4 Reasons Large Brands Are Finally Entering The Web3 Space

Ben Gehmlich
|
August 25, 2022
The concept of Web3, though still in its nascent stage, is finally gaining traction with the world’s largest brands. The freedom and flexibility of Web3 that allows brands to penetrate the virtual world and grab vast opportunities are forcing brands to rethink how they interact with consumers, retailers, their peers, and competitors.

The disruptive impact of blockchain technology that continues to unfold among brands shouldn’t come as a surprise. A 2019 Deloitte report showed that 86% of executives believed mainstream brands would eventually adopt blockchain to transform their businesses, while 77% feared their brands would lose their competitive edge if they failed to adopt blockchain.

Technological changes occasioned by the entry of Web3 technologies like Non-fungible tokens (NFTs) and Decentralized Finance (DeFi) are now enjoying mainstream adoption. As that happens, they’re disrupting traditional business models at an alarming rate, and only those brands that adapt fast enough will survive.

Web3 has made the blockchain disruption seem far away from brands, and their product is now becoming a necessity. As a result, brands that adopted a “wait and see” position are now finding ways to differentiate themselves from their rivals in a highly competitive space. This article unpacks four reasons the Web3 wave is changing the future of brands.

For a while now, many brands held back and insisted on a conscious approach to Web3 as they waited for developers to overcome widespread issues relating to privacy and the decentralization that would give users more control of anything they did online. However, it seems like Web3 is no longer just “a nice idea worth considering in the future.” There are good reasons why software engineers, tech companies, and large brands are looking beyond the few existing discrepancies and finally embracing Web3’s vast potential.

New Crypto Regulation

The widespread adoption of the next phase of the internet has been difficult due to a lack of government regulation that could have helped drive crypto and blockchain onto the mainstream.

The rise of crypto use that saw an increase in the numbers of wallet holders during the Covid-19 pandemic later slowed down, suggesting something was blocking mainstream adoption. However, news about upcoming crypto regulation in the E.U. and the U.S.A. has seen the resurgence of more accessible crypto products like crypto debit cards and stablecoins.

As more governments create frameworks for establishing crypto regulation and announcements regarding CBDCs, there’s a growing feeling in the crypto community that government regulation will promote the dawn of Web3 and bring it into the mainstream. Large brands are placing themselves in line to reap Web3’s promise to encourage decentralization and the use of A.I. to democratize the internet ultimately.

Stability: Crypto hype and overvaluations are subsiding

The “hype and noise” about Bitcoin and cryptocurrencies that have dominated the headlines for over a decade were so loud that most people believed that crypto was synonymous with blockchain. Because of its anonymity, the initial media sensation surrounding Bitcoin was its use on Silk Road for the payment for illegal activities and later as a way of sidestepping traditional financial institutions and payment systems.

However, its’ finally emerging that there’s more to blockchain technology than cryptocurrencies, which are only one of the many possible applications with blockchain. Increasingly, leading brands are now excitedly discussing all possibilities of blockchain, including DApps, DeFi, NFTs, and now Web3. The idea that Web3 is creating a new era of DApps that can change how users interact with control of data away from a small group of Big Tech firms and government censorship has gotten the attention of brands that want to remain relevant in a digital world.

Clear Line to Web3 Success

Web3 has since become the answer for brands looking to design and create a technological solution that would support an improved online presence. Brands that have jumped in can tap into their customers’ mindshare of the worldview and discard popular practices that no longer work.

Brands that have embraced Web3 are benefiting from a paradigm shift where customers are no longer driven by brand loyalty but are instead incentivized by the brand community’s power to enhance the value of being connected to a particular brand. In a world where marketers for long thrived on hypergrowth and metrics generated by passive third-party tools, Web3 facilitates a new form of brand growth that’s measured via active tools such as likes, memes, and communities of brand ambassadors.

Several big tech firms have noted that Web3 is rapidly getting into the mainstream and are already tapping into the limitless potential of the Metaverse. The kind of online interaction the Web introduces. The most prominent examples include:
  • Meta: The firm changed its name from Facebook to Meta to reflect its mission to play a leading role in the Metaverse. For a company with over 2.8 billion users visiting its various social media sites, Meta is already producing affordable equipment and physical gadgets that expose users to the Metaverse.
  • Shopify: This Canadian company that serves millions of online retailers created a beta version of its NFT trading platform in 2021 to enable users to mint and sell NFTs via several blockchains. Shopify is also integrating Augmented Reality capabilities intending to offer a “realistic and interactive” representation of products that can lengthen conversations while guaranteeing minimum returns.
  • Microsoft: Leading tech firm Microsoft recently announced it would partner with Astar Network to construct a Web3 feature. Microsoft would offer the Astar Incubation program support and tools as well as network and marketing assistance. Microsoft is also backing ConsenSys to compete with social media giants like Meta for a piece of the emerging blockchain market.

Closer to Mass Adoption

While most thought leaders agree that Web3 is the next big thing in the world of computing, the masses were kept away due to the challenge of putting Web3 products in the hands of the masses. However, the allure of crypto and NFTs saw a new generation of users willing to advance their blockchain and crypto literacy levels.

Some startups, such as Lisk, are working to enhance blockchain and Web3 adoption by building applications that are easier to use by users and programmers and giving them a more straightforward entry point into the blockchain world. Such efforts have primarily concentrated on pain points such as introducing interoperability and scalability. The rapid rollout of 5G and 6G technologies has also created a huge demand for Web3 technologies. As a result, big brands intent on reimaging customer experience are keen on taking advantage of the mass adoption of Web3.

Closer to Mass Adoption

While most thought leaders agree that Web3 is the next big thing in the world of computing, the masses were kept away due to the challenge of putting Web3 products in the hands of the masses. However, the allure of crypto and NFTs saw a new generation of users willing to advance their blockchain and crypto literacy levels.

Some startups, such as Lisk, are working to enhance blockchain and Web3 adoption by building applications that are easier to use by users and programmers and giving them a more straightforward entry point into the blockchain world. Such efforts have primarily concentrated on pain points such as introducing interoperability and scalability. The rapid rollout of 5G and 6G technologies has also created a huge demand for Web3 technologies. As a result, big brands intent on reimaging customer experience are keen on taking advantage of the mass adoption of Web3.

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