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Web 3.0
Business
ModelS

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SUPER GUIDE:
WEB 3.0
BUSINESS
MODELS

BY DANIEL PEREIRA

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© THE BUSINESS MODEL ANALYST

The Business Model Analyst is a website dedicated to


analyzing business model types, patterns, and innovations
using the business model canvas as its primary tool. The
site offers a wide variety of free and premium content,
including digital products such as PDF tools, presentations,
spreadsheets, ebooks & guides, and much more. Check it
out here.

Daniel Pereira
The Business Model
Analyst Ottawa, ON,
Canada
businessmodelanalyst.com

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Copyright © 2022 Daniel Pereira


All rights reserved.
ISBN: 978-1-998892-20-4

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TABLE OF CONTENTS
Introduction 10

What Is Web 3.0? 11


The Evolution From Web 1.0 To 3.0 13
Web 1.0, Web 2.0, And Web 3.0 14
Web 2.0 Vs Web3 15
Web3, Decentralization, And Blockchain 17

What Are The Core Characteristics Of Web3? 19


Semantic Web 19
The Social Web 20
3d Interactive Web 21
Artificial Intelligence 21
Decentralized Technology 22
Nfts 23
Smart Contracts 23
Blockchain 24
Benefits Of These Features Include 24
Anti-Monopoly 24
Compatibility 25
Data Control & Ownership 25
No Restrictions Access 26

The Arrival Of Web 3.0 And The Transformation Of


Traditional Business Models 27
Daos, The Future Of Work 28
Social Tokens For Creators And Artists 29
Nft Membership Daos 31

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Why Should Businesses Embrace Web 3.0? 32


Anti-Monopoly 32
Permissionless Blockchain 33
Interoperability 33
Data Ownership And Control 33

Real-Life Web 3.0 Examples Across Industries 35


Social Networks 35
Mastodon 36
Steemit 36
Sapien 37
Exchange Services 37
Idex 38
Bitfinex 38
Remote Job 39
Cryptotask 39
Atlas 40
Ethlance 40
Streaming 41
Lbry 41
Livepeer 42
Ujomusic 42
Insurance And Banking 42
Cashaa 43
Everledger 43
Storage 44
Filecoin 44
Sia 45
Messaging 45
Ysign 46

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Secretum 46
Status 46
Browser 47
Beaker Browser 47
Brave 48

What Is The Business Model For A Web3 Company? 49


Case Study Of A Web3 Business Model 50

Emerging Web 3.0 Business Models 53


Issuing A Native Asset 53
Holding The Native Asset, Building The Network 54
Taxation On Speculation (Exchanges) 55
Payment Tokens 55
Burn Tokens 56
Work Tokens 56
Other Models 57
Blockchain As A Service (Baas) 58
How Does The Blockchain-As-A-Service Business
Model Work? 58
Example Of Blockchain-As-A-Service (Baas) 59
How Blockchain-As-A-Service Is Shaping Businesses
60
Baas For Startups 61
Industry-Wise Use Cases Of Blockchain-As-A-Service
61
Healthcare 62
Automotive 62
Fintech 63
Transportation And Logistics 64
Document Tracking 64
Data Storage 64

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Contract Execution 65
Low-Code And No-Code Web3 65
Event Ticketing Marketplace 66
Example Of Event Ticketing Business Model 67

Web3 Business Models Examples 69


Bitcoin 69
More About Bitcoin 70
Ethereum 71
Solana Is A Blockchain 72
Basic Attention Token 73
Erc20 Utility Token 74

How Do Web 3.0 Business Models Make Money? 76

Web3 Network Effects 80


Network Effects In Web2 Vs Web3 80
Mental Models 82
Nature Of Value 82
Managing Market Activity Vs. Market Infrastructure 84
Countering, Switching, And Building For Defensibility
85
Managing Extraction 86
Crypto & Nfts: Network Effects In Web3 87
Ethereum: Layer 1 Protocol 87
Ethereum Blockchain And Ether Token (Interaction
Network) 88
Ethereum Smart Contracts (Platform) 90
Composability (Interaction Network) 92
Axie Infinity: Play-To-Earn Nft Game 94
P2e Game (Interaction Network) 94
Axie Marketplace (Marketplace) 96

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Dao (Interaction Network) 97
Axie Infinity Scholarship Programs 99

Conclusion 101

References 102

About The Author 105

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INTRODUCTION
The centralized nature of the internet has led to a number of
problems. For one, it has made it easy for governments to
censor content and restrict access to information. It has also
allowed media outlets to control the flow of information,
which has led to the spread of misinformation. However,
there is reason to believe that the centralized nature of the
internet is changing. The rise of decentralized technologies
like blockchain and peer-to-peer networking is giving users
more control over their data and giving them the ability to
connect with each other directly. This shift could lead to a
more open and decentralized internet, which would be
beneficial for both users and businesses alike. And this
decentralized internet is being brought about by Web 3.0.

Web 3.0 is the next stage of the internet's development,


characterized by a move away from centralized platforms and
towards decentralization. This shift has been driven by a
number of factors, including the increasing power of
governments and media outlets. By decentralizing the web,
individuals will have more control over their data and how it is
used. In addition, decentralized systems are more resistant to
censorship and other forms of control. As a result, Web 3.0
promises to be a more open, democratic internet that better
reflects the needs of its users.

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WHAT IS WEB 3.0?

Web 2.0 was all about centralized platforms that allowed


users to interact with each other and share information.
However, in recent years, there has been a shift towards
decentralization, with a new generation of technologies that
allow users to take back control of their data. This is what is
known as Web 3.0. Instead of relying on centralized
government or media outlets, users can now access
information directly from the source. This decentralized
approach has many advantages, including greater security
and privacy, as well as more democratic decision-making. In
the coming years, we are likely to see more and more
platforms moving to a Web 3.0 model.

Web 3.0 is a term that is used to describe the next generation


of the World Wide Web. It is characterized by features such as
increased interoperability, personalization, and data
integration. In addition, Web 3.0 applications are designed to
be more user-friendly and allow for greater collaboration
between users. One of the main goals of Web 3.0 is to make
the web more intelligent and efficient in order to meet the
needs of the growing number of internet users. While the
term Web 3.0 is still in its early stages, it has the potential to
revolutionize the way we use the internet and how we
interact with each other online.

With Web 3.0, there is no need for centralized servers, as


data is stored on a decentralized network. This means that
users can access their data from anywhere in the world,
without having to rely on a single point of failure. Web 3.0 is
also more secure than previous versions of the internet, as

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data is encrypted and stored on a blockchain. This makes it
impossible for hackers to access or tamper with data. Finally,
Web 3.0 is designed to be more user-friendly and efficient
than previous versions of the internet. In short, Web 3.0 is a
more secure, efficient, and user-friendly version of the
internet that gives users more control over their data.

There are two key foundational changes to the internet that


Web3 enables:

1. Digital Ownership:

The ability to directly hold digital assets without the


necessity for a third party to act as a custodian for such
assets. In addition to monetary value, we can do this with
almost anything that exists on or off the blockchain
(equity, certificates, etc.) by using smart contracts.

2. Interoperability of you and your digital goods across


the internet:

Because of Web3's interoperability, your cryptocurrency


and Web3 wallet will become your one and only secure
account and profile on the internet. Along with the data
that it carries, it may be dragged and dropped into and
out of other applications. When you transition from one
platform to another, you won't have to worry about having
to remember dozens, or even hundreds, of different logins
and passwords.

Nevertheless, this is not all. Even while you're out and


about in the real world, the programmability of Web3
takes the experience to a whole new level. It provides the
ability to develop any sort of program based on the
activities and digital assets included in your wallet. To put
it another way, based on the user's wallet, Web3 allows
developers to easily develop a wide range of creative

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experiences, authorize access, provide certain content,
and so on.

The Evolution from Web 1.0 to


3.0
Web 1.0, which was the first version of the World Wide Web,
was limited in many ways. The primary goal of Web 1.0 was to
provide people with a way to access information. To do this,
web pages were created that were largely static and did not
allow for much interaction. Web 2.0, which emerged in the
early 2000s, sought to address some of the limitations of
Web 1.0.

Web 2.0 introduced dynamic web pages and social media


platforms that brought people together and allowed them to
interact with each other in new ways. Web 3.0, which is still in
development, takes this one step further by using artificial
intelligence and other advanced technologies to make the
web more personal and responsive to individual users. As we
can see, the evolution from Web 1.0 to Web 3.0 has been
marked by increasing levels of interactivity and
customization.

Web 1.0, Web 2.0, and Web 3.0


Web 1.0 was the first generation of the World Wide Web, and
it was defined by a few key features. First, web pages were
mostly static, meaning that they did not change based on
user input. Second, web pages were typically developed by a
single author or organization, and they were not meant to be
collaboratively edited. Third, the focus of Web 1.0 was on
providing information rather than facilitating communication.
These features made Web 1.0 very different from the web 2.0
that would come later. While Web 1.0 was an important step in

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the development of the Internet, it was only the beginning of
what would become a truly global communications network.

Web 2.0 is the term given to the second generation of the


World Wide Web, which refers to a more interactive and
collaborative online experience. The term was coined in
2004 by Dale Dougherty, and it has since been adopted by
Web developers and users alike. While the first generation of
the Web was focused on static content and limited user
interaction, Web 2.0 sites are built around user-generated
content, social networking, and other interactive features.
Popular examples of Web 2.0 sites include Facebook, Twitter,
and Wikipedia.

Web 3.0 is the third generation of the World Wide Web, and it
is characterized by increased semantic understanding and
web user interfaces that are more natural and efficient. Web
3.0 technologies are designed to make the web more
intuitive and user-friendly, and they include things like
artificial intelligence, natural language processing, and virtual
reality. While these technologies are still in their nascent
stages, they have the potential to transform the way we use
the internet and make it easier than ever to find the
information we need.

In addition, Web 3.0 could also lead to a more decentralized


web where users have more control over their data. For
example, instead of relying on centralized social media
platforms, users could connect directly using peer-to-peer
networks. Ultimately, Web 3.0 has the potential to create a
more efficient, user-friendly, and decentralized web that could
greatly improve our online experience.

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Web 2.0 vs Web3


With the launch of the World Wide Web in 1991, the internet
as we know it was born. Since then, the web has undergone
several major evolutionary steps, each building on the
foundation of the last. The first major evolution, known as
Web 2.0, was driven by the rise of social media and the
smartphone. This shift ushered in a new era of
user-generated content and gave rise to major platforms,
such as Facebook, YouTube, and Twitter.

Now, we are on the cusp of another major evolution with the


advent of Web 3.0. This next phase of the web will be
powered by artificial intelligence and machine learning,
enabling humans and computers to interact in ways that were
once impossible. With Web 3.0, we will see a more
personalized and semantic web that is better able to
understand our needs and provide us with relevant
information. In short, Web 3.0 promises to be a game-changer
for the internet, and we are just beginning to scratch the
surface of its potential.

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It's been more than a decade since the term "Web 2.0" was
first coined, but there's still no consensus on what it actually
means. Broadly speaking, Web 2.0 refers to the shift from
static websites to dynamic, interactive applications — think
Facebook, Google Maps, and Wikipedia. But while the term is
often used to describe the current state of the web, it's also
frequently used to describe the direction the web is headed.
This is where Web 3.0 comes in.

Web 3.0 is often described as the "semantic web", where data


is meaningfully interconnected and can be understood by
machines. This vision of the web has been slowly but steadily
taking shape with the rise of linked data standards like
schema.org, as well as new technologies like NFTs and
blockchain tokens. Linked data ensures that data is
interoperable — meaning it can be easily shared and reused
across different platforms and applications. Plus, NFTs and
tokens provide a way to monetize data and incentivize its
creation, making it possible to build a decentralized economy
around it. In other words, Web 3.0 is about making the web
smarter, more connected, and more valuable.

Web3, decentralization, and


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Blockchain
The internet as we know it today is centralized. That means
that there are a few powerful companies that control most of
the data and traffic on the web. This centralized model has a
lot of advantages, but it also comes with some serious
drawbacks. For example, centralized networks are much
more vulnerable to attack than decentralized ones. They're
also subject to censorship and government control. Finally,
centralized networks typically require users to give up their
data, which can be a major privacy concern.

Enter Blockchain and Web3. Blockchain is a new technology


that enables decentralization by allowing data to be stored in
an immutable, encrypted ledger. Cryptocurrency is one
popular use case for blockchain, but the technology has
many other potential applications. For example, blockchain
could be used to create decentralized social networks or
marketplaces. The possibilities are endless.

Centralized systems have their drawbacks, but the


decentralization offered by Web3 and blockchain comes with
its own set of challenges. For example, distributed systems
are often less efficient than centralized ones. They can also
be more difficult to manage and scale. Despite these
challenges, the promise of decentralization is too great to
ignore.

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WHAT ARE THE CORE


CHARACTERISTICS OF
WEB3?

The concept of Web 3.0 is not as straightforward to define,


but it's possible to make it much more understandable by
looking at the following specific innovations and practices
that explain this shift:

Semantic Web
The semantic web is sometimes referred to as Web 3.0, and it
represents a vision of the future where machines will be able
to understand and interpret the meaning of the information
on the internet. This will enable them to provide intelligent
search results and make better decisions on behalf of their
users.

The semantic web relies on standards such as Resource


Description Framework (RDF) and Web Ontology Language
(OWL), which define how data should be structured and
annotated. In addition, the semantic web relies on knowledge
graphs, which are structured databases of knowledge that
can be used by machines to understand the relationships
between concepts. The development of the semantic web is
ongoing, and it holds great potential to transform how we
interact with the internet.

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The Social Web


The most significant difference between Web 2.0 and the
earlier version of the web is that Web 2.0 focused on social
interaction. While the early web was mostly used for viewing
static pages of text, Web 2.0 allowed users to interact with
each other and with data in a much more dynamic way. Web
3.0 hopes to improve upon this, it will make possible the use
of new technologies such as artificial intelligence and virtual
reality in user-centric creation and sharing of information. As
a result, the social web will become much more immersive
and interactive, providing a unique experience for users.

3D Interactive Web
The internet has come a long way since its humble
beginnings as a static, two-dimensional network of text and
images. With the advent of web 2.0, we saw the introduction
of dynamic content, social media, and other collaborative
features that transformed the internet into a more engaging
and interactive experience.

Now, with web 3.0, we are on the verge of a new era of


three-dimensional, virtual reality-based web browsing and
communication. By harnessing the power of cutting-edge
technologies like augmented reality and virtual reality, web
3.0 will provide users with an immersive, interactive
experience that is unlike anything that has come before. With
web 3.0, the internet will finally become a truly
three-dimensional space where users can interact with each
other and with content in ways that are both natural and
intuitive. In short, web 3.0 promises to revolutionize the way
we use the internet, and it is certain to have a profound
impact on our lives in the years to come.

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Artificial intelligence
Web 3.0 promises to be more interactive and personalized
than ever before. At its core, Web 3.0 is about deciphering
real information from fake information. It is about
understanding the intention of the user and providing them
with what they are looking for. To achieve this, Web 3.0 relies
on artificial intelligence to decrypt natural language and
mimic human interaction. This promises to revolutionize the
way we use the internet, making it more intuitive and
user-friendly than ever before.

As we enter the era of Web 3.0, artificial intelligence is poised


to play a major role in shaping the future of the internet. With
the growing popularity of smart devices and voice-activated
assistants, AI is becoming more and more integrated into our
everyday lives. However, the potential applications of AI go
far beyond these consumer-facing applications. Currently, in
the business world, AI can be used to automate repetitive
tasks, freeing up employees to focus on higher-level work. In
the healthcare industry, AI can be used to diagnose diseases
and develop personalized treatments. And in the field of
transportation, AI is being used to develop self-driving cars
and other autonomous vehicles. As AI continues to evolve, its
potential uses are only limited by our imagination.

Decentralized Technology
Put simply, Web 3.0 is a decentralized approach to
technology that gives users more control over their data and
how it is used. This is in contrast to the traditional
“centralized” model, where a few large companies control the
flow of information. With Web 3.0, there is no need for these
middlemen — instead, users can interact directly with each

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other. This has a number of advantages.

For example, it makes it much harder for data to be censored,


as well as stolen, or lost, as there is no central point of failure.
It also gives users more control over their privacy, as they can
choose who to share their data with. In addition,
decentralized technologies are often faster and more efficient
than centralized ones, as they don’t have to rely on a single
company to provide all the infrastructure. Web 3.0 is still in its
early stages, but it is clear that it has the potential to
revolutionize the way we use the internet.

As the web continues to evolve, it has taken on a new form in


Web 3.0 which features decentralized technology requiring
no controlling nodes for operation; this makes it more
sophisticated than traditional web page development
because of its use of various building blocks including:

NFTs
NFTs are digital assets that are stored on a blockchain. Unlike
traditional cryptocurrencies, NFTs are not interchangeable —
each NFT is unique and can represent anything from a piece
of art to a virtual world. While NFTs are still in their early days,
they have the potential to revolutionize the way we interact
with digital content. For example, NFTs could be used to
create unique digital experiences that cannot be replicated or
counterfeited. In addition, NFTs could also be used to create
new types of marketplaces where people can buy and sell
digital assets. Ultimately, NFTs have the potential to change
the way we think about ownership and value in the digital
age.

Smart contracts
A smart contract is a computer protocol that facilitates,
verifies, or enforces the negotiation or performance of a
contract. Smart contracts were first proposed by Nick Szabo
in 1996.

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The general purpose of a smart contract is to automate the


enforcement of a contract when certain conditions are met;
however, smart contracts can also be used to automatically
make payments, hold assets, and manage complex financial
instruments. Smart contracts are often written in code and run
on a blockchain; however, they can also be run on other
platforms. One advantage of using smart contracts is that
they can help to reduce the risk of fraud; however, they are
not without their challenges. For example, if a smart contract
contains errors, it may be difficult or even impossible to fix
them.

Blockchain
Blockchain is a distributed database that allows for secure,
transparent, and tamper-proof transactions. In other words, it
is a digital ledger of all transactions that have ever been
made, which is constantly growing as "completed" blocks are
added to it with a new set of recordings. Each block contains
a cryptographic hash of the previous block, a timestamp, and
transaction data.

Bitcoin, the first and most well-known cryptocurrency, is


based on blockchain technology. Ethereum, another popular
cryptocurrency, also uses blockchain but with a different
purpose: smart contracts. Many believe that blockchain has
the potential to revolutionize not just the financial sector but
also many other industries such as health care, real estate,
and even voting.

Benefits of these features


include
Anti-Monopoly

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Web 3.0 promises to bring a number of benefits to users. One
of the most important is increased privacy. With Web 3.0,
individuals will have more control over their data, and it will
be harder for corporations to track and sell it. This will lead to
fewer incidents of data privacy intrusions, and it will give
people more control over how their data is used. In addition,
Web 3.0 features will make it easier for new and small
businesses to compete with larger corporations.

The dominance of digital corporations will disappear as the


playing field is leveled, and this will provide a number of
benefits to consumers. Finally, Web 3.0 will help to prevent
monopoly power from being abused. The decentralization of
the internet will make it harder for any one company to
control the market, and this will lead to more competition and
lower prices.

Compatibility
The goal of Web 3.0 is to create a more decentralized
internet that is powered by blockchain technology and
peer-to-peer networking. One of the challenges in achieving
this goal is compatibility. One way to solve this problem is by
using dApps (decentralized applications) built on Web 3.0,
compatible with a wide range of devices, operating systems,
and browsers.

Fortunately, there are a number of initiatives underway to


address this challenge. For example, the dApp Development
Framework is designed to enable dApps to run on both iOS
and Android devices. In addition, the InterPlanetary File
System (IPFS) is working to create a decentralized network
that can store and share data across a variety of platforms. By
addressing the issue of compatibility, these and other
projects are helping to lay the foundation for a truly
decentralized internet.

Data Control & Ownership

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With the launch of web 3.0, there is a shift in the way data is
controlled and owned. In the past, data has been stored
centrally on servers owned by companies like Facebook and
Google.

However, in web 3.0, data is instead stored on a


decentralized network of computers, known as the
blockchain. This means that data is not owned by any one
entity, but is instead distributed amongst many different
computers. This has a number of advantages, including
increased security and privacy, as well as improved resilience
in the event of a hack or outage. However, it also comes with
some potential challenges, such as the need for new ways to
control and access data.

Nonetheless, the launch of web 3.0 represents a major shift


in the way data is controlled and owned, with potentially
far-reaching implications and benefits for both individuals and
businesses.

No Restrictions Access
In Web 3.0, everything will be handled automatically by
computers and other smart devices, negating the necessity
for service providers. Businesses won't have to pay exorbitant
charges to get the services they need as a result, which will
cut their operational costs and enable them to interact with
clients and suppliers more quickly and efficiently.

With the advent of Web 3.0, businesses will enjoy a number


of benefits that were not possible with earlier versions of the
web. One of the most significant advantages is that
everything will be handled automatically by computers and
smart gadgets, eliminating the need for service providers.
This will allow businesses to save money on service fees and
to do business more efficiently with customers and suppliers.
In addition, automated systems will result in fewer errors and
faster transactions, improving customer satisfaction and

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making it easier to conduct business on a global scale. Web
3.0 represents a major shift in the way businesses operate,
and those who can embrace it will enjoy a significant
competitive advantage.

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THE ARRIVAL OF WEB 3.0


AND THE
TRANSFORMATION OF
TRADITIONAL BUSINESS
MODELS

Web 3.0 is being heralded as a major shift in the way we


interact with the internet. With the advent of blockchain
technology and the rise of decentralized applications, there is
a growing movement towards a more open and collaborative
web. This new model of the internet presents a number of
challenges for traditional businesses.

Firstly, Web 3.0 is built on principles of decentralization, which


runs counter to the centralized model of most businesses.
Secondly, the power is shifting from large institutions to
individuals and communities. This shift is already underway,
as evidenced by the success of platforms like Airbnb and
Uber in other industries. Finally, Web 3.0 is still in its early
stages, which means that it is constantly evolving and
business models that worked yesterday may not be relevant
tomorrow. As such, traditional businesses need to be ready to
adapt to this new landscape or risk being left behind.

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DAOs, the future of work


Decentralized Autonomous Organizations (DAOs) are a new
type of organization that is emerging in the Web 3.0 era.
DAOs are organizations that are run by a community of
people who work together online. They are decentralized,
meaning that there is no central authority or hierarchy.
Instead, decisions are made democratically by the
community. DAOs are also autonomous, meaning that they
are self-governing and self-sustaining. This new type of
organization is made possible by technologies such as
blockchain, which allows for trustless collaboration and
transparent decision-making.

DAOs offer a number of advantages over traditional


organizations. For example, they are more agile and resilient,
because they can make decisions quickly and adapt to
change more easily. They are also more inclusive since
anyone can participate in a DAO regardless of their location
or background. Moreover, DAOs have the potential to be
more efficient and effective than traditional organizations,
because they can harness the power of collective
intelligence.

The traditional resume may soon become a thing of the past,


thanks to the rise of DAOs. In the world of Web3, companies
will be organized as DAOs or decentralized autonomous
organizations. Rather than relying on CVs and other
traditional methods of assessing job candidates, DAOs
instead focus on rewarding individuals for their contributions
in the present. This shift is already underway, and it's being
driven by the rise of blockchain technology. With blockchain,
it's possible to track an individual's contributions, making it
easier to assess their value to a given organization. As a
result, DAOs are able to identify and reward top performers
much more quickly and efficiently than traditional companies.

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In the future, DAOs are likely to become the dominant form of
business organization, and the traditional CV will become
increasingly irrelevant.

Social tokens for creators


and artists
The age of social media has created new opportunities for
creators and artists to connect with their audiences and build
a following. However, the traditional model of social media
relies on advertising revenue to support content creators.
This can result in a number of problems, including a lack of
transparency and control over the user experience. Enter
Web 3.0, a new model supporting creators and artists that is
based on decentralized technologies.

With Web 3.0, content creators can use social tokens to


directly monetize their work. This not only gives them more
control over their income, but also allows them to build a
more direct relationship with their audience. In addition,
social tokens can be used to fund projects and support
creativity, without the need for traditional investors.

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Social tokens are a new way for creators and artists to raise
funding and build communities. By selling tokens, creators
can offer supporters a way to co-own their community and
future revenue. This innovative model has the potential to
revolutionize the way creators engage with their fans and
generate income. Social tokens also offer a number of other
benefits, such as enabling direct tipping, micropayments, and
subscription models. In addition, social tokens can be used to
create exclusive content, vote in polls, receive discounts on
products, reward early adopters, and unlock new features for
token holders. With so many advantages, it's no wonder that
social tokens are quickly gaining popularity among creators
and artists.

As the world of social media evolves, Web 3.0 and social


tokens offer a new way for creators and artists to build a
sustainable business.

NFT membership DAOs


NFTs, or non-fungible tokens, are a type of cryptocurrency
that represents a unique asset. NFTs can be used to
represent digital art, collectibles, and other experiences.

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Unlike other types of cryptocurrency, NFTs cannot be
interchanged or substituted.

This uniqueness makes NFTs well suited for use as a


currency in digital worlds and communities. NFT membership
DAOs are organizations that use NFTs to represent the
membership. NFT membership DAOs can be used to
represent anything from online clubs to decentralized
autonomous organizations.

NFT membership DAOs offer a number of advantages over


traditional organizations. They are borderless and can easily
be created without the need for legal or financial services.
NFT membership DAOs also offer transparency and
immutability; all transactions are stored on the blockchain,
making them public and permanent. Finally, NFT membership
DAOs are tamper-resistant; once an NFT is minted, it cannot
be changed or counterfeited. These features make NFT
membership DAOs an attractive option for those looking to
create or join digital communities.

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WHY SHOULD BUSINESSES


EMBRACE WEB 3.0?

Anti-monopoly
While the benefits of a decentralized web are numerous, the
transition will not be without its challenges. Perhaps the most
significant challenge will be for companies that have been
built on the premise of collecting and selling user data. These
companies will need to find new ways to generate revenue,
as users will now have full control over their data and can
choose to share it or keep it private.

This shift could lead to a more transparent market as


companies will need to compete based on providing quality
products and services rather than selling user data. In
addition, the adoption of Web 3.0 will require a rethinking of
business models, as the traditional model of advertising will
no longer be viable.

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Permissionless blockchain
In a world where trust is often in short supply, the
decentralized nature of blockchain technology comes as a
refreshing change. With no central authority controlling the
network, there is no risk of any one party manipulating the
data for their benefit. This also means that there is no bias or
discrimination in the system, as everyone is treated equally.
This makes it an attractive proposition for businesses, which
can quickly and easily transfer digital assets across borders
without worrying about the reliability or security of the
process. Ultimately, blockchain technology has the potential
to revolutionize the way we interact with the world around us,
and it is only just beginning to be understood.

Interoperability
One of the most exciting aspects of Web 3.0 is its
cross-platform compatibility. Unlike previous versions of the
web, which were designed primarily for computers and
smartphones, Web 3.0 will run on any device or platform.
Businesses and people who develop web applications will be
glad to hear this, as it will no longer be necessary to develop
separate versions of apps for different operating systems.

Data ownership and control


The current centralized model of the internet is based on
user data being owned and controlled by a few large
corporations. This model has led to numerous privacy
scandals and has made it difficult for users to control their
data.

However, new decentralized web 3.0 technologies are


beginning to emerge that will eventually enable users to take
full control of their data. With data ownership in the hands of
users, companies will no longer have to worry about
complying with inconvenient regulations. Clients will decide
which part of their data they are willing to share. This shift will

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have a major impact on the way businesses operate, and will
give users much greater control over their data.

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REAL-LIFE WEB 3.0


EXAMPLES ACROSS
INDUSTRIES

Social Networks
The rise of social media networks has been one of the most
defining features of the internet in the past decade. With
billions of users worldwide, these platforms have become a
central part of many people's lives. However, there are
growing concerns about the way these networks are
operated. In particular, there are worries about censorship,
data misuse, and surveillance.

Unlike its predecessors, Web 3.0 is designed to be

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privacy-centric, transparent, and open-source. This new
generation of social networks is still in its early stages of
development, but there are already a number of promising
projects underway. With their focus on privacy and
decentralization, these platforms have the potential to
address many of the concerns that have been raised about
social media networks. As they continue to grow and
develop, they could help to shape the future of the internet in
a more positive direction.

Check out these examples of Web 3.0 social networks:

Mastodon
Twitter is one of the most popular social media platforms in
the world. It allows users to share short updates, or "tweets",
with their followers. However, Twitter is also owned by a
corporation, and it relies on advertising to generate revenue.
This can create a number of problems, including the fact that
ads can be intrusive and disruptive. Additionally, corporate
ownership can lead to censorship and other forms of control.

Mastodon is a social media platform that seeks to address


these issues. Like Twitter, it allows users to share brief
updates with their followers. However, Mastodon is owned by
a community of individuals, and it does not rely on advertising
for revenue. This means that Mastodon is more resistant to
censorship and other forms of control. Additionally, it allows
users to choose from a variety of different "instances", or
communities, each with its own rules and guidelines. As a
result, Mastodon provides a unique and customizable social
media experience.

Steemit
Steemit is a community-driven content-creation and
monetization platform. It runs on the Steem blockchain, which
is a decentralized, peer-to-peer network. The Steemit

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community consists of a group of individuals who contribute
their time and resources to help people create and monetize
their content. The Steemit platform enables users to earn
rewards for their contributions, which are then used to
finance the development of the platform and its content. The
Steemit community is thus self-sustaining and provides a
valuable service to its members.

Sapien
Sapien is a social news network that leverages the power of
blockchain technology to reward content creators and give
users more control over their data. The Sapien Network is
built on the Ethereum blockchain and utilizes smart contracts
to facilitate transactions. Users of the platform can earn SPN
tokens by creating or curating content. These tokens can
then be used to purchase premium content or services, tip
other users, or stake governance rights.

In addition, every user on the network is given an NFT


passport, which allows them to access the Sapient
metaverse. The passport includes a digital identity and
profile, as well as a list of achievements and
accomplishments. The Sapien Network provides a unique
opportunity for users to be rewarded for their contributions
and to participate in a growing ecosystem of decentralized
applications.

Exchange Services
Traditional exchanges have many disadvantages compared to
decentralized ones. They are less prone to hacks because
they do not have a central point of failure. Additionally, they
offer cheaper transactions because there are no middlemen
involved. On top of that, they work with hardware wallets,
which are considered to be the most secure way to store
cryptocurrencies. This enables users to take control of their

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funds and avoid having to trust a third party with their money.
Overall, decentralized exchanges offer a more secure and
efficient way of trading cryptocurrencies.

Examples of Web 3.0 apps that provide exchange services


include:

IDEX
IDEX is a centralized exchange that allows for the trading of
cryptocurrencies. It is built on the Ethereum network and
requires an Ethereum wallet in order to trade. IDEX boasts a
convenient UI and is open to anyone who has an Ethereum
wallet.

The exchange has been operational since 2017 and is one of


the most popular exchanges in the world. In 2019, IDEX was
ranked as the #1 ETH-based decentralized exchange by
volume. IDEX allows for the buying and selling of ETH, ERC20
tokens, and other crypto assets. It also provides users with a
real-time view of the market and allows them to set up price
alerts. IDEX is a secure and reliable exchange that provides
users with a great way to trade cryptocurrencies.

Bitfinex
Bitfinex is a digital asset trading platform offering
state-of-the-art services for digital currency traders and global
liquidity providers. It offers a suite of order types to give
traders the tools they need to trade any market. Its OTC desk
is one of the most active in the industry, providing an
institutional-grade service to large buy and sell orders. They
also offer high-margin trading leverage on BTC, ETH, and
USDT pairs.

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Remote Job
The freelance marketplace is a robust and growing industry.
According to a recent study, the freelance economy has
grown by 3.7 million since 2014 and is currently worth $1.4
trillion. The study also predicts that by 2027, nearly half of the
U.S. workforce will be freelancers.

There are many reasons for this growth, but one of the most
significant is the rise of the internet and the ability to connect
with clients and contractors from anywhere in the world.
Another key factor is the increasing popularity of Web3
technologies, which offer a number of advantages for
freelancers and remote job platforms.

Some of the most popular Web3 freelancing platforms are


CryptoTask, Atlas, and Ethlance. These platforms allow users
to connect with each other directly and exchange
cryptocurrencies without the need for a central authority or
middleman. This decentralized approach has many benefits,
including lower fees, no centralized management, and
increased security. In addition, these platforms enable
cryptocurrency exchange between parties, which can be
beneficial for both freelancers and clients.

As the freelance economy continues to grow, it's likely that


we will see more platforms embrace Web3 technologies. This
would provide even more opportunities for freelancers to
connect with clients.

CryptoTask
CryptoTask is a blockchain-based freelancing platform that
helps businesses connect with talented freelancers from
around the world. The platform is free of charge for
freelancers, and it offers a wide range of features to help
businesses find the right workers for their blockchain

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projects. With CryptoTask, businesses can post detailed
descriptions of their project requirements, and then receive
proposals from qualified freelancers. The platform also allows
businesses to efficiently manage their projects, track
progress, and make payments using cryptocurrency. And
because all data on the platform is stored on the blockchain,
businesses can be confident that their information is secure
and transparent.

Atlas
Atlas is a remote job platform that offers a variety of benefits
for both employers and workers. For employers, the rates are
fixed at $2 per job, which makes it easy to budget for
projects. In addition, Atlas.Work offers a dispute resolution
system powered by smart contracts, which can help to
resolve disagreements between parties. For workers, the
platform offers a variety of job opportunities that can be
accessed from anywhere in the world.

Ethlance
Ethlance is the first freelancing marketplace powered by the
Ethereum blockchain. It enables workers to get hired and
paid in Ether currency, without any intermediary fees. The
advantage of using blockchain technology is that it makes the
platform more secure and transparent. All payments are
made directly between the employer and employee, with no
need for a third party. Ethlance is also designed to be
censorship-resistant, so freelancers can offer their services
without fear of being blocked or removed. In addition, the
platform offers a number of features that are designed to help
freelancers find work and get paid, including a built-in
portfolio and escrow system. Overall, Ethlance is a powerful
freelancing tool that has the potential to revolutionize the way
work is done online.

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Streaming
It's no secret that copyright infringement is a big problem on
the internet. Whether it's pirated movies, music, or software,
there's always someone out there looking to make a quick
buck by selling someone else's work. This has been a major
issue for content creators, who have seen their work stolen
and resold without any compensation. However, there is
hope on the horizon in the form of Web 3.0 streaming
platforms.

These new platforms are designed to eliminate copyright


infringement by ensuring that all content is properly licensed
and compensated. In addition, they provide fair conditions for
all streamers, performers, and content creators so that they
can promote their products. As more people migrate to these
new platforms, we will finally see an end to the widespread
piracy of online content.

Web 3.0 streaming apps include the following examples:

LBRY
LBRY is a free web-based library for all types of digital
content that users may watch, read and listen to. It’s also one
of the oldest distributed services out there. LBRY was created
in 2015, a short while before popularizing the term
"blockchain", in order to provide an open and decentralized
solution to the frequent commercialization and
monopolization of digital content by a few giant corporations.

The LBRY network is powered by the LBC token, which


allows users to earn rewards for their contributions to the
library, as well as access premium content. In addition to
being censorship-resistant and immune to takedowns, LBRY
is also customizable and user-friendly, making it a great
option for those looking for an alternative to traditional

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libraries.

Livepeer
In a world that is increasingly reliant on online video, the
need for a decentralized and censorship-resistant streaming
platform is more evident than ever. That's where Livepeer
comes in. By building on the Ethereum blockchain, Livepeer
provides a decentralized platform that is resistant to
censorship and secure from tampering. The platform is
designed to be highly scalable, meaning that it can handle a
large number of users with minimal impact on performance. In
addition, Livepeer is completely open-source, meaning that
anyone can contribute to its development. As the world
continues to move online, platforms like Livepeer will become
increasingly important.

UjoMusic
UjoMusic is a web-based application that enables musicians
to upload their works and share them with the world. The
application also eliminates copyright issues, making it easy
for artists to monetize their work. UjoMusic was created by a
team of music lovers who wanted to make it easier for artists
to share their work. The application has been designed to be
user-friendly and easy to use. In addition, UjoMusic offers a
variety of features that make it an essential tool for any
musician. With UjoMusic, you can upload your music, create a
profile, and connect with other musicians. UjoMusic is the
future of music sharing, and it is changing the way that
musicians interact with the world.

Insurance and Banking


The banking and insurance sector is under constant pressure
to improve security, transparency, and compliance. In
response, many organizations are turning to Web 3.0
technologies and tools. A decentralized approach provides

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better security by distributing data and processing power
across a network of computers. This makes it more difficult
for hackers to access sensitive information.

In addition, smart contracts can automate routine processes


and eliminate the need for paper documents. This not only
saves time, but also reduces the risk of errors and fraud. As a
result, the use of Web 3.0 technologies can help banks and
insurers improve security, transparency, and compliance.

Web 3.0 applications that provide insurance and banking


services include:

Cashaa
Cashaa is a global banking platform that serves corporate
clients and individuals. It offers a crypto loan, investment, and
NTF trading service through an app. The app allows users to
manage their crypto and fiat currencies. It also provides a
way to invest in, trade, and borrow against crypto assets.
Cashaa is a member of the Blockchain Consortium and is
licensed by the UK Financial Conduct Authority. The company
was founded in 2016 and is based in London, England.

Everledger
Everledger is a blockchain-based platform that helps banks
and insurers to prevent fraud and track provenance. The
platform provides verified information about organizations
and products, which can be used to verify the authenticity of
luxury goods, diamonds, and other high-value items.

Everledger also offers a traceability solution for global supply


chains, which allows participants to track the movement of
goods across the supply chain. The platform is built on the
IBM blockchain, and all data is stored on the blockchain itself.
This ensures that data cannot be tampered with or deleted
and that it is available to all participants in the network.
Everledger has already been successfully used to track

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diamonds, and the company is now expanding its operations
to include other luxury goods and commodities.

Storage
In today's digitized world, data is one of the most valuable
commodities. That's why it's so important to have secure data
storage. With traditional centralized data storage systems,
there is always the risk of data theft or hijacking. However,
with Web 3.0 and dApps, data is split into chunks and
transmitted through encrypted peer-to-peer connections. This
makes it impossible for data to be stolen or hijacked.

Furthermore, since there is no central server for storing data


in the dApps world, there is no possibility for third parties to
access or control users' data. In other words, dApps provide
the highest level of security for data storage. As more and
more businesses move their operations online, dApps will
become an essential part of ensuring secure data storage.

The following are a few examples of Web 3.0 storage apps:

Filecoin
Filecoin is a distributed file storage network that offers a
number of advantages over traditional cloud storage
solutions. First, it is perfect for storing large data sets.
Second, it offers higher performance and better
interoperability. Finally, it is just a fraction of the cost of
traditional cloud storage solutions. As a result, Filecoin is an
ideal solution for companies that need to store large amounts
of data.

Filecoin's decentralized design makes it resistant to


censorship and to single points of failure. The Filecoin
network is powered by its native token, FIL. FIL tokens are
used to pay storage providers for their services and to reward

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miners for their work in maintaining the network. Filecoin is
an open-source project with a large and growing community
of developers and users.

Sia
Sia is a decentralized storage service that operates on a
peer-to-peer network. Files are stored on nodes across the
network, and each file is encrypted and split into many small
pieces. The file owner has full control over their encryption
keys, and no one else can access the file without these keys.
Sia is an appealing storage option for individuals and
businesses who are concerned about data security and
privacy. With Sia, there is no single point of failure, and files
are replicated across the network to ensure durability. In
addition, Sia offers competitive pricing, with storage prices
currently at around $2 per terabyte per month.

Messaging
There's no denying that traditional messaging services —
such as WhatsApp and Facebook Messenger — are
somewhat convenient. However, when it comes to privacy,
they leave a lot to be desired. Sure, you can add a layer of
security by using encryption, but at the end of the day, your
messages are still stored on centralized servers that can be
hacked or accessed by government agencies.

That's why more and more people are turning to


decentralized messaging services like Status. These
platforms use peer-to-peer technology to ensure that your
messages are stored only on your device and are not
accessible to anyone else. As a result, they offer a much
higher level of privacy than traditional messaging services.
On top of that, they're also generally faster and more reliable,
making them ideal for both personal and business use.

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Here are some of the best Web 3.0 messaging apps:

ySign
ySign is one of the latest platforms to harness the power of
blockchain. A crypto wallet, message exchange, voice chat
app, and cryptocurrency transfer platform are all available on
ySign. Plus, thanks to the decentralized nature of blockchain,
ySign is incredibly secure and scalable. So whether you're
looking to send money to friends and family or make
international payments, ySign could be the perfect solution.

Secretum
In recent years, there has been a growing trend in combining
messaging and trading applications. A new entrant in this
field is Secretum, which enables users to transfer crypto
assets, including currencies and NFTs. The app is unique in
that it requires only an e-wallet to sign-up. This makes it
extremely easy to use and enables a wide range of people to
trade with each other. The app also has a number of safety
features, which ensure that your assets are protected.

Status
Status is an app that allows users to access the decentralized
web, send cryptocurrency, and chat all in one place. The app
combines a digital wallet, messenger, and Web 3.0 browser,
making it an essential tool for anyone looking to take
advantage of the burgeoning world of cryptocurrencies.
Status is built on Ethereum, meaning that it is able to take
advantage of all the features that Ethereum has to offer. In
addition, the app is fully open source, meaning that anyone
can contribute to its development. As the world of
cryptocurrencies continues to grow, Status will only become
more essential.

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Browser
Most people are aware that their traditional browsers — such
as Microsoft Edge, Apple's Safari, Google Chrome, etc. — are
not entirely private. These browsers collect data on
everything the user does, from the websites they visit, to the
searches they perform. This data is then stored in a central
location, where it can be accessed by anyone with the right
credentials. This leaves users vulnerable to data breaches, as
well as to being tracked and monitored by advertising
companies and other third parties.

Decentralized browsers offer a more private and secure


alternative. They make it much more difficult for anyone to
access or track the user’s data. In addition, decentralized
browsers are often open source, meaning that their code is
available for anyone to audit and improve. As a result, they
are constantly being improved and updated, making them
more secure and private over time.

Decentralized browser applications for Web 3.0 include:

Beaker Browser
In addition to providing users with a private and secure
browsing experience, the Beaker Browser also offers website
hosting and building capabilities. This makes it an ideal
platform for those who wish to create and host their own
websites. The browser employs a unique peer-to-peer
networking protocol that allows users to connect directly with
each other, without the need for a central server. This
provides a number of advantages, including increased
security and privacy, as well as faster speeds.

Furthermore, the Beaker Browser is fully compatible with


both conventional and decentralized web applications. This
makes it possible to find and use a wide variety of web-based

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services and applications. As such, the Beaker Browser
provides users with a unique and powerful tool for browsing,
creating, and hosting websites.

Brave
Having a secure browser is important because the Internet
has become such an integral part of our lives. We use it for
everything from banking to entertainment, and we need to
know that our personal information is safe. That's where
Brave comes in. Brave is a blockchain-powered browser that
is three times faster than Chrome and offers enhanced
security and privacy. Additionally, it has protection from
intrusive ads, which can be a major annoyance when trying to
browse the web. And best of all, it features a built-in crypto
wallet, so you can easily and securely store your digital
currency.

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WHAT IS THE BUSINESS


MODEL FOR A WEB3
COMPANY?

How a Web 3 company generates value, delivers, and


captures it is referred to as its business model. Out of the
three processes, most Web 3 companies focus on just one or
two, but not all three.

This means:

● They cannot deliver or capture value, however, they


can generate it;

● They cannot capture value, however, they can


generate and deliver it;

● They can only capture value, they cannot generate or


deliver it.

When one considers that during the dot com craze, some of
these same growth issues were experienced, these shouldn't
come as a surprise.

All these business model problems arise as a result of the


fact that when a new technology is introduced, it doesn't
initially come with a business model. The business model is
usually developed later after a lot of trial and error.

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Case Study of a Web3 Business


Model
Stepn is a good illustration of the kind of business that uses a
Web 3 business model.

Stepn encourages individuals to walk, jog, and run outside by


rewarding them with points and NFTs.

The majority of Stepn's customers are those who like walking,


jogging, or running and are also familiar with using
technology. Web3 is now confronted with a plethora of
challenges, the most significant of which is the absence of
cohesion in the procedures, tools, and skills that are
necessary to get started. To start, they need to have a
fundamental familiarity with Web 3.0 technology, but they do
not necessarily need to be specialists in the field.

The value proposition offered by Stepn reduces the barrier to


accessing Web3 in an effort to make the process of using its
product easier. In addition to this, they want to assist
individuals in maintaining their health while working against
climate change. Stepn contributes a certain amount each
month toward the cost of removing carbon dioxide from the
environment in order to accomplish this goal.

Stepn acquires customers and distributes its products via the


use of third-party platforms such as the App Store, Twitter,
and Discord.

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They develop customer relationships by encouraging


patterns of behavior that easily become routines — habit
formation machines — and by making use of the Web3
Community. The gamification included in the app acts as an
effective technique to ensure the loyalty of customers.
Customers that use NFT have the potential to continue
earning money when they are customizing their own
footwear down the line.

Stepn makes money via a variety of activities like trading,


minting, and renting sneakers. If they do not have them, their
habit formation machine will not work as it should.

The Stepn program uses GPS in the same way as Fitbit does
to track your activity and steps taken throughout the day.
They need to come up with sneaker NFTs that are appealing
and have a robust presence on the internet.

As for resources, they make use of the Web3 App, the NFT
Platform, and the Sneaker NFTS.

The whole of this process calls for financial expenditure,


which is represented in the cost structure of the business
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model used by the organization. In addition to paying for any
potential transaction fees, this takes care of the costs
associated with marketing, software, and the ecosystem.

They now have a collaboration with Binance Labs, but in the


not-too-distant future, there is a possibility that they may
develop agreements with businesses that provide athletic
footwear. Due to the fact that sneaker collecting is so
common among customers, using this tactic would serve
them rather well in terms of their business model.

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EMERGING WEB 3.0


BUSINESS MODELS

In the past decade, initial business models for Web 3.0 were
either not repeatable or scalable and instead attempted to
emulate the business models used in Web 2.0. Despite the
pessimism over their applicability, there is a certainty that the
experiments that are currently being conducted by some of
the most intelligent builders will, within the next few years,
lead to the production of models that are pretty useful.

By evaluating both well-established models and new,


unproven ones, we intend to get some insight into the ways
in which some Web 3.0 business models may increase in
value over the course of the next few years.

Issuing a native asset


Bitcoin was the first cryptocurrency to be created. The Bitcoin
network was responsible for the development of the first
Byzantine Fault Tolerant and fully open P2P networks. These
networks were built with the help of Proof of Work and the
Nakamoto Consensus.

The basis of this business model is Bitcoin (BTC), a digital


asset that can be proven to be scarce and is given out to
miners as a reward for each successfully mined block. The
precedent set by Bitcoin (BTC) and Litecoin (LTC) has been
followed by a plethora of other cryptocurrencies, such as

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Ethereum (ETH), the Monero virtual currency (XMR), and the
ZCash digital currency (ZEC).

By offering a sufficient incentive for honest miners to


contribute their hashing power, the cost for attackers to carry
out an attack grows along with the price of these native
assets. As a result, the increased security raises demand for
this currency, raising its price and worth.

Holding the native asset,


building the network
Among the first cryptocurrency companies to be established
were ones whose sole mission was to boost the profitability
and value of their existing networks. The growth of their
native asset treasury and the establishment of a functioning
ecosystem make up the entirety of their business model. As
one of the most significant Bitcoin Core maintainers,
Blockstream relies on its BTC balance sheet to generate
value for the Bitcoin network. In the meantime, ConsenSys
has expanded to include more than a thousand individuals, all
of whom are committed to increasing the value of the
Ethereum (ETH) that the company possesses.

Because of the way this business model works, once the


initial few businesses have been established, it will be
challenging to replicate the model due to the fact that it will
be challenging to amass a significant enough balance of local
assets, and it will require a significant enough commitment to
begin and continue operations in order to generate
exponential profits. For instance, it would be illogical for any
company other than the central bank of the United States to
concentrate entirely on retaining huge quantities of USD
while also working to strengthen the economy of the United

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States.

Taxation on speculation
(exchanges)
The development of the financial infrastructure needed for
these assets, including exchanges, custodial services, and
derivative providers, was the focus of later business models.
Every one of them was founded with the sole purpose of
serving a single purpose: to serve as a resource for anyone
interested in speculating on these high-risk assets.
Multi-billion-dollar companies — such as Coinbase, Bitstamp,
and Bitmex — do not demonstrate any monopolistic
tendencies. Instead, they make the underlying networks they
support more accessible and add value to them. Holding a
dominant position is untenable because the underlying
network is open and doesn't require permission to access.
However, the liquidity and brands possessed by these
enterprises will, in time, form strong and defensible
corporations.

Payment tokens
A new wave of blockchain initiatives has emerged that
leverage payment tokens within networks as the foundation
for their own business models. Many of these platforms are
establishing two-sided marketplaces and requiring users to
make use of a native token when making payments.
According to these hypotheses, as the economy of the
network continues to expand, the demand for the restricted
native payment token will continue to grow, which will
ultimately result in an increase in the value of the token.

These token models with disputed value accrual have an


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obvious detrimental influence on the user experience: what
might previously have been paid in ETH or DAI now needs to
be accomplished in two separate transactions. As a result of
the friction-inducing features it possesses, this strategy has
been mostly forgotten about ever since the token fever of
2017 and has gone out of favor as a result.

Burn tokens
Communities, organizations, and initiatives that use tokens
might not always be able to directly transfer earnings to token
holders. However, the idea of token buybacks and token
burning has gained a lot of attention as a feature of the
Binance (BNB) and MakerDAO (MKR) tokens. Trading fees on
Binance and stability fees paid to MakerDAO provide
earnings, which are then used to buy and burn native tokens,
thereby reducing the total quantity and increasing the value
of the token. Arjun Balaji's (The Block) critique of the process
of burning tokens is certainly something that should be
looked at. In it, he asserts that there is no change in the
"revenue per token" since there is no distribution of
dividends.

Work Tokens
The work token is an emerging business model for
decentralized networks. This model focuses only on the
supply side of the network's revenue production in order to
minimize the amount of friction that users experience while
interacting with the network. The REP token that Augur uses
and the KEEP token that Keep Network uses are two famous
examples of this. In the same way that taxi medallions need
an investment, service providers need to put up a certain
number of their own local tokens before they can be allowed
to operate for the network.

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Work tokens are a powerful incentive system for services


provided to the network. Service providers will be rewarded
with both incentives and stakes, which can then be reduced
over time depending on how much work they do in providing
honest service that benefits everyone else within the
community. It's possible to evaluate them by anticipating
future cash flows.

The future cash flows that are forecasted to be attributed to


all network service providers should give a value and
corresponding price for these tokens. These assumptions can
also depend on how the networks will likely function in
practice, making them an important factor when it comes
down to deciding what exactly your digital currency is worth.

Other models
A number of other models that are noteworthy include:

● Dual token models in which one asset absorbs the


volatility of usage variations while the other asset is
held stable to enable efficient transactions and the
exchange of value;

● Governance tokens provide users the ability to


influence specific characteristics of the network, such
as fees and the order in which new features are
developed;

● Digitally, assets are represented as "tokenized


securities", which might include everything from shares
to bills to commodities to real estate;

● The Starkware team came up with the concept of Tech


4 Tokens. They want to make their technology

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available as an investment in return for tokens, which
will enable them to establish a treasury for each and
every one of the projects that they collaborate on.

Blockchain as a Service (BaaS)


In recent years, there has been a lot of buzz around
blockchain technology and its potential to revolutionize the
way we do business. One area where blockchain is starting to
make a real impact is in the realm of cloud computing.

Blockchain as a Service (BaaS) is a new model that enables


businesses to build and deploy blockchain-based
applications without having to manage the underlying
infrastructure. This gives organizations the ability to
experiment with blockchain without incurring the significant
up-front costs associated with setting up their own private
blockchain network.

In many cases, BaaS platforms also include features such as


smart contract capabilities and user management tools. BaaS
providers typically offer a suite of tools and services that
make it easy to develop and deploy blockchain applications.
As the BaaS market matures, we are likely to see more
providers emerge, offering innovative new ways to help
businesses harness the power of blockchain.

How Does the Blockchain-as-a-Service Business Model


Work?

As the name suggests, this kind of business model illustrates


how third parties may develop, operate, and maintain a
blockchain on behalf of a company. This means infrastructure
and technology related to blockchains are subject to a fee if
they are provided by a service provider that charges for this

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service.

When it comes to a business, blockchain-based services are


comparable to web hosting providers in a number of ways.
The use of cloud computing allows for the creation of
blockchain applications and smart contracts, both of which
may be hosted inside the ecosystem of the provider.

Integration of BaaS into traditional organizations is beneficial


for resource allocation, bandwidth management, data
security, and hosting requirements. By using Blockchain
technology services, companies are free to concentrate only
on their primary operations rather than the complexities of
implementing Blockchain technology.

Example of Blockchain-as-a-Service (BaaS)

The graphic above illustrates Hyperledger Cello, which is a


BaaS-like blockchain module toolkit and utility system that is
part of the Hyperledger project.

Hyperledger is an open-source project that is supported by


the Linux Foundation. It is a collaborative effort to advance
blockchain technology across industries. The project was
launched in December 2015, and its goal is to provide a
standard framework for developing blockchain applications.

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Hyperledger is unique in that it is not a single blockchain, but
rather a collection of tools and technologies that can be used
to build blockchain applications. This makes it well-suited for
businesses and organizations that want to develop their own
blockchain solutions. Some of the most notable members of
the Hyperledger community include IBM, Intel, and J.P.
Morgan.

How Blockchain-as-a-service is Shaping Businesses


Blockchain technology is often associated with
cryptocurrency, but the potential applications of blockchain
extend far beyond Bitcoin and other digital currencies. In fact,
blockchain-as-a-service (BaaS) is becoming increasingly
popular among businesses of all sizes. BaaS platforms allow
businesses to develop and deploy their own blockchain
applications without having to invest in the underlying
infrastructure. As a result, BaaS is helping to make blockchain
technology more accessible and easier to use for a wide
range of organizations.

One of the key benefits of BaaS is that it can help businesses


to streamline their operations. For example, a supply chain
management company can use BaaS to develop a blockchain
application that tracks the movement of goods through the
supply chain. This can help to improve transparency and
accuracy while reducing costs and delays. In addition, BaaS
can also be used to create applications for identity
management, data security, and other areas.

According to a recent report, blockchain-as-a-service is


expected to grow at a compound annual growth rate of 62.2
percent between 2020 and 2026. This would put the market
size at $11.5 billion by 2026. The report attributes this growth
to the increasing demand for cloud-based services, the need
for transparency and immutability in certain industries, and
the growing number of use cases for blockchain technology.

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As the report notes, blockchain-as-a-service provides an easy
way for businesses to experiment with blockchain without
having to invest in the infrastructure themselves. With the
rapid growth of the blockchain-as-a-service market, it is likely
that we will see even more innovation in this space in the
years to come.

BaaS for startups


Blockchain-as-a-Service (BaaS) is a cloud-based platform that
allows startups to build, test, and deploy blockchain
applications without the need for expensive hardware or
software. BaaS provides all the tools and resources
necessary to create a working blockchain application,
including a user-friendly interface, templates for popular
blockchain use cases, and access to a network of experts. As
a result, BaaS is an ideal solution for startups that want to
explore the potential of blockchain technology without
incurring significant costs or risks. While BaaS is still in its
early stages of development, it has already attracted the
interest of several major tech companies, indicating the
potential for this new platform.

Industry-wise use cases of Blockchain-as-a-service


Blockchain technology is often seen as something that is only
used by financial institutions. However, the blockchain can
actually be used across a wide range of industries. One area
where blockchain is being used increasingly is in the area of
supply chain management. By tracking items on the
blockchain, businesses can ensure that they are getting the
products they ordered and that they are not counterfeit.
Because of the various benefits it has,
blockchain-as-a-service has been and is currently being
implemented in these industries:

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Healthcare
Blockchain has revolutionized healthcare in a number of
ways. First and foremost, it has created a new model for
storing and sharing medical data. Traditional medical records
are often scattered across different institutions, making it
difficult to get a complete picture of a patient's health.
Blockchain provides a decentralized way to store medical
data, making it more accessible and secure.

Secondly, blockchain has enabled the development of new


applications that can help improve the quality of care. For
example, there are now platforms that allow patients to
directly connect with doctors and specialists. These platforms
use blockchain to verify the identities of patients and doctors,
ensuring that only legitimate healthcare providers can
participate. In addition, blockchain-based applications can
also help to track the provenance of medicines, making it
easier to identify and recall counterfeit drugs.

Finally, blockchain is also being used to develop new


financial models for healthcare. For instance, there are now
platforms that allow patients to pay for their care with
cryptocurrency. This allows patients to avoid the high cost of
traditional health insurance while still getting access to quality
care. As these examples show, blockchain is having a
profound impact on healthcare. It is creating new ways to
store and share data and new ways to improve the quality of
care.

Automotive
Here are just a few ways that this technology is making
waves in the automotive sector:

1. Blockchain-based apps are making it easier to buy and


sell cars;

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2. Blockchain is being used to track the provenance of
car parts;

3. Blockchain is helping to streamline the process of


vehicle registration;

4. Blockchain-based smart contracts are being used to


facilitate the sale of cars;

5. Blockchain is being used to develop new types of car


insurance products.

These are just a few examples of how blockchain is starting


to transform the automotive industry. With so many potential
applications, it's clear that blockchain is here to stay in the
world of cars.

FinTech
In recent years, blockchain technology has revolutionized the
financial sector. By providing a secure, decentralized platform
for transactions, blockchain has made it possible for fintech
companies to offer a wide range of innovative services. For
example, blockchain-based payments can be processed
quickly and securely, without the need for a central authority.

Blockchain has also enabled the development of new


business models and applications, such as peer-to-peer
lending and digital currencies. The adoption of blockchain by
the financial sector is still in its early stages, but it is clear that
this technology has the potential to disrupt the status quo.

In addition, blockchain-based lending platforms can provide


loans to borrowers with less risk of default. As a result,
blockchain has the potential to transform the financial sector,
making it more efficient and accessible.

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Transportation and logistics


Blockchain technology has revolutionized the transportation
and logistics industries by providing a way to track and verify
the movement of cargo and people. The use of blockchain
allows for a more efficient and fault-proof verification process,
which can help to improve the efficiency of cargo movement
and reduce the cost of verifying goods and people.

In addition, blockchain can help to improve the security of


transportation and logistics operations by providing a secure
and tamper-proof record of transactions. As a result,
blockchain has the potential to revolutionize the way
transportation and logistics operations are conducted.

Document tracking
The advent of blockchain technology has revolutionized the
way organizations track documents. By creating a
tamper-proof and transparent record of document changes,
blockchain has made it easier than ever to ensure that data is
accurate and up-to-date. In the past, tracking document
changes involved a complex and often unreliable chain of
custody.

But with blockchain, it is now possible to keep a secure and


immutable record of all changes, from the time a document is
created until it is finally destroyed. This not only helps to
prevent corruption and fraud, but also makes it easier to audit
document changes and retrieve previous versions of files. As
a result, blockchain has emerged as a powerful tool for
ensuring the security and integrity of documents.

Data storage
In the past, data was stored centrally on servers that were
owned and operated by companies, such as Google and

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Facebook. However, this model had a number of drawbacks.

First, it was expensive to maintain servers and hire staff to


manage them. Second, it was vulnerable to hacking and
other security threats. Third, it gave these companies too
much control over our data. Blockchain has changed all that.
By distributing the data across a network of computers,
blockchain provides a more secure and decentralized way to
store data. This not only reduces the costs for companies, but
also gives users more control over their data.

In addition, blockchain makes it possible to verify the


authenticity of data, which is essential for many applications
such as banking, healthcare, real estate, and voting. As a
result, blockchain is changing the way we store data and
ushering in a new era of decentralized data storage.

Contract execution
In the past, contracts were written on paper and then signed
by both parties. This was a lengthy and cumbersome process
that often resulted in mistakes. With the advent of blockchain
technology, however, contracts can now be executed via
smart contracts. These are essentially self-executing
contracts that are stored on the blockchain. This means that
they cannot be altered or tampered with, and they are
automatically enforced. This has revolutionized the way
contracts are executed, as it is now much faster and more
efficient. In addition, smart contracts can also be used to
enforce other agreements, such as financial transactions.

Low-Code and no-code web3


In the early days of the internet, building a website required
learning HTML and CSS. These days, there are a variety of
platforms that allow users to create websites with little to no

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coding knowledge. These platforms are often referred to as
low-code or no-code platforms. There are a number of
advantages to using these kinds of platforms.

First, they lower the barrier to entry for creating websites.


This means that anyone, regardless of their coding ability, can
create a website. Second, they save time and energy.
Building a website from scratch can be a time-consuming
process. However, with a low-code or no-code platform, you
can create a website in a fraction of the time. Finally, they
provide a wide range of features and customization options.

Low-code and no-code Web3 platforms offer a way to build


decentralized applications without the need to write any
code. This is enabled by pre-built components that can be
assembled into comprehensive apps without any coding
required. For example, one popular low-code platform is
Ethereum's Truffle Suite. It includes many tools for developers
to create, test, and deploy their dApps efficiently.

In addition, low-code platforms often come with user-friendly


interfaces that make it easy for non-technical users to build
decentralized applications. This is perfect for those who want
to get started with blockchain technology but don't have the
coding skills necessary to build an app from scratch. With a
low-code or no-code platform, anyone can create a
decentralized application with ease.

Event Ticketing Marketplace


Many people might not know this, but there's a whole
industry built around event ticketing. Plus, it's a pretty big
business too — in the U.S. alone, the concert and live
entertainment industry are worth over $40 billion. The
ticketing marketplace is just a small piece of that pie, but it's
still a fairly sizable market. There are a few different ways that

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companies in the space make money. These companies, in
essence, act as middlemen between event organizers and
fans. They build technology that makes it easy for organizers
to sell tickets and promote their events, and then they take a
cut of each ticket sale. In some cases, they also charge
Eventbrite-style fees for using their platform. It's a simple
business model, but it can be quite profitable - especially if
you have a large enough scale.

Example of Event Ticketing Business Model


Eventbrite is a popular event planning and ticketing website.
Founded in 2006, Eventbrite has helped people plan and
attend millions of events around the world. Eventbrite is easy
to use and offers a wide range of features, making it a great
choice for both small and large events. You can use
Eventbrite to create an event listing, sell tickets, and promote
your event. Eventbrite also offers a variety of tools to help
you manage your events, such as guest list management,
check-in, and event analytics.

The core of Eventbrite's business model is the collection of a


transaction fee from each customer for every ticket they sell,
payable by either buyers or organizers. The company also
generates cash by renting out actual equipment — such as

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scanners, for example — to people who are hosting events.

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WEB3 BUSINESS MODELS


EXAMPLES

Bitcoin
David Chaum is widely credited as the inventor of digital
cash. In 1983, he proposed the concept of "blind signatures",
which would allow for secure financial transactions without
the need for a third party. In 1989 and 1991, David Chaum
launched DigiCash, an electronic payment system that used
blind signatures to ensure security. However, DigiCash failed
to gain widespread adoption and later went bankrupt in 1998.

However, it was not until 1998 that digital cash began to gain
traction. In 1998, Nick Szabo proposed "bit gold", a system
that would use cryptography to create a decentralized
currency. Unfortunately, bit gold never caught on. Finally, in
2008, an anonymous person or group of people under the
pseudonym Satoshi Nakamoto released the Bitcoin white
paper, which proposed a decentralized digital currency based
on blockchain technology. 2014 saw the emergence of
Blockchain 2.0, which extended its use case beyond money.
Bitcoin would go on to become the first and most successful
cryptocurrency in history.

More About Bitcoin


Bitcoin is a digital asset and a payment system invented by

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Satoshi Nakamoto. Transactions are verified by network
nodes through cryptography and recorded in a public
dispersed ledger called a blockchain. Bitcoin is unique in that
there is a finite number of them: 21 million.

Distributed ledger technology (DLT) is used to create and


manage the Bitcoin blockchain ledger. Bitcoin is one of
several so-called "cryptocurrencies", although it is by far the
best known. Cryptocurrencies are digital or virtual tokens that
use cryptography to secure their transactions and control the
creation of new units. Cryptocurrencies are decentralized,
meaning they are not subject to government or financial
institution control.

The first decentralized cryptocurrency, bitcoin, was created in


2008. Since then, numerous other cryptocurrencies have
been created. These are often called "altcoins", short for
"alternative coins". Today, there are thousands of different
cryptocurrencies in existence, with new ones being created
all the time.

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Ethereum
Ethereum is a decentralized platform that runs smart
contracts: applications that run exactly as programmed
without any possibility of fraud or third-party interference.
Ethereum is how the Internet was supposed to work. It was
launched by Vitalik Buterin in 2015. The goal of Ethereum is
to create a decentralized suite of financial products that
anyone in the world can access, regardless of nationality,
ethnicity, or religion. These products would be available on a
peer-to-peer network, with no need for intermediaries like
banks or governments. In other words, Ethereum aims to be a
one-stop shop for all your online financial needs.

The native currency of the Ethereum network is ether (ETH).


ETH is used to pay for transaction fees and computational
services on the Ethereum network. One of the unique
features of Ethereum is that it allows users to create their
cryptocurrencies, called tokens. Tokens can be used to
represent assets such as shares in a company, or they can be
used to represent loyalty points or voting rights. There are
currently over 1,000 tokens built on top of the Ethereum
network, with more being created every day.

Decentralized applications have been gaining popularity


since the creation of Bitcoin and the rise of blockchain
technology. They offer a number of advantages over
traditional apps, including increased security, transparency,
and censorship resistance. Ethereum's dApp platform is the
most widely used, and it has the largest selection of dApps. It
also has the best tooling and developer support.

Ethereum is used to build a decentralized application (dApp)


ecosystem. DApps are open source and deployed on the
Ethereum blockchain. They are composed of smart contracts

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— computer programs that run on the Ethereum Virtual
Machine, or EVM. The EVM can execute scripts using an
international network of public nodes. The most popular
dApp platforms are Ethereum, EOS, and TRON.

Solana is a blockchain
The Solana blockchain was created in 2017 by a team of
developers with experience working on major projects like
the Filecoin protocol and Amazon Kinesis. The goal of the
project was to create a high-performance blockchain that
could handle thousands of transactions per second. To
achieve this, the Solana team implemented a number of
innovative features, including proof-of-history and Sealed
Ledger. In addition, they designed the Solana platform to be
fully compatible with Ethereum smart contracts. As a result,
Solana has emerged as one of the most promising young
blockchains in the space. And with a growing ecosystem of
applications and services, it is only getting more popular.

Basic Attention Token


Basic Attention Token is a cryptocurrency that is used to
obtain advertising and attention-based services on the Brave
platform. The token can be used to tip content creators, or it
can be used to purchase advertising on the platform. Brave is
a web browser that blocks advertisements and trackers and
instead rewards users with Basic Attention Tokens for their
attention.

The overall goal of the project is to improve the efficiency of


digital advertising while also protecting user privacy. Basic

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Attention Token is just one example of a growing trend of
so-called "attention-based" cryptocurrencies, which seek to
reward users for their attention in some way. While Basic
Attention Token is still in its early stages, it has the potential
to upend the current digital advertising landscape.

ERC20 Utility Token


The Graph Token (GRT) is an ERC20 Utility Token and a
decentralized protocol that allows developers to access data
from the Ethereum blockchain. The project was launched in
October 2018 by a team of experienced researchers and
engineers. The Graph Token is based on an indexing protocol
and is being used by the popular Uniswap decentralized
exchange. The protocol allows developers to query data from
the Ethereum blockchain in a more efficient manner than
traditional methods.

The Graph Token protocol is designed to be scalable and


efficient, and it currently supports queries from over 1,000
dApps. In addition to providing data for developers, The
Graph Token also allows users to stake their tokens to help
curate data for the network. Indexers and/or stakers are
rewarded with fees from developers who use the network to
access data. Curators and delegators, who also serve as
network ministers, help maintain a high-quality index. The
Graph Token is an important part of the Ethereum ecosystem,
and it is one of the most promising projects in the space.

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HOW DO WEB 3.0


BUSINESS MODELS MAKE
MONEY?

The Web3 business model has produced a number of new


revenue streams, including:

Making money off your own data.


Everyone should now be aware that, due to the way Web 2.0
works, internet companies like Facebook and Google make a
significant amount of money by collecting and selling the data
we voluntarily contribute whenever we interact with their
services. In exchange for the disclosure of our personal
information, what do we stand to gain? Nothing, except the
fact that they are willing to provide us with their services;
other than that, they don't really offer anything else.

Due to the prevalence of Web 2.0, it is quite unlikely that this


structure will be altered in the very near future. On the other
hand, Web 3.0 makes it possible for other people to make
money off of the data that we generate every time we log in.
The technology behind blockchain makes all of this feasible.

The people who own the platforms on which the blockchain


operates are in charge of their own data, and this indicates
that the people who create it are in control of their own data.
This means that tech companies don’t own the data that is
stored on the blockchain. By using the protocols of Web 3.0,
we are now in a better position than ever before to collect,
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safeguard, and take advantage of our own data.

Minting your own currency.


The Federal Reserve no longer has monopoly status with
regard to the minting of currency. It is possible to generate
your own personal tokens or cryptocurrencies by making use
of the technologies that come with Web 3.0 and using
platforms such as Privi. You may reward your social media
followers or members of other networking systems with
tokens by assigning a monetary value to each token.

The greater the number of transactions that take place, the


higher the value of the tokens, which in turn drives up the
demand for personal tokens. The greatest aspect is that the
developer will always have authority over the entire number
of these tokens, which may be seen as equivalent to a
company's cash or shares. People who have tokens are
encouraged to share items that they have purchased with
their tokens in order to boost demand as well as the value of
the tokens that they own.

Democratize ownership of physical properties.


Whatever version of the internet is judged to be the most
current, from web 3.0 to web 27, real estate, apartments, and
condos in major cities across the world, as well as vacation
properties in exotic areas throughout the world, will always
have the greatest value.

Instead of putting their property up for sale on the local real


estate market, owners of real estate can now effectively
convert their property into a digital asset that is supported by
an NFT as a result of the development of Web 3.0. This can
be done in place of selling the property on the local real
estate market. With nothing more than some crypto coins, it is
possible to purchase these assets in very minor chunks,
maybe totaling as little as a few percent of their overall worth.
After that, the responsibility for administering the property

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would be passed on to a decentralized insurance pool.

People like you and me who are interested in acquiring a


piece of the growing real estate markets in wealthy locations
can take advantage of this opportunity. Real estate owners
who want to expand and widen the market for their
properties outside of the conventional real estate business
are also eligible to benefit from this opportunity.

Revolutionize the credit industry.


The idea that monopolies are undesirable and that healthy
competition is advantageous is one of the most basic tenets
of economics. Large banks have such a stranglehold on the
credit industry that, as a result, they decide the qualifications
for who is granted credit and who is not. As a result, many
average people are denied the opportunity to invest and
generate money for seemingly random reasons.

The decentralized credit pools of Web 3.0 have the potential


to end the monopoly that the big banks now have on the
provision of credit. This would include groups of crypto
lenders coming to an agreement on how much they are
willing to lend and how much interest they would want to
receive in return. Decentralizing the provision of credit has
the potential to generate profits for the lender and give
access to necessary loans to those who, under traditional
circumstances, would be denied such access. They might use
this to start their own businesses and make money from the
goods and services they provide, or they could just use it to
build up their fortunes. Either way, they would benefit from its
use.

Start or Work for a Decentralized Autonomous Organization


(DAO).
Because of web3, a decentralized autonomous organization,
also known as a DAO, has the potential to become the
employer of the future. Alternatively, it might become a

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means by which people donate money to causes and
philanthropic activities.

One potential source of income for a decentralized


autonomous organization (DAO) is a financial transaction
supported by smart contracts. The majority of the time, these
organizations collect funds by giving tokens, which are
essentially their own kind of cryptocurrency, to the people
who join their community.

Every transaction that takes place with or between a DAO


and any other entity is recorded, displayed, and verified using
blockchain technology. As a result of this, decentralized
autonomous organizations (DAOs) are able to do business or
campaign for particular causes with individuals who share
their values no matter where they are located on the planet
and without the interference of any bureaucracy, superiors, or
third parties. Because of the capabilities of blockchain
technology and Web 3.0, there are no secrets to be found in
a DAO.

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WEB3 NETWORK EFFECTS

Throughout the course of the previous decade, the ascent


and dominance of Web2 platforms were both propelled by
network effects, which piqued the attention of both software
developers and financial backers. This interest led to
increased activity in the respective markets. While some think
that Web3 will entirely abolish network effects, other people
feel that Web3 will have even more substantial network
effects than Web2 did.

The discussion about Web3 that is taking place now is filled


with hype and hyperbole, but the answer lies in modifying our
mental models of network effects. For instance, it's possible
that we won't be able to quickly apply what we've learned in
Web2 to a situation in Web3 right away. Due to the fact that
Web3 is an entirely new world, it is imperative to study
network effects and get an understanding of how they adapt
as we transition from Web2 to Web3.

Network effects in Web2 vs


Web3
To have a clear understanding of network effects in Web3
ecosystems, one must first have a firm grasp of the
distinctions that exist between Web2 and Web3 ecosystems,
as well as an awareness of the ways in which these
distinctions influence the creation of network effects.

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1. In Web2 ecosystems, the platform provider is the
entity responsible for building and maintaining the
market infrastructure. In a Web3 ecosystem, a platform
provider is not required to provide market
infrastructure in order to provide market infrastructure;
rather, the ecosystem itself offers market infrastructure
via resource commitments and infrastructure building.
When it comes to producing and expanding network
effects, Web3 ecosystems have challenges that are
unique to themselves, since not only do they need to
coordinate market activity, but they also need to
create market infrastructure;

2. The use of tokens enables the acceleration and


expansion of network effects. Tokens are the primary
means by which market activity is managed. As the
market gets more active, it is possible that producers
may be rewarded with tokens whose value rises in
order to thank them for bringing supply to the platform
at an earlier stage. To a similar extent, the developers
who are in charge of putting up the market
infrastructure might be paid with tokens for the
provision of important infrastructure components.
Tokens, in contrast to Web2 ecosystems, provide a
fresh method of incentivizing participants;

3. Because of Web3's interoperability, data and


reputation may move around more freely, which makes
network effects less tenable. Web3 ecosystems are
unable to rapidly build up network effects due to the
fact that they are unable to "lock in" their users or
extract a lot of value from user data in the same
efficient and now notorious manner that their Web2
predecessors achieved.

Last but not least, market actors make up the vast bulk of
Web2 ecosystems. Participants in Web3 ecosystems need to

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be taken into consideration not just at the market level, but
also at the infrastructure level, the financial layer, and the
governance level. For example, Etsy is a marketplace that
allows third-party merchants to join. However, the
infrastructure of the marketplace is built in-house, and the
marketplace itself is responsible for financial and
administrative tasks. On the other hand, a Web3 commerce
protocol has to:

1. Create market infrastructure centered on the protocol


and manage its establishment at the infrastructure
layer;

2. Maintain the liquidity of tokens in such a way that the


funding layer may be used to foster the growth of
financing opportunities and the value of tokens. This,
in turn, will provide all participants with an incentive;

3. Broaden the scope of governance so that it includes


not just the founding team, but also additional players
in the ecosystem.

Mental Models
Nature Of Value
The most important source of value for Web2 networks is the
combination of the value of the product and the value of the
network. The value of tokens is an additional value that is
available in Web3.

STANDALONE VALUE:
Because it is derived only from the product, the value that a
platform has is referred to as its standalone or product value.
This value exists even if no one utilizes the platform. To put it
another way, this is the value that a user obtains from a
platform, and it is independent of how other users are using

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the same platform. Those users that sign up for the platform
early will also be in a position to take advantage of the
platform's value. The value of the platform will not change
even if more individuals sign up for it. The stand-alone value
may often be traced back to the platform's underlying
technology.

NETWORK VALUE:
Network value refers to the value created on a platform by
the actions of other users. This is the value added to the
platform by other users' activities and use. Network value is
lost when there are no users on a platform in its infancy. The
network value does not accrue to the initial user who joins
the platform. Nevertheless, the platform's network value
improves as more people make use of it.

When it comes to Web2 platforms, the only individuals you'll


meet are those that make use of such platforms themselves.
The value that Web3 platforms provide to networks is raised
even more as a result of the fact that the community of users
is the key engine of value creation in Web3 ecosystems.

TOKEN VALUE:
The accumulation of value by a native token that is
connected to a protocol is referred to as token value on
Web3 systems. Protocols, which are fundamental
components of Blockchain technology, make it possible for
information to be exchanged between cryptocurrency
networks in a manner that is both secure and dependable.

The value of the connected token that belongs to a protocol


goes up in direct proportion to how popular the protocol is.
Early adopters, who will be rewarded with tokens if they join
the network, will be able to profit from the platform's token
value growing over time. Therefore, the value of tokens
represents a new way of jump-starting and scaling up
network effects on the blockchain.

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Managing Market Activity Vs. Market Infrastructure
The concept of a network in Web3 networks is also unique in
comparison to that of other kinds of networks. Producers and
consumers are the major actors in the process of value
production and exchange in Web2 networks. Developers may
be able to add functionality to Web2 platforms, but it is
ultimately the responsibility of the platform owner to provide
the necessary market infrastructure. For instance, participants
in web2 marketplaces participate in transactions, but web3
marketplace actors include those who provide the necessary
market infrastructure to allow these transactions.

Participants in Web3 are the ones who are tasked with


developing the underlying market infrastructure. Instead of
putting resources in a centralized location, participants in an
ecosystem may choose to contribute their resources, such as
computer power, storage space, and so on. The market
infrastructure is built around the protocol by the developers,
which allows both consumers and producers to interact in the
market.

In Web 2, platforms facilitated the integration of market


infrastructure and market regulation. The infrastructure of the
market, as well as the regulation of the market, are both
supplied by marketplaces — such as Amazon, eBay, Upwork,
Uber, and many more like it —, which integrate all of these
aspects into a single platform.

Web3 divides market infrastructure from market governance


into two distinct categories. The protocol layer is responsible
for encoding the fundamental aspects of market regulation.
The ecosystem that surrounds the protocol may be
responsible for building components of market infrastructure.

On Web2 platforms, it is the responsibility of platform


administrators to regulate network effects while also
addressing supply and demand overlap. If all of Airbnb's early

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listings were situated in Delaware, for instance, but potential
guests were seeking accommodation in Los Angeles, then
there would be no sales at all. To successfully manage the
Web2 network effects, it is important to coordinate and
overlap the processes of creating market infrastructure and
providing support for market activities.

On the other hand, in order to get developers to participate in


the project, web3 platforms would have to provide an
incentive in the form of a reward to stimulate innovation that
meets the demands presented by their users.

It is essential to exercise control over both the level of activity


within the market and the scalability of the infrastructure
within the market if one is to effectively manage the network
effects that Web3 has. When Web3 ecosystems reach this
state of equilibrium, a positive feedback loop is established,
which permits the continued development of the ecosystems.

Countering, Switching, And Building For Defensibility


One of the most important differences between Web2 and
Web3 is that Web3 has a lower degree of defendability
against the impacts of network effects.

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Web2's defensibility relies on four distinct forms of
accumulated or stored value: 1) the data collected by the
platform, 2) the content that was committed to the platform, 3)
the reputation that was acquired on the platform, and 4) the
influence that was generated on the platform.

In Web2, each of the four kinds of cumulative value was


limited to a certain platform. In Web3, on the other hand, all
four types of cumulative value are easily transferable across
platforms. New marketplaces are easily able to attract
individuals by simply consolidating the various NFTs that are
already available to the public. Users are able to move both
their data and all their activity to other platforms in an easy
and seamless manner.

Despite the fact that web3 holds the promise of a surge of


innovation, the individual platforms' ability to benefit from it
and keep their share of it decreases.

Any technique for developing network effects has to take into


consideration both the low switching costs and the absence
of cumulative value in web3.

Managing Extraction
Network effects and high switching costs made it possible for
Web2 platforms to engage in excessive data extraction and
control over their customers, both of which resulted in
financial benefits for the Web2 platforms.

It is essential to come up with a system that allows for simple


switching and extraction if Web 3.0 is going to have any hope
of successfully managing the impacts of network effects. In
contrast to the ecosystem of Web2, Web3 provides
infrastructure for marketplaces as well as resources for the
people who participate in such markets. Actors in the Web3
ecosystem need the ability to secure their returns on
investment against commoditization and changes in policy so

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that they may continue to preserve their capacity to
contribute resources and innovative capabilities.

When it comes to regulating network effects in Web3


ecosystems, managing extraction is very necessary. In an
environment based on open-source software, excessive
extraction will result in forking, which will lead to ecosystem
actors giving up on the original protocol. In addition,
improved coordination characteristics in Web3 make it
possible for ecosystem actors to abandon a protocol and
instead organize themselves around a forked version of it.

Crypto & NFTs: Network


Effects in Web3
Ethereum: Layer 1 Protocol

It is common to refer to Ethereum as a Layer 1 protocol. This


terminology describes Ethereum as the "computer" of the
blockchain, on which other projects may be developed. The
picture above illustrates the three different kinds of Ethereum
network effects.

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Ethereum Blockchain and Ether Token (Interaction Network)

The Ethereum blockchain is a distributed ledger that is stored


on a network of interconnected computers, known as nodes.
This network of nodes is responsible for confirming that
transactions are legitimate and producing new Ether tokens
as a reward for their hard work. It is important to add new
nodes to the protocol in order to support extra token
transactions and developer activity. At first glance, this seems
to be a straightforward and unidirectional network effect.
Adding more nodes to the protocol, however, does not
significantly increase the value of the protocol for the existing
nodes. Because there is now more competition for verifying
transactions and minting new tokens, the value of other
nodes has actually decreased as a consequence of this
development.

Adding more nodes to the network has a number of


advantages, the most important of which is an expansion of
its capacity and, therefore, an increase in its value to buyers
of Ether tokens. As more individuals get their hands on Ether
tokens, the value of those tokens rises, making it more

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appealing for nodes to participate in the transaction
verification process. Consequently, in a network of
interactions with two sides, these are the effects on both
sides of the network that are induced by switching sides —
token buyers can also become validators and vice versa.

One potential problem is that there is a distinct negative


network effect, and another potential drawback is that there
is a possibility of commoditization.

1. Because there is an excessive amount of traffic on the


network, several blockchains, including Ethereum, run
the risk of experiencing high transaction fees and
lengthy processing times as a result of network
congestion. After a certain point, the value of the
network is decreased for all other buyers of tokens
whenever there is a new buyer of tokens. Products
developed using Web 2.0 don't have this type of
negative effect on the network. When it comes to
crypto and physical networks, like telephones or the
internet, excessive traffic may have a detrimental
impact on service quality or speed, making it a unique
problem;

2. The possibility of becoming a commodity is the second


issue at hand. One reason for this is that the identity of
each node in the blockchain network is irrelevant to
the identification of the other nodes in the network, as
well as to buyers of tokens in the network. As a
consequence of this, the additional value contributed
by each new node in the network decreases as the
size of the network increases.

Consider this in light of the network effects that were


present in the first telephone network. In contrast to
the protocols of blockchains, the telephone network
was identity-focused. This meant that you were unable

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to reach a specific person if they did not have a phone,
regardless of whether others had one or not. Because
of this, the utility of the telephone network increased
along with the number of individuals who could be
contacted via the network's various phone lines. There
are network effects that, as the scale of the
blockchain's interaction network rises, become
progressively less significant. Due to the fact that in
order to compete, blockchain protocols and coins
merely need to be "large enough" in relation to their
transaction volume or activity, there is now a sea of
competing blockchains and cryptocurrencies.

Ethereum Smart Contracts (Platform)

The Ethereum protocol is focused entirely on the concept of


decentralized apps and smart contracts (dApps or "Layer 2").
End users will be required to acquire Ether tokens in order to
make use of these decentralized applications (dApps). As a
result, the value of the Ether token to consumers increases
whenever a decentralized application developer joins the

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Ethereum network. With a few significant exceptions, this has
many of the characteristics of a platform:

● This platform does not have any "matching" — or app


store — functions, which is a big detriment to its
functionality. Because Web3 places emphasis on open
designs, this outcome is unavoidable. On the other
hand, as a consequence of this, customers will have a
more difficult time identifying the perfect dApp, which
may result in a diminished overall network effect.
Naturally, this shortcoming may be remedied in the
long run by the availability of third-party app stores;

● It is also important to point out that, other than the


ether token itself, there is no real commodity being
sold here. In addition to interacting with the platform
itself, users engage with the underlying product. This
primary product accounts for the vast majority of the
value offered by the platform.

For instance, the iOS App Store has been the source
of the iPhone's largest contribution to the iPhone
economy. Customers who use iPhones now have
access to a product that has a higher value as a direct
result of the developer's participation in the app store
(platform). The addition of new developers to
Ethereum, on the other hand, does nothing except
contribute to increasing the value of the Ether token
for buyers. Because there are no switching fees and
the currency is very liquid, users may always sell Ether
and buy another token to access decentralized
applications (dApps) built on another blockchain. This
has a direct influence on the defensibility of the
cryptocurrency.

For instance, if with just a few taps on your screen you


could transform your iPhone into a Windows phone or

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an Android phone, both of which would provide you
access to their respective online development
communities, even if it led to more rapid innovation
from iOS developers, it would not be enough to
preserve the relevance of the iPhone's platform
network effects.

Cardano and Solana are just two of the many innovative


Layer 1 blockchain protocols that have come into existence as
a direct result of these two factors.

Composability (Interaction Network)

This is not to imply that Layer 1 protocols cannot be defended


against in any way. They do benefit from reduced costs
associated with developer switching. Composability, or the
ability for developers to build new smart contracts by
remixing components from existing ones, is a significant
aspect in this regard.

For example, TikTok has become synonymous with the


practice of reworking previously published videos in order to
create new content. When there are already more smart

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contracts built for a protocol, it becomes much easier for
developers to build new ones. Consider this to be an extra
network effect — an interaction network — that has been
established on top of the platform. It is expected that
cross-chain bridges, which make it possible for smart
contracts to be created using different protocols, will reduce
the impact that this technology has on defensibility.

We have arrived at truly decentralized applications (dApps),


which are built on top of Ethereum and other Layer 1
protocols. NFTs, also known as unique digital assets, are a
characteristic that can be found in the majority of these apps
— e.g., a collectible card. Just a few examples of intriguing
subcultures that have emerged in recent years include
CryptoPunks and the Bored Ape Yacht Club. It might be
challenging to recognize these network effects due to the
lack of clarity around their significance and their practical use.
Experimentation and evangelism will always come before
utility in the technological cycle's early phases, so this is not
an unusual occurrence at those stages. Play-to-earn games,
also known as games in which players have the opportunity
to earn tokens via gameplay, are an example of a
decentralized application (dApp) that demonstrates clear
evidence of network effects. We will discuss one such
prominent play-to-earn game.

Axie Infinity: Play-to-Earn NFT Game

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As of May 2022, Axie Infinity had over 2.1 million monthly


players, making it the most popular player-to-earn (P2E)
game. The image above shows how Axie Infinity brings
together four different network effects:

P2E Game (Interaction Network)

Players are entrusted with breeding new Axies, engaging in


battle against other players, and trading their existing Axies.
This aspect of the game has some similarities to Pokémon.
Each Axie has its own unique set of features and varieties,

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which may play a role in determining how successful it is
against other Axie. Tokens of Smooth Love Potion (SLP) are
awarded to players if they emerge victorious from battles and
other tasks found inside the game. By trading or selling these
tokens to other gamers, the user has the potential to earn
real money from their tokens.

You'll have more opportunities to meet other players, engage


in battle with them, and do business with them as the
popularity of the game increases. The game is a multiplayer
experience comparable to Minecraft, Apex Legends, Fortnite,
or Call of Duty. There is a correlation between the rate of
adoption and the potential for financial gain. In spite of this, it
is completely unconcerned with the identity of the individuals
participating. As a result of this, increasing the number of
players at a certain point does not in any way contribute to an
increase in the game's utility or its potential profitability. This
has a direct impact that is adverse to the defensibility of this
network effect.

According to statistics, growth in the number of players has


led to congestion in the network as well as a reduction in
potential earnings. Because of this, competing P2E games
have a significant potential to compete and steal players
away from existing games. As a direct consequence of this,
Splinterlands and other endeavors that are comparable to it
have begun to gain ground.

Axie Marketplace (Marketplace)

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The Axie Marketplace constitutes the second layer of the


network effects brought about by Axie Infinity. Axies and
other valuables from the game may be purchased and sold
here. There isn't a huge amount of difference between this
and Web 2.0 markets that provide side-switching. The game's
marketplace network effect helps to reinforce the interaction
network effects already present in the game. The greater the
number of Axies that are bred, the greater the variety of
things that may be obtained in the game, which in turn makes
the game more profitable and exciting.

Remember that Axies are non-fungible tokens. This indicates


that players are at liberty to sell their Axie on another NFT
marketplace, such as OpenSea. However, each Axie has its
own unique set of features, which results in an extremely
diverse supply of Axies. When it comes to collecting the "long
tail" of unique Axies and in-game artifacts, the Axie
Marketplace is considerably easier to use than a third-party
marketplace such as OpenSea. This is because the Axie
Marketplace was designed specifically for this purpose.

It is expected that the Axie Marketplace will continue to be


the venue of choice for making purchases of in-game items
because of the diverse nature of its supply, which makes the

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Axie Marketplace an effective barrier against potential
threats. However, this can only be defendable if the game is
able to sustain player interest. It does not, therefore, prohibit
players from transferring to another play-to-earn game.

DAO (Interaction Network)

The team behind Sky Mavis is responsible for the


development of Axie Infinity. And they have plans to
accomplish their objective of turning over control of Axie
Infinity to a decentralized and autonomous organization by
using a separate kind of currency known as Axie Infinity
Shards (AXS). As part of a decentralized autonomous
organization, or DAO, owners of Axie Infinity tokens will have
the ability to monitor and vote on the project's ultimate
trajectory in the future.

A person's identity as a member of another form of network


effect might affect their defensibility. The significance of user
identification changes proportionally with the scale of the
network. Identity is essential in the early stages of a
decentralized autonomous organization (DAO) since
members know and trust one another. The addition of a new

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user both increases the diversity of perspectives and has an
impact on the Axie Infinity project. There's a possibility that
the number of members of the DAO may increase from a few
to thousands as more people start holding AXS tokens and
join the ecosystem. When the scope of the project has
reached a certain point, adding more AXS holders is no
longer beneficial. To put it another way, the value of the
network effect diminishes at a certain point as more users
join.

On the other hand, DAOs come with a plethora of extra


benefits. The development of an emotional connection or a
tribal loyalty to the success of the project is possible via the
acquisition of ownership and voting rights. It is more accurate
to call this a psychological switching cost, as opposed to a
network effect. However, the network effect could prove to
be a more effective kind of defense in this particular case.

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Axie Infinity Scholarship Programs

The ecosystem that Axie Infinity provides acts as the highest


possible layer of network effect. Axie Infinity may only be
played with a minimum of three Axies, each of which costs at
least $200 and can be purchased from the Axie marketplace.
This is a significant financial commitment for a large number
of participants, especially those coming from developing
countries.

There are "scholarship" programs that "rent" Axies to


potential players in order to lower the entry barrier and make
the game more accessible to more people. The program then
gets, in the same manner as a student loan would, a portion
of the money that the participants earn by playing the game.
When there are more scholarships available, Axie Infinity
becomes more accessible for players who are just starting
out. An increase in the number of potential Axie Infinity
players will be beneficial to scholarship programs. Due to the
fact that Axie Infinity is the underlying product, this might be
considered to have the characteristics of a Web2 platform.
However, this is not something that is exclusive to Axie
Infinity. Other kinds of play-to-earn (P2E) games, including
The Sandbox, support these kinds of platforms. As a result,
the network effects are not very strong in this scenario, and
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one cannot rely on them to offer any kind of defense.

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CONCLUSION
In light of the developments in the metaverse and the
shortcomings of web2, it is abundantly evident that web3 is
required. An industry that is already thriving is now working
on the development of its foundational technologies and
infrastructure. It would be unwise for companies not to take
advantage of the opportunities that it brings. Even while there
are good reasons to criticize the current state of the market,
this should not be taken as evidence that the concept itself is
flawed.

In the future, there will most surely not be a single orthodoxy


to which efficient solutions will conform. It is impossible for us
to exist in a world in which everything is absolutely
decentralized and under the complete authority of the
general population. The concept known as "Web2.5" alludes
to the belief that centralized components like support
organizations will continue to exist.

It seems probable that the innovator's dilemma — which


refers to a notion that explains how huge, successful
businesses might collapse despite doing everything perfectly
— will play a role in the development of Web3. First, there are
certain specific use scenarios in which web3 may be
successful because its benefits exceed its drawbacks. As a
result of economies of scale, it will become less difficult to
compete in other fields as the economy continues to grow. It
is inevitable that, as time goes on, it will get ingrained in the
foundation of the internet even more.

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REFERENCES

The following references were consulted to create this Super


Guide:

➔ https://fourweekmba.com/web3/
➔ https://trufflesuite.com/blog/how-the-arrival-of-web
-3-0-is-transforming-traditional-business-models/
➔ https://www.exodus.com/news/what-is-web3/
➔ https://youtu.be/4nkma1K_h10
➔ https://www.visartech.com/blog/web3-blockchain-t
echnology-for-businesses/
➔ https://activeplayer.io/axie-infinity/
➔ https://www.geeksforgeeks.org/web-1-0-web-2-0-a
nd-web-3-0-with-their-difference/
➔ https://101blockchains.com/web-2-0-and-web-3-0/
➔ https://www.suffescom.com/blog/web3-business-re
venue-model/
➔ https://www.exodus.com/news/web3-is-transformin
g-business-models/
➔ https://www.adeccogroup.com/future-of-work/lates
t-insights/understanding-daos-and-the-future-of-wo
rk/
➔ https://www.yahoo.com/now/hash0629-seg3-1725
45341.html
➔ https://www.rollingstone.com/culture-council/article
s/social-tokens-from-tokenized-things-tokenized-p
eople-1339070/
➔ https://tryroll.com/social-tokens-web3artist/

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➔ https://www.binance.com/en/blog/nft/what-is-a-dao
-and-how-does-it-benefit-nfts-4214998246849039
92
➔ https://www.socialmediaexaminer.com/nfts-and-da
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➔ https://rebeldot.com/web-3-0-for-businesses
➔ https://www.precoil.com/articles/web3-business-m
odel
➔ https://medium.com/fabric-ventures/which-new-bus
iness-models-will-be-unleashed-by-web-3-0-4e67c
17dbd10
➔ https://www.globenewswire.com/news-release/202
2/06/08/2459079/0/en/Web-3-0-to-Bring-a-Paradi
gm-Shift-to-Traditional-Business-Models-GlobalDat
a-Plc.html
➔ https://makeanapplike.com/web3-investment-ideas
-opportunities-models/
➔ https://appinventiv.com/blog/what-is-blockchain-as-
a-service
➔ https://fourweekmba.com/blockchain-business-mo
dels/
➔ https://www.investopedia.com/terms/b/blockchaina
saservice-baas.asp
➔ https://www.forbes.com/sites/forbestechcouncil/20
21/10/14/the-rise-of-no-code-and-low-code-solution
s-will-your-cto-become-obsolete/?sh=362a22b34a
af
➔ https://www.spiceworks.com/tech/devops/guest-art
icle/how-low-code-no-code-platforms-can-transfor
m-your-business/
➔ https://netonomy.net/2014/01/24/ticket-sales-busin
ess-models-retailer-marketplace-ticket-platform/

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➔ https://productmint.com/the-eventbrite-business-m
odel-how-does-eventbrite-make-money/
➔ https://makeanapplike.com/web3-investment-ideas
-opportunities-models/
➔ https://cryptominded.com/web3-companies-make-
money
➔ https://www.expensivity.com/how-to-make-money-
with-web-3-0/
➔ https://platforms.substack.com/p/web3-network-eff
ects-five-mental?s=r
➔ https://www.chetu.com/blogs/blockchain/5-key-blo
ckchain-protocols-you-need-to-know.php
➔ https://breadcrumb.vc/crypto-nfts-network-effects-i
n-web3-7689cf8f0439
➔ https://coinyuppie.com/crypto-and-nfts-network-eff
ects-in-web3/
➔ https://uxdesign.cc/web3-new-business-in-the-new
-web-fd99170962f3

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ABOUT THE AUTHOR

Daniel Pereira is a Brazilian-Canadian entrepreneur that has


been designing and analyzing business models for over 15
years. You can read more about his journey as a Business
Model Analyst here.

E-mail Daniel if you have any questions


at: [email protected]
You can connect with Daniel at Linkedin:
https://www.linkedin.com/in/dpereirabr/

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