The market forces projects to return to practical applications. Web3 urgently needs to leave the speculators' carnival.

Author: Wu Tianyi, DeThings

It’s another year of Singapore Token2049, and the Merlion is looking forward to it every year resemblance. But unlike previous events, this year against the backdrop of a bleak industry landscape, "Mass Adoption" has become the most frequently used phrase during this 2049 period. Different from the previous context of "good vision", The word was mentioned again in this round of market, with a hint of imminence - only "To C" can save the market.

The market environment is becoming increasingly severe. The performance of the previous cycle was poor, LPs became more cautious about risks, and VCs became more stringent in selecting entrepreneurs, further increasing the difficulty of financing. At the same time, listing conditions on exchanges continue to tighten, industry confidence has been dampened, and project valuations have generally declined. In addition, the user activity of the Web3 project has dropped significantly, and the airdrop strategy is not effective, making it difficult to effectively retain users.

In this context, the project team began to gradually return to real applications. If a real application wants to reach users, it must open up the "last mile" - this is true both online and offline. It not only needs to work hard on deposits, withdrawals, and payments, but also needs to truly reach offline stores and cover the consumption scenarios of ordinary users. .

The market is forcing the project team to return to practical applications

During the conference, Tada taxi hailing on Telegram Robots can be said to be the Web3 applications closest to "Mass Adoption" and covering real scenarios. The reason for using it is also very simple. New users have a free credit of SGD 60 and a subsequent 50% discount. To use this Bot, you need to connect to an encrypted wallet and use USDT or TON for payment.

For a "crypto person", this is simple. But for other users, they need to register an encrypted wallet, convert fiat currency into cryptocurrency, and then connect the encrypted wallet to the application. Compared with other taxi-hailing apps that only require a credit card to be bound, how many users are willing to "enter" the crypto world when there is no discount?

In 2023, there will be 617 million global cryptocurrency holders, not just growth, but saturation. The industry is facing a threshold similar to Tada. How to let people who have never been exposed to the encryption industry enter is the key to mass adoption.

However, during this 2049 period, we can see that Internet thinking is "invading" Web3, and this is a manifestation of the emphasis on users. “Every time a user clicks on an interface, their desire to consume will be reduced by 20-30%.” A founder of a payment project told me in an interview. Another founder of the Depin project said, "Users don't care about the Web. We have to make a useful product first." This is the consensus of the Internet industry, but there have been few similar voices in the Web3 field before.

Financial-level actions can no longer satisfy the current market. When Ethereum founder Vitalik faded away from the almost religious idol fanaticism, he was replaced by Ethereum and DeFi. downturn in the field. The way to attract financing using white papers and PPTs is no longer feasible, and the industry urgently needs to return to practical applications.

In addition, "Mass Adoption" not only needs to open up the "last mile" for users to enter Web3, but also puts forward higher requirements for infrastructure construction. Therefore, projects in Depin, RWA, stablecoin, payment and other fields began to explode. At the same time, the savings, payments, loans, and investments represented by these areas cannot be limited to isolated systems, but must be closely integrated.

Giant's response

Combined with practical applications and user thinking, more and more industries The giants responded. One of the hot topics at this conference, "PayFi" proposed by Lily, President of the Solana Foundation, is a good example. Similar to it is the "consumer application" mentioned in the speech of Ethereum founder Vitalik. The core of PayFi is around the sending, receiving and settlement process of cryptocurrency, not the transaction behavior. It emphasizes the "time value of money", that is, due to factors such as opportunity costs and interest rates, current currency is more valuable than currency of the same value in the future.

What PayFi wants to do is to help users maximize the time value of currency. For example, Buy Now Pay Never uses the time value of currency to pay. Creator Realization and accounts receivable obtain current money by paying the time value of money.

This model truly moves away from the speculation-driven approach to cryptocurrency adoption. It not only covers cryptocurrency payments and transactions, but also includes various financial activities such as lending, financial management, and cross-border payments. Through decentralized technology, PayFi makes financial activities faster and safer, and reduces friction and costs in the traditional financial system, thereby promoting seamless value transfer and financial inclusion on a global scale.

This concept puts forward higher requirements for current blockchain technology. As transaction volume surges, the Solana network may experience congestion, leading to Transaction speed drops. Second, Solana is currently achieving only 1.6% of its theoretical maximum speed of 65,000 TPS. Additionally, between January 2022 and February 2023, Solana experienced outages in seven out of 13 months, with outage events lasting longer than 24 hours. Solana also experienced an outage in February this year. This would not be acceptable if it were the current large banks or multinational payment networks in the Web2 space.

Not only that, if you want to realize PayFi or "consumer application", online consumption alone is far from enough. We also need to get through the “last mile” in the physical sense. Taking Web2 institutions such as Visa and Alipay as examples, the final scenario for large-scale application is that users can use Visa's POS machine or Alipay's QR code to pay conveniently in offline stores. Mass adoption will only be possible when crypto applications reach offline.

Even if you want to truly realize the meaning of Web3, that is, the "next generation Internet", just use dApp or encrypted credit card to make convenient offline and online payments. Not enough. Instead, while users are consuming, their cryptocurrency is stored on the chain and circulates without obstacles. At the same time, it generates income through lending projects. The friction of deposits and withdrawals is greatly reduced. It can also retain the original advantages of cryptocurrency such as resistance to centralization and non-tampering. . At this time, cryptocurrency may truly show its appeal beyond legal currency in addition to "money laundering", and Web3 will truly become the "future".

When Bitcoin reaches $100,000, will our lives be better?

Looking back at the birth of cryptocurrency, Bitcoin’s original vision was to create a peer-to-peer electronic payment system while combating centralized finance. However, times have changed, and Bitcoin has become a value savings system. The approval of the Bitcoin ETF has also further strengthened the financial attributes of Bitcoin. If in the context of market downturn, MEME currency is the speculation of retail investors, then the Bitcoin ETF has become the speculation of institutions.

However, just think about this question, when Bitcoin reaches the $100,000 mark one day, will financial inclusion be achieved and our lives will be more convenient? ? The future of Web3 needs to leave the carnival of a few speculators and enter the real world. The good news is that such a trend is gradually emerging, even if it takes ten, twenty, or even until 2049.

At a Solana hackathon, a project founder shared this view, "The role of Web3 is to improve production relations, not to increase productivity. In fact, Web3 will reduce productivity to a certain extent. This means that if Web3 wants to achieve large-scale application and attract some of the remaining 6 billion people in the world, it must not only go through the same path as Web2, but also make new changes. Much change.