The pros and cons of big brands launching Web3 projects

The views expressed by the contributing Entrepreneurs are their own.

If you follow blockchain news, you’ve probably seen the alarming number that Web3 startup funding is down 74% in 2022. However, big brands like Starbucks, Mastercard, and Nike, all launching Web3 or Metaverse projects this year, are giving a conflicting look. picture of the current state of Web3 status and future development.

This may seem like deja-vu from the big brand NFT craze in 2021 and early 2022, but these projects appear to be much more based on delivering tangible value rather than manufacturing exclusivity. Major mainstream companies clearly see value in some aspects of Web3, but with the larger infrastructure still in development, is this major re-entry premature?

Related: 4 Things to Consider Before Investing in Web3

Great kindness of the brand

Major companies debuting and re-entering Web3 benefit from the space providing an unmistakable commitment to the industry as a whole. Where blockchain-based developments have often been dismissed as gimmicks or marketing gimmicks, lower-profile presentations show that Web3 technology can work with less fanfare by putting specific user benefits at the forefront of product launches.

A stamp of approval from companies outside the blockchain realm, even the tech bubble, can solidify which Web3 use cases are viable. Player outrage led gaming companies to push back on NFT integrations, but we saw almost no public reaction to the transition of the already wildly successful Starbucks rewards program to an NFT-based framework. Yes, it’s essentially the same technology, but it’s used in a way that enhances a service that non-encrypted users already love instead of a useless distraction from a core product.

Another key point of difference this time around is the focus on the more technology and innovation-focused aspects of Web3, such as augmented reality (AR). Yes, Meta has long been a leader in this space with Oculus, but the details surrounding Apple launching its own “mixed reality” headset this spring lend a new level of prestige to AR advancements. This news is even more surprising considering Apple’s reputation for watching technological developments from the sidelines until it wins.

If we measure Web3’s progress by a steady influx of VC dollars, then the state of the industry doesn’t look rosy in the short term. But the clear continued interest from giants outside the industry shows that there is a steady curiosity and desire for Web3 technology. That said, with the big players coming into the fold, it’s debatable whether Web3’s skeletal infrastructure and limited interoperability is up for it.

Related: Venture capitalists pour money into Web3. Here’s why.

Too much too soon?

Vote of confidence is crucial to the growth of any industry, especially for smaller projects that want to start and build something revolutionary. But external support does not always guarantee that a platform or industry can succeed in the long term. Just look at the number of outpost companies in the primordial Metaverse Second Life project.

The large-scale Metaverse infrastructure is still more of a sketch than a complete portrait. While big brand investments certainly fuel more frames for existence, they may not always have a community’s best interests at heart. What could eventually happen is that brands paint themselves into a corner, developing Web3 worlds that serve only their customers and mimic the type of “walled garden” ecosystem that describes many online platforms now.

Companies that ignore the need for community-based frameworks do so to their own detriment. Silicon Valley’s infamous “move fast and break things” mentality kind of backfired on Web3 projects that didn’t realize that you need an infrastructure to exist first before you tear it down.

By creating ecosystems that are not conducive to community development, Web3 development and infrastructure becomes a black box, inaccessible to other projects or developers. This is where projects like SendingNetwork, a software development kit (SDK) of tools that Web3 developers of all sizes can use to build community-centric platforms, step in to form an interconnected digital landscape. These cross-sector initiatives are equally vital to creating a common Web3 foundation with projects that strive to shape the industry in its image.

Related: They say Web3 is the future of the Internet. But how?

Making sure Web3 infrastructure is solid before tackling larger projects can also help ensure their interest in the long term. Companies of a certain stature have no qualms about experimenting in a new space that might drive revenue, only to back down after a bad quarter or a mountain of growth. We’ve seen this happen in the blockchain space before, so it would be wise not to retrace this path.

Ultimately, there are clear pros and cons to megabrands taking Web3 back into the mainstream. While some companies can lend legitimacy to the Web3 space, it’s important not to overlook the less glamorous but vital steps smaller projects are taking to create common ground. Essentially, as brands invest in their projects, they should consider taking a big-picture approach to becoming components in Web3 that bring new communities outside of their own corporate space.

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