenge is how to attract developers to build applications on this infrastructure.

The prevailing view now is that new computing platforms start with a discrete infrastructure phase and then form an application ecosystem. However, in reality, new computing platforms often start with killer applications, which in turn tell us what type of infrastructure we need to build, and then start the “application <> infrastructure cycle”.

The Myth of The Infrastructure Phase

I believe this framework explains the subtle relationship between current Web3 consumer products and infrastructure. We need more teams to build at the consumer layer, which will tell us what infrastructure people really need. Undeniably, better access processes and cheaper transaction fees will give birth to new consumer products, but looking at the present, the infrastructure we have today is already sufficient to create some remarkable products and experiences.

For example, the examples of Reddit Collectibles and Nike .SWOOSH have already proven that traditional consumer brands can also create explosive products under the existing infrastructure. At the same time, SoRare and Immortal Game have achieved some success by combining existing products (such as fantasy sports and chess) with Web3 elements, offering unique value propositions (ownership of in-game assets).

But the fact is, in the past few years, the fastest-growing Web3 consumer products have mainly been driven by speculation, including exchanges, NFT markets, wallets, games, and NFT projects. However, this phase has already ended (due to rising interest rates and other macro factors). Speculation is not always a bad thing. In fact, we often need speculators to stimulate interest and investment in new technologies.

However, the future of the Web3 consumer market requires building engaging products and experiences (I know, it’s a radical idea). Over time, most people may not even realize that they are interacting with blockchain or tokens. They may simply refer to Web3 elements as digital collectibles, points, badges, membership cards, or any other consumer-friendly term.

For example, here are some products and experiences that excite me in the coming years:

  • Games where millions of players collect and trade in-game assets as NFTs

  • Web3 brands and creators building communities with millions of NFT holders

  • Web3 IP spreading through media and entertainment industries

  • Community-driven record labels nurturing the next generation of top artists

  • Web2 brands offering fun, novel, and game-like experiences built with NFTs

  • Physical products with NFC chips that unlock digital experiences through scanning

New infrastructure will undoubtedly help make these experiences simpler, more scalable, and more cost-effective. However, the future of Web3 depends on outstanding teams building products and experiences that consumers will ultimately understand and love.

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