W3GMI

You can stress about rate hikes or you can help build cool tech for a completely user-controlled internet

Feb 11, 2022

Web3.0 has been a core focus for M31 Capital since our launch in Jan 2020 with early investments into top projects like Livepeer & Helium long before they broke into public awareness.

But interest in the Web3 sector really started picking up recently with the explosion in the related Metaverse sector, since a prerequisite for a genuinely decentralized Metaverse is that it's built on a fully decentralized Web3 tech stack.

While it’s become somewhat of a catchall buzzword in the last few months, we have always used the term “Web3” to refer to the set of technologies that are as disruptive to Silicon Valley as DeFi is to Wall St.

In both cases, this means the disintermediation of fee-taking middlemen, faster & cheaper products/services, 100% transparency, and less opportunity for corruption or manipulation.

In Web3's case specifically, it means products like a decentralized Twitter, AWS, Netflix, Google, etc...

A familiar Web2 user experience with a completely open source, permissionless, composable, and censorship-resistant Web3 backend.

What's Next?

Web3, like Web2 in the late 80s, has so far been focused on building out the unsexy infrastructure for bandwidth, compute, and indexing that make the fun, consumer facing apps possible.

This is why the big Web3 winners so far have been infra like Filecoin (decentralized file storage), Livepeer (decentralized video transcoding), and Helium (decentralized wireless networking).

But now that much of the necessary infrastructure has been built, the space is ready for the first consumer-facing products & apps built on a fully decentralized tech stack.

Web3 Black Hole

This means a decentralized Twitter using EPNS, a decentralized Zoom built on Livepeer, a decentralized Spotify a la Audius.

But how do we get creators (artists, musicians, entrepreneurs, etc.) away from the centralized, gated, value-extractive Web2 platforms?

Like everything in life, it's all about incentives...

Here are my priors:

Creators will always go wherever the consumers are
Consumers will go wherever they get the most value
Web3 business models pass more value to users than Web2

The direct-to-consumer business models of Web3 allow for new modes of interaction, deeper engagement with creators, and - importantly - profit participation.

Users will have brand new methods of interacting with music like going 'long' their favorite song and profiting as it gets more streams.

As an artist, you'll write a drum track and own the digital file as an NFT which other artists can add new tracks on top of, automatically paying out a portion of the streaming revenue from the new song directly to the original artist (and holders of their artist coin) in real time.

No coding or finance skills required and no 3rd parties taking $0.50 of every $1.00.

Creators & consumers, artists & fans, builders & users all stand to profit more in Web3 than they do in Web2.

Which makes sense: if Web3 products can provide the same service as a Web2 competitor but with zero operating costs (no brick and mortar, employees, etc.), those cost savings must either flow through to the creators or the consumers... or both.

Conclusion

NFTs are drawing in millions of new users into Web3. Facebook has gone all-in on the Metaverse. Microsoft and Sony are on acquisition sprees for gaming companies. And Web3 is maturing from the infrastructure phase to the consumer application phase.

At the same exact time, millions of people are waking up to the fact that cryptographically-secured digital assets will disrupt much more than just money.

The pace of W3 innovation is incredible, and the ability for creators and consumers to participate and profit more than they can in Web2 is setting off an unstoppable flywheel.

So you can stress about rate hikes or you can help build and participate in the next generation of exciting tech for a brand new, disruptive, and completely user-controlled internet.

W3GMI, frens.