Web3 startups have been facing a significant decline in funding, with a 76% drop in second-quarter funding in 2023 compared to the previous year. This decline has been attributed to various factors, including regulatory actions, market volatility, and a decrease in active developers and users. However, despite these challenges, there is still considerable potential for decentralized databases within the web3 space.
Key Takeaway
Despite the challenges faced by web3 startups, there is potential for a comeback in 2024 by adapting to new markets, leveraging the advantages of decentralization, and focusing on the convergence of Web 2.0 and web3 technologies.
The Potential of Decentralized Databases
Web3 has introduced a new way of building software, particularly in the context of increasingly complex data regulatory regimes. With governments enacting new data regulations, web3’s decentralized databases offer a unique solution. Instead of companies managing user data, web3 enables users to manage their own data, providing a novel approach to data privacy and security.
Adapting to New Markets
To survive and thrive, web3 startups need to expand their buyer base to new markets that are more receptive to their offerings. This involves using familiar language that resonates with buyers and promoting the value propositions that appeal to Web 2.0 buyers. Additionally, leveraging the unique advantages of decentralization, such as improved performance, security, and compliance, can help web3 startups appeal to a broader audience.
Combining Web 2.0 and Web3
It’s important to recognize that the core technology underlying web3 shares common roots with existing distributed systems. By bridging the gap between Web 2.0 and web3 infrastructure technologies, startups can position themselves to cater to the evolving needs of the market. This involves utilizing recognizable language, promoting value propositions, and highlighting the benefits of decentralization.
