Web3: A Work in Progress, Not a Lost Cause Animoca Brand's Robby Yung, Future Perfect Ventures' Jalak Jobanputra, and Shorooq Partners' Tarek Fouad feel that there is a revival of interest in Web3 players and offerings

The next iteration of the Internet, the 'Web3' saw a massive boom in 2021-22. However, today it is facing stiff competition from another budding technology, artificial intelligence. But the ecosystem is recovering, particularly cryptocurrency, thanks to the BTC ETF approval and the upcoming halving. "I think one of the hallmarks of Web3 is actually that nothing stands still for very long," shares Robby Yung, CEO-Investments, Animoca Brands. Yung puts emphasis on focusing on the macroeconomic environment.

In March, Bitcoin touched an all-time high of USD 73,083. It rose from USD 42,686.89 on January 16 to USD 65,315 on March 16. "We can look back now and say that since pretty much November of last year, the market direction has shifted. And this positive sentiment means there's tremendous interest in new token launches and in people continuing to move from Web2 into Web3 and joining Web3 communities," Yung adds.

In 2021, venture capitalists invested a record USD 33bn in crypto and blockchain start-ups. The number was USD 7 billion going to startups in 1,564 deals in 2023. Jalak Jobanputra, Founder & Managing Partner, Future Perfect Ventures feels that the amount of infrastructure that's been built is exciting. Having been an investor in the space since 2014, she feels that great strides have been made in layer two solutions. "The whole scale has been built since 2020. And that's going to enable new applications to be built and enterprises to better utilize blockchain infrastructure," she shares.

Jobanputra is further optimistic that more mass adoption will take place over the next five years. An early-stage venture, Future Perfect Ventures has backed the likes of BlockCypher, Unocoin, PYOR, and UNXD to name a few.

According to a 2022 NASSCOM report, India ranked the world's third-largest regarding the Web3 workforce. However, the country has yet to nurture the right environment for Web3 startups. At present, the Middle East and Singapore have emerged as Web3 hubs. "I think the Middle East to a big degree, has pioneered from a regulatory perspective, openness towards Web3 and blockchain projects from early days," shares Tarek Fouad, Partner, Shorooq Partners. On a weekly basis, Qatar sees 10 to 15 startups in the crypto and blockchain space sprout up.

Yung feels that as a generalized trend Web3 is everywhere other than the US due to difficulty from a regulatory standpoint, "I think it's just the nuance being that it's not going to be the hegemony like in Web2, where basically 90 per cent of the action was in the US." Jobanputra feels that while the US is an important market, largely it is a borderless ecosystem.

So, how can we see mass adoption by consumers in Web3? Yung feels that the adoption has been relatively fast of Web3 technologies for gamers because Web3 is very suited to the behaviours that gamers have already exhibited, "They buy virtual currency, and they spend virtual currency to buy virtual items. This is a very learned behaviour for gamers. So we just offer them a better way to do it." He also feels that Web3 is facing resistance and headwinds from existing Web2 distribution platforms which is hampering mass adoption. "So platforms like the mobile platforms or Facebook, Google or Epic now have finally allowed Web3 games in their store. So that's one distribution angle. But these are still kind of choke points of distribution for traditional games. And so we've had to find ways in which to get our games distributed outside of those channels, which is more challenging," he points out.

Fouad asserts that traditional channels today are experimenting with everything Web3 and blockchain, and it's just a matter of time until they kind of adopt those. "I think by that time we will stop calling it Web3. We'll just call it infrastructure. It's like we don't keep calling it the internet, it's going to be just part of how we do business."

Jobanputra feels that the talent pool is growing in Web3 and that there is a generational shift taking place, "I think young people just innately understand why this ownership matters. It's the older generations that have had a tougher time wrapping their arms around it."

Lastly, there is a revival of interest in Web3 players and offerings. Yung feels the market is completely back. Seconding Yung's opinion, Fouad says, "I think the Middle East is going to be one of those big hubs that will lead the world into Web3 adoption," the latter concludes. The trio shared their thoughts at the Web Summit Qatar 2024.