The Web3 World in 2023
Breaking down what 2023 will likely have in store for the Web3 world...
In today's edition of The Ground Floor we will be breaking down what 2023 will likely have in store for the Web3 world.
Web3 Predictions For 2023
2022 has been a year of all time highs, and local lows for NFTs.
In July 2022, total NFT transaction value reached its all time high — a moment that is meant to mark the peak performance of the NFT market.
In reality, this milestone marked the peak point of people speculating on the prices of NFTs.
From February 2021 onwards, NFTs entered a period of price discovery as people began to pay significant sums to acquire the NFTs they desired.
In the past, few consumers were willing to pay significant sums to purchase digital assets as the cost of recreating (downloading) & storing digital assets was so incredibly low that there was an infinite supply of digital assets.
This infinite supply resulted in very little value accruing to creators.
NFTs solved this problem by allowing creators to create a set quantity of digital assets.
With an open ledger (blockchain) that's easy to search, consumers can easily confirm the authenticity of assets that are listed on marketplaces such as OpenSea & Blur.
As the value of NFTs increase, they effectively became Veblen goods — a good that increases in value as the price of the good increases.
Such NFTs are status symbols.
NFTs serving as status symbols has been the leading catalyst for the adoption of Web3 throughout the last 2 years, with countless new consumers onboarded to the Web3 world during this period by purchasing a profile picture NFT.
Reddit alone onboarded 3+ million new consumers to Web3 through its avatars in 2022.
The adoption of NFTs as status symbols will continue into 2023, however, I don't expect it to remain the primary catalyst for onboarding new users to Web3.
NFTs as a Feature
NFTs need to become boring, to once again become exciting.
In 2022, all too many Web3 projects focused on the fact that they were building in Web3 and creating NFTs as opposed to creating valuable products for Web3 consumers.
In 2023, my primary prediction is that we will see many talented entrepreneurs creating companies whereby NFTs are a key feature of the products they create, however, NFTs are not the product.
In many cases, we won't even hear the term NFT.
The Gold Standard
This approach is exemplified by Reddit's approach to onboard 3+ million new consumers into the Web3 world to date (previously reported as 10 million).
Throughout Reddit's roll out, these assets were referred to as avatars that would improve profiles on Reddit vs seeking to sell its users on NFTs.
By the end of 2023, we can expect to see many millions of new consumers owning & regularly interacting with NFTs, however, I am willing to wager a small percentage (sub 30%) will understand what an NFT is other than a digital asset they can sell.
This is what success looks like to onboard the next 10 million users to the Web3 world.
More and more talented people continue to invest their time to build the Web3 world.
The output of this effort will likely take many years to fully come to fruition, however, it looks likely we will gain glimpses of this progress in 2023 as companies continue to create new and improved products and experiences for Web3 consumers.
I have high expectations that 2023 will be an industry defining year for the Web3 world.
Bonus: Projects I will be watching closely in 2023
2023 is a big year for the brand as they seek to significantly increase the size of the collection with the Doodles Dooplicators opening in early 2023.
Swoosh by Nike — Nike continues to double down on the investments it has made in Web3, and in 2023 we can expect to see Nike exponentially expand the number of people participating in its Web3 program called Swoosh.
Overlord expanding into film & fashion — A project that has continued to command consumers attention in the bear market is Overlord, the creators of Cold Blooded Creepz.
I expect big things from Starbucks in 2023.
💡 Web3 Roundup
1) Bored Apes Next Mint 🙊
Writers holdings: At the time of writing I own several RTFKT, Doodles & Overlord NFTs.
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This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.