The pros and cons of big brands launching Web3 projects

The opinions expressed by Entrepreneur contributors are their own.

If you’ve watched the blockchain news, you’ve probably seen the worrying number that funding for Web3 startups is down 74% in 2022. However, megabrands like Starbucks, Mastercard, and Nike all launching Web3 or Metaverse projects this year paint a conflicting picture. current status and future development.

This might seem like déjà-vu from the NFT craze from big brands in 2021 and early 2022, but these projects seem far more grounded in providing tangible value rather than manufacturing exclusivity. Mainstream traditional companies clearly see value in certain aspects of Web3, but with a larger infrastructure still a work in progress, is this major re-entry premature?

Related: 4 Things to Consider Before Investing in Web3

Benevolence of big brands

Large companies debuting and re-entering the Web3 benefit the space by granting undeniable prestige to the industry as a whole. Where blockchain-based developments are often branded as gimmicks or marketing ploys, low-profile launches show that Web3 technology can work with less fanfare, putting concrete user benefits at the forefront of product launches.

A stamp of approval from companies outside the blockchain realm, and even the tech bubble, can solidify which Web3 use cases are viable. Gamer outrage has led game companies to seriously pull back on NFT integrations, but we’ve seen virtually no public backlash to Starbucks transitioning its already incredibly successful rewards program to an NFT-based structure. Yes, it’s essentially the same technology, but used in a way that enhances a service that non-crypto users already love, rather than a pointless distraction from a core product.

Another key point of difference this time around is the focus on the more technological and innovation-centric aspects of Web3, such as augmented reality (AR). Yes, Meta has long been a leader in this space with Oculus, but details about Apple’s launch of its own “mixed reality” headset this spring bring a new level of prestige to AR’s progress. This news creates an even bigger impact considering Apple’s reputation for watching technological developments from the sidelines until it’s a clear victory.

If we’re measuring Web3’s progress by a steady influx of venture capital dollars, then the state of the industry doesn’t look good in the short term. But the clear sustained interest from giants outside the industry shows that there is a solid curiosity and desire for Web3 technology. That said, with big players joining the fold, there’s room to question whether Web3’s skeletal infrastructure and limited interoperability is ready for it.

Related: Venture capitalists are investing money in Web3. Here’s why.

Too much and too soon?

A vote of confidence is vital to any industry’s growth, especially for smaller projects looking to take off and build something revolutionary. But external support does not always guarantee that a platform or industry can be successful in the long term. Just look at the number of companies with an outpost in the primordial Second Life metaverse project.

The large-scale Metaverse infrastructure is still more of a sketch than a full picture. While investing in big brands certainly encourages more structures, it may not always have a community’s best interests in mind. What can end up happening is that brands put themselves in a corner, developing isolated Web3 worlds that cater only to their customers and mimic the kind of “walled garden” ecosystem that describes many Internet platforms now.

Companies that ignore the need for community-based structures do so to their detriment. Silicon Valley’s infamous “move fast and break things” mentality has backfired on Web3 projects that haven’t realized that you need an infrastructure to exist before you break it.

By creating ecosystems that do not favor community growth, Web3 development and infrastructure become a black box, inaccessible to other projects or developers. This is where projects like SendingNetwork, a software development kit (SDK) with tools that Web3 developers of all sizes can use to build community-centric platforms, come into play to form an interconnected digital landscape. These cross-industry initiatives are vital to creating a common Web3 foundation with projects trying to shape the industry in their image.

Related: They say that Web3 is the future of the Internet. But how?

Making sure the Web3 infrastructure is solid before courting larger projects can also help secure your long-term interest. Companies of a certain stature have no qualms about trying out a potentially revenue-generating new space, only to pull back after a bad quarter or stagnant growth. We’ve seen this happen in the blockchain space before, so it would be wise not to retrace this path.

Ultimately, there are clear benefits and drawbacks to megabrands bringing Web3 back into the mainstream. Where certain companies can lend legitimacy to the Web3 space, it’s important not to overlook the less glamorous but vital steps that smaller projects are taking to create common ground. Essentially, as brands invest in their projects, they must consider a broader approach to becoming Web3 fixtures that bring new communities outside their own corporate space.

Leave a Comment