Web3 Industry is like the Internet in the 90s, a blue ocean where occupying the ecological position early can gain industry dividends. In a bull market, everything is beautiful. In 2024, the path of Mass Adoption becomes more diverse. The importance of MEME culture in Web3 is further highlighted. This article is based on the article “From “Looking Up” to “Looking Straight”, How I Demystify Web3 – A Personal Experience of an Ordinary Web3 Participant” written by Crypto Curiosity Player and compiled, translated, and written by PANews.
(Summary:
A confession of a reckless “mfers” investor: Nice to see you again, it’s been two years
)
(Background:
Fish God’s Scripture: How to earn 100 million US dollars from 1000 US dollars in the cryptocurrency circle?
)
Table of Contents
2021: Immersed in the beauty of looking up at Web3
Investment and entrepreneurship are hot
Speculation is hot
DAO is hot
2022: From looking up to calm, changes are always thunderous
2023: The market is recovering, but cannot return to the past
2024: The bull market returns, is Mass Adoption far away?
What remains the same:
What changes:
Conclusion: How to better establish oneself in Web3
I first heard about and participated in blockchain around the end of 2017 and the beginning of 2018. At that time, I was working for a major internet company, and due to the inherent advantages of major internet companies in business and the relatively strong programmer atmosphere, I had the opportunity to be exposed to blockchain earlier. At that time, I often hung out with a group of programmer friends, and the most common topics they talked about were “Bitcoin”, “mining”, “ICO”, “air coins”, etc.
I didn’t have a technical background, so what they were talking about was completely confusing to me. But because I come from a content background, my intuition told me that blockchain is a very different technology.
So, I started reading the Bitcoin whitepaper and the Ethereum whitepaper. I remember very clearly, one night I read the Bitcoin whitepaper in English 10 times and still didn’t understand it. I only remembered one title: “Bitcoin: A Peer-to-Peer Electronic Cash System”, and this title deeply imprinted in my mind. My immediate feeling was: this is amazing!
This was the beginning of everything. Or to use a popular phrase on the internet now, the gears of destiny began to turn.
Interestingly, although I started learning about blockchain from Bitcoin, I actually followed the advice of my friends and started with playing with air coins, and the result was predictable, I couldn’t escape the fate of being a “leek”.
So at that time, my attitude towards blockchain was contradictory. On the one hand, like many others, I thought it was a new scam to cut leeks – in fact, at that time, there were indeed such situations; on the other hand, I felt that at least the idea of Bitcoin was very new, indicating some possibilities for the future.
From 2019 to 2020, I didn’t participate much in this industry, just as a learner and observer to understand the development of this industry. Until now, I still consider myself a “learner” and an “observer”.
If 2017-2018 was like a fleeting experience of blockchain, then 2021 can be said to be a year of “deep immersion”.
That year, I was working for a US dollar fund, and thanks to the platform advantage of working in a VC company, I had more opportunities to understand the development of front-end technology and emerging fields. Coincidentally, it was also in that year that, accompanied by a bull market in the cryptocurrency market, “Web3” began to replace blockchain as a new narrative.
When I recall that bull market, what immediately comes to mind? There are several things that left a deep impression on me:
In early 2021, Bitcoin reached a market capitalization of 1 trillion US dollars for the first time.
Large companies like Tesla publicly disclosed their holdings of Bitcoin.
Artist Beeple’s NFT artwork “Everydays: The first 5000 days” sold for $69 million.
Basketball superstar Stephen Curry spent $180,000 to buy a Bored Ape Yacht Club (BAYC) NFT. Yes, you read that right, $180,000.
El Salvador passed a bill to make Bitcoin legal tender.
DAO – a new social organizational model of Web3 began to emerge.
Looking back now, in 2021, the entire Web3 industry that I experienced was full of excitement. This kind of excitement can be seen in:
Because I work in the VC industry, I have many opportunities to communicate with investors and entrepreneur friends. Throughout the process, Web3 is always a topic that cannot be absent. At that time, I saw many investors starting to leave traditional investment fields and transition into Web3.
It was the same for entrepreneurs. In traditional VC investments, top talents from major companies are often the preferred targets for investment. But in that year, I also saw many outstanding talents from major companies starting to enter the Web3 field for entrepreneurship.
When I asked these investors and entrepreneur friends who have entered Web3 about the reasons for choosing Web3, a common answer is that the Web3 industry is like the Internet in the 90s, a blue ocean where occupying the ecological position early can gain industry dividends.
In Web3, speculation is a common verb. Especially in a bull market, speculation is even more prevalent.
Speculating in coins, especially in contract speculation. If you simply look at the candlestick chart, the rise of the entire cryptocurrency market in 2021 is very sharp. So at that time, on social media, you could always see many people showing off their huge profits and sharing their experiences of easily making money in the cryptocurrency market. This kind of information was available almost every day, and if you saw too much of it, you would have an illusion – that this industry is particularly easy to make money in, and everyone can easily make money as long as they have enough courage and leverage in a bull market.
Speculating in NFTs. In 2021, the most talked-about topic was undoubtedly NFTs. Especially the rise of Bored Ape Yacht Club (BAYC) triggered a wave of adoption by Web2 users. At that time, the biggest value of NFTs, besides speculation, was using them as avatars. If your social media avatar is a bored ape or a CryptoPunk, congratulations, many people will consider you an OG or someone extraordinary because usually people who own such NFTs are either wealthy or have a good reputation. It can be said that NFTs satisfy the human desire to show off. So at that time, many people around me were speculating in NFTs, especially young friends. Since many NFT minting was not based on the GMT+8 time zone, if you wanted to mint an NFT that you liked and had a high price speculation, you had to stay up late to wait. At that time, the industry jokingly referred to NFTs as “small pictures”, and the behavior of speculating in NFTs was described with an industry slang term: “Did you grind today?”
Even now, I still think that the emergence of the term DAO in 2021 is a very valuable thing. Because DAO stands for Decentralized Autonomous Organization, compared to the speculation of assets like coins and NFTs, DAO’s tokenized speculation is relatively less common, and it is more about exploring a completely different organizational form compared to traditional organizational models. This form of organization has three important characteristics: 1) Decentralization, with no distinction between leaders and subordinates; 2) Collaborative work based on consensus and democratic decision-making rules; 3) Remote work, with tasks being completed through online collaboration.
Of course, like many things that rise, DAOs also first became popular abroad. DAOs that were well-known at that time include: Bankless DAO (aiming to promote the large-scale application and social consensus of a truly bankless financial system), Pleasr DAO (composed of digital artists and collectors aiming to acquire culturally significant works), ConstitutionDAO (crowdfunding to bid for a copy of the U.S. Constitution), etc. Later, DAO organizations also took root and sprouted in China, and some experimental DAO projects emerged.
Like speculating in NFTs, young people are the main participants in DAO organizations. They are more receptive to novel things, and at that time, many young people called themselves “digital nomads”. The organizational form of DAOs was more suitable for their digital nomad lifestyle.
Looking at it from 2021, the feeling I had for Web3 was “immersed in looking up”. This immersive looking up came from the high-tech represented by this industry – Web3 combines new technologies such as cryptography, distributed ledgers, and smart contracts. It also comes from the fact that this industry seems to have easier ways to make money compared to other industries. It also comes from the emergence of new organizational forms like DAOs, exploring the possibilities of future social and collaboration forms for humanity.
In summary, in a bull market, everything is beautiful.
If, in the bull market of 2021, everything was beautiful, then 2022 was a year of shattered beauty for the cryptocurrency market.
This year witnessed many historical events that can be remembered in the cryptocurrency industry:
In May 2022, the public chain Terra collapsed, and the Luna token became worthless overnight.
In July 2022, the top investment fund in the cryptocurrency industry, Three Arrows Capital, applied for bankruptcy protection.
In November 2022, the top exchange FTX was exposed to misappropriation of user funds. From the discovery of the problem to the announcement of bankruptcy, the whole process took only a few days.
Although in this year, there were still some positive events that brought comfort, such as the completion of Ethereum’s transition from PoW to PoS consensus mechanism. But the occurrence of the above events can be said to be the darkest moment in the history of the cryptocurrency industry, and it directly set the tone of “depression” for the Web3 industry in 2022.
Instead of hearing inspiring and emotionally uplifting messages, I heard more disappointment and terrible voices: XXX suffered heavy losses from coin speculation, XXX exited the industry, XXX projects stopped operating because they couldn’t raise funds, XXX cryptocurrency funds stopped investing. No one is discussing which coin is worth speculating, no one is discussing whether NFTs will continue to rise (on the contrary, everyone is selling, but because NFT liquidity is poor, many NFTs are practically worthless), no one is discussing what DAO should do next, and no one is discussing how this industry can achieve Mass Adoption. The entire industry has quieted down, or to use the word I mentioned above, the entire industry has entered a depression.
Like many people, after witnessing and experiencing so many thrilling and ups and downs in the industry, I also started to gradually become calm and detached from the emotional looking up at Web3 in 2021:
On the one hand, the huge volatility of the cryptocurrency market made me see that people who enter this field not only experience the joy of overnight wealth but also the regret of huge losses overnight. Especially for those who treat Web3 as a “betting everything on a bicycle turning into a motorcycle” destiny.
On the other hand, the problems of opaque use of funds and lack of effective regulation exposed by this industry have dealt a blow to people’s confidence in this industry. Although for something with long-term development, the earlier such problems appear, the better, it has indeed poured cold water on a kind of excitement and made everyone start to objectively and calmly look at Web3.
Finally, for those attempts that I consider to have more social value, such as the DAO modelFurther exploration and discussion, such as promoting charity and environmental protection through tokenization, did not make significant progress in the past year but instead followed the trend of the cryptocurrency market and fell into silence.
For a while, I have been wondering why there are so many newcomers entering the industry in 2021. I believe mediums like NFT played a significant role because they expanded the application scenarios of Web3 (even if it’s just as avatars), allowing more people from Web2 to intuitively experience NFT and Web3. However, the problem is that when everyone comes into contact with NFT, they immediately realize that it is an investment/speculative product. Therefore, overall, the integration of Web3 with real-life scenarios is weak, and the core is still in asset attributes or financial attributes—creating more tokenized financial derivatives to attract and enhance capital liquidity, generating more investment and speculation possibilities. At that time, I believed that if Web3 is to truly develop as an industry in the long term, it must balance financial speculation and application scenarios.
After experiencing the bear market in 2022, 2023 can be said to be a year of self-healing for the crypto community. In this year, the price of Bitcoin gradually climbed from $16,000 per coin at the end of 2022, and mainstream exchanges including Binance increased their investment to promote regulatory compliance. However, when I talked to some friends who invested in first-tier projects, they chose to allocate to second-tier projects or continue to observe. As one friend said, “The prices of mainstream coins in the second-tier market are so low now, why invest in first-tier projects with high uncertainty?”
At the same time, I originally thought that with the market slowly recovering, there would be a resurgence of discussions about Web3 on social media. I remember that during the bull market in 2021, a small social platform gathered a large number of people interested in Web3. In the circle of Web3 Institute, if you post something, you would receive many likes. But in 2023, when I opened this social app again, I found that some active individuals or projects that were previously active no longer posted, and new posts received almost no likes or comments. Everything seemed unable to return to the past.
Therefore, in this year, I started to consciously communicate with many people, including those outside the industry, newcomers to the industry, and players who have gained insights from DEFI and MEME. When I asked them about their views on Web3, I received a unanimous answer: Web3 is a gambling casino where people bet on who the “lambs” are.
Based on the feedback I received from these conversations, I began to have the idea of writing a book, hoping to objectively introduce the development of Web3 at that time to more people, allowing myself and those who want to understand and enter this field to have a balanced view of Web3, rather than imposing subjective biases of good or bad on this field. So, I collaborated with more than a dozen friends in the industry, who have deep professional backgrounds and knowledge accumulation in their respective fields, to publish a Web3 popular science book titled “From Technology to Application: A Handbook for Ordinary People to Learn Web3.” It was officially published at the end of 2023 and received positive feedback from many people. Looking back now, although only half a year has passed, the chapters and framework in the book are far from covering the current development of Web3. I admit that my attitude towards this industry has changed a lot, but what remains unchanged is that this industry is still rapidly developing according to its unique rhythm.
Currently, it is certain that there will be a bull market in 2024. Two major events in this year will serve as catalysts for the continuous rise in cryptocurrency prices: the approval of Bitcoin spot ETF by the US SEC, which means that more Wall Street funds will flow into Bitcoin and directly drive up the price of Bitcoin and other cryptocurrencies, and Bitcoin undergoing another halving cycle. From historical experience, each halving of Bitcoin has triggered a bull market, and this year is highly likely to be no exception.
Based on my observations, I compared this bull market with the one in 2021 to see what remains unchanged and what has changed.
The bull market amplifies the power of speculation:
In 2021, NFT was a speculative product, and in 2024, meme coins have become a unique speculative product. In my opinion, there is no right or wrong in speculative investments related to assets. After all, traditional stock markets also have short selling and longing. It’s just that the cryptocurrency market is highly volatile and lacks effective regulation, so in the bull market, when the speculative games of each participant are summarized into candlestick charts, they are infinitely magnified.
Tokens still need better liquidity and the ability to make money:
In the bull market of 2021, in addition to NFT, GameFi and SocialFi also received attention. The tokenization attribute unique to Web3 requires reliance on specific tracks or businesses to better realize the liquidity of tokens and create more assets. The same applies to 2024. On the one hand, the Bitcoin ecosystem has started to be hyped up, going through processes from inscriptions to runes to Bitcoin Layer2, and Bitcoin re-collateralization protocols that Ethereum has experienced. On the other hand, based on Ethereum’s re-collateralization projects, it has become a hot topic. After Ethereum transitioned from proof of work to proof of stake in 2022 and subsequently implemented collateralization, what people want today is not just the returns from collateralization but how to improve capital utilization efficiency and achieve higher returns on top of collateralization.
The path to mass adoption becomes diversified. In 2021, the mission of achieving mass adoption of Web3 was entrusted to projects in gaming, social media, and other areas, but the results did not meet expectations. In 2024, Web3 and AI are increasingly integrating, and they are also starting to integrate with offline physical infrastructure, shaping another narrative, hoping that the “curve” can achieve the goal of mass adoption. From this perspective, Web3 needs AI or the Internet of Things more than AI and the Internet of Things need Web3. Additionally, in my opinion, the approval of Bitcoin spot ETF, the acceptance of cryptocurrency donations in the US presidential election, and other factors have already demonstrated that cryptocurrency assets have become mainstream. However, this form of mass adoption is something that everyone can have, not something that everyone must have.
The importance of meme culture in Web3 is further highlighted. In the decentralized world of Web3, believing in and defending what you believe in is a spiritual core, and I believe that memes are the direct expression of the native spiritual core of Web3. This also explains why meme coins’ price increases outperformed other altcoins in this bull market.
After experiencing the bull markets of 2021 and 2022-2023, as I mentioned earlier, my view of Web3 has changed from admiration to a more objective perspective. In my opinion, Web3 is a person or a group of people “selling” an idea or vision and crowdfunding from the public. Those who agree and participate receive token incentives, and to make tokens effective or liquid, they are given financial attributes. Simply put, Web3 is a consensus of a group of people wrapped in a financial cloak and constantly seeking utility scenarios for token empowerment.
The above is my understanding of Web3. As I mentioned at the beginning, I consider myself a learner and observer in this field. Therefore, in the past two years of deep participation and personal experience, I have had many opportunities to communicate with friends and practitioners in the industry. I found that many people face a common question, which is how to establish a better foothold in the field of Web3 when choosing it as the future development direction?
This question varies from person to person, as everyone will come up with different answers based on their own experiences and perceptions. I cannot call myself a crypto native because most of my career experience is in Web2, and I have not had long-term experience in well-known Web3 projects or investment institutions. Therefore, it is difficult to claim any remarkable achievements (although my personal investment return rate is decent). However, fortunately, in these two years, I have met many professionals in the industry and learned a lot from them. Combining my own experiences with theirs, I would like to share a comprehensive perspective:
Do not enter this circle with a speculative mindset.
While there are many opportunities to make money in this industry, there are not as many as people think. I have heard a saying before that there is a pyramid model for making money in this field. The first is to create projects or platforms; the second is to do VC investments; the third is to do arbitrage and quantitative strategies as a trader; the fourth is to invest based on research; and the fifth is to hodl coins. From my personal experience, participants who frequently speculate on coins may not have a high return rate, while those who do arbitrage and quantitative strategies or simply hodl mainstream coins tend to have stable returns. The former is because they have professional abilities, while the latter believes that mainstream coins like Bitcoin have long-term value that can withstand bull and bear cycles. Therefore, for most people in Web3, having a sustained and stable return rate is far superior to frequently speculating in high-risk, high-return ventures.
Assume the best intentions of others.
Web3 is a relatively mixed field, and due to the different purposes that each person enters, as well as the fact that many communications and collaborations are based on virtual online methods, the cost of trust in people or projects is relatively high. If you have found a team that you can work with for the long term, then congratulations, you are lucky. If you haven’t found one yet, that’s okay. In the process of communicating and trying with different people, although you may encounter disappointments, you will find like-minded partners to do something with through such experiences. The more fluid the market and the higher the cost of trust, the more we should assume the best intentions of others.
Do Your Own Research.
This is the most widely spread phrase in Web3, and it is universally recognized as valuable advice. Because this field has various people, opinions, and information, when we assume the best intentions of others, we also need to form our own independent thinking and judgement in the dazzling environment to develop our own thinking patterns and professional investment methodologies. Please remember not to be swayed by emotions or other people’s CX. Everything requires DYOR.
I wrote this article to some extent to summarize the changes in my understanding of Web3 over a period of time. This field has provided me with better investment returns than other traditional investment types, and it has also allowed me to meet many different people, including true industry builders, talented traders, and some speculative investors looking for short-term gains. This is a very interesting thing. What is more important is that through my experience in this field, I have realized my ecological position in this field and how to stick to some principles.
Of course, these are all based on my own personal experiences and perceptions, and do not have universal applicability. I believe that every person in this field will have their own understanding, interpretation, and feelings about Web3. I wish everyone can make money and find a suitable ecological position in this field.