Five Key Lessons for Successful Web3 Adoption

Degenerates, here's what I have for you today 👇

• 🎓 Five key lessons for successful Web3 adoption

• 👮‍♀️ Regulatory crackdown on digital assets causes investors to withdraw over $6 billion from Binance's BUSD token

• 🌶️ Chiliz launches a $50 million incubator program to target early stage Web3 projects in sports and entertainment

• 🐎 Game7's new Summon Protocol provides a solution to the "free rider problem" in web3 communities

• 💸 +4 funding rounds

Five Key Lessons from a Year in Web3: Insights from Polygon Labs' Ryan Wyatt

In last week’s newsletter, we mentioned Youtube’s plans in Web3 under new leadership. Last week we spoke about Youtube’s and how, back in 2022, Ryan Wyatt, former Global Head of Gaming at YouTube, moved on to become the CEO of Polygon Studios.

In a recent Rolling Stone article, Wyatt shared five lessons he learned from his first year working in Web3. Here’s what he had to say:

• Lesson #1: Stop Trying To Onboard People Into Web3.

  • Instead of trying to onboard people into Web3, Wyatt believes blockchain technology should be infused into the internet in a user-friendly way. In other words, have users enjoy the benefits without knowing they are using something different.

  • He points to Reddit's Collectible Avatars as a successful example of a user-friendly blockchain application. Over 7 million Reddit users have purchased at least one Collectible Avatar since their launch in July 2022.

• Lesson #2: Build The Internet Everyone Wants To Use.

  • Much of what is considered "crypto" is related to financial applications used mainly by early adopters.

  • For blockchains to have a greater impact, more people need to be interested and use the technology.

  • Gaming applications, such as Benji Bananas, provide a fun and easy way for people to interact with blockchains while still engaging with financial tools.

• Lesson #3: Do Not Use Complicated Jargon

  • Simplified crypto and blockchain language allow for a better user experience.

  • Current jargon associated with crypto and blockchains can alienate the average person, the terminology can sometimes be confusing, and more user-friendly language is necessary for mass adoption.

• Lesson #4: It Really Is All About The Community

  • Community is a crucial aspect of Web3 protocols, including Polygon.

  • A community, he argues, is more than just Twitter followers; it includes core developers, ecosystem stakeholders, part-time contributors, and users.

  • It is important to recognize and value those who contribute to your business but are not your employees.

  • Despite the economic downturn, the number of Web3 developers continues to grow, proving the resilience and foundational strength of many Web3 communities.

• Lesson #5: Abandon The Traditional End Game

  • Traditional businesses' life cycle is influenced by fundraising, public listing, mergers and acquisitions, which can distract from the organization's goals.

  • Web3 projects offer an alternative exit to community, where decision-making power and ownership in a protocol, project, or network are eventually distributed among community members.

  • Since decentralization is one of Web3's core values, it is something that true Web3 companies should aspire to.

  • While wholesale decentralization is not for every business, he argues there are several ways to experiment. It could be as simple as open-sourcing some internal code libraries to give back to the developer community or more complex, like blockchain-powered quadratic voting to give key stakeholders more influence

  • Ultimately, these areas are still unexplored, making working in the industry an exciting place.

US Regulatory Pressure Causes Massive Outflow of Binance's BUSD Token

• Investors have withdrawn over $6 billion from the Binance-branded digital token BUSD in the past month following the recent US regulatory crackdown on digital assets.

• New York’s financial regulator recently halted new issuance of the stablecoin, citing “several unresolved issues” relating to Binance’s relationship with Paxos.

• The BUSD outflows could hurt Binance’s bottom line, as BUSD is a significant part of the business. BUSD represented roughly a fifth of Binance’s trading volume in the last year, climbing to as much as 40% in December.

• Following New York’s crackdown on BUSD, Binance said it expects BUSD trading volume “will move to other stablecoin pairs over time”.

• The SEC has launched a blitz of enforcement actions against key crypto companies and recently opposed Binance US’s proposed $1bn acquisition of the assets of bankrupt crypto lender Voyager Digital, warning that part of the rescue package may violate securities law.

Chiliz Unveils $50 Million Incubator Program to Fuel Web3 Innovations in Sports and Entertainment

• Chiliz, a blockchain-based sports token platform, has launched a $50 million incubator program called Chiliz Labs to target early stage Web3 projects in sports and entertainment.

• The program is backed by Jump Crypto, the investment arm of Chicago-based market maker Jump Trading.

• Chiliz Labs will invest in Web3 projects that build on Chiliz's layer 1 blockchain.

• The incubator comes as Chiliz looks to ramp up competition with digital trading card company Sorare.

• Targeted projects could include those selling tickets in the form of non-fungible tokens (NFTs) or offering fan tokens similar to those on Socios.

• As of today, Fan tokens have a total market capitalization of over $300 million and 24-hour trading volume of over $40 million.

Game7's Summon Protocol: The Solution to Web3's Free Rider Problem

• Game7 has launched Summon, a proof-of-engagement protocol that rewards DAO members and web3 communities for their contributions.

• Each member receives a soulbound NFT that evolves as they contribute to the community, and rewards are based on power, status, and influence.

• Summon's automated reward mechanism can address the "free rider problem" that many web3 communities face.

• The platform is easy to integrate, making proof-of-engagement DAO more accessible.

• Experience points (XP) are awarded to users as they complete tasks, and those who make the most contributions receive the most XP, boosting their ranking in the DAO.

• The community will be governed by a model that distributes power and governing rights to the most productive members.

• Soulbound tokens are becoming a popular option for community management in web3, with other companies like YGG and MoonPay also using them.

• Damn. North Korean hackers stole a record $1.7 billion of cryptocurrency last year, most of which was converted to hard cash through brokers or centralized exchanges. The operation is visible on the blockchain, making it traceable by investigators. (Read More)

• Who’s attending the launch party? Playboy plans to launch the MetaMansion virtual world this year, in collaboration with Animoca Brands's The Sandbox. (Read More)

• As an F1 fan, I love this. Campos Racing partnered with Open Games Builders to create a digital metaverse that showcases their F1 legacy through virtual representations of circuits, garages, and drivers. Open Games Builders will also develop a formula racing game for Campos Racing where players can earn NFTs. (Read More)

• Who’s the fairest of them all? Deloitte and Vatom have launched a new platform called "Mirror World" that enables companies to create metaverse experiences with wallet integration capabilities. (Read More)

• Time to get cookin’. Google Cloud and the Tezos Foundation have partnered up to make it easier for Google Cloud customers to become Tezos "bakers" and support select startups in the web3 ecosystem. The partnership also includes plans to help developers deploy nodes on its blockchain and to reduce friction for companies looking to participate on-chain. (Read More)

• Excusez-moi. French lawmakers have approved stricter regulations for new entrants to the French crypto market, while existing players will have more time to comply. The rules will come into effect once Europe-wide regulations are brought into force, which is expected to happen in 2026. (Read More)

• Will we become rich this year? Ascendant, a Web3 astrology ecosystem, has launched Ascendant Fortune, an astrology application that provides users with personalized trading personalities and fortune forecasts based on on-chain data and astrological insights. (Read More)

• A new type of cookie. Salesforce is encouraging customers to start experimenting with decentralized tech, including crypto wallets and NFTs. Salesforce's Web3 studio co-founder, Marc Mathieu, believes that the wallet is the new cookie and will be embedded in all brand websites, connecting customers' wallets for a new data layer. (Read More)

• Avalon Corp | $13m: platform and tools that will revolutionize how games and virtual experiences are built (link)

• Orange Comet | $7m: Web3 entertainment and technology company, developing ecosystems around Web3 experiences and Web3 gaming (link)

• Portal | $5.3m Seed: enterprise-grade web3 infrastructure that transforms the platforms into portals (link)

• Wakweli | $1.1m Seed: infrastructure protocol built to secure the future of tokenized assets (link)