What Kind of Web3 Do We Actually Need?
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What Kind of Web3 Do We Actually Need?
As innovators, if a project doesn't offer strong product value or function as a financial scheme, cryptocurrency enthusiasts won't pay attention to it just because it carries a Web3 label.
Navigating Web3 tides with focused insightsAuthor: Lyric
I seriously doubt what kind of innovation current Web3 projects (I mean the blockchain-based Web3, not the AI-related Web3) are actually bringing.
Common characteristics of today's Web3 products include:
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Having an existing internet counterpart or being centered around NFTs
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Login via wallet connection
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Smart contracts are written once, but due to poor performance, a centralized layer is added on top
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Content is put on-chain and NFTs are issued
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User experience is generally worse
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Issue a token, create a DAO, and pretend it’s democratically guiding the project
Then when you ask what business problems decentralized Web3 actually solves, I feel like the real answer is just helping founders make money by issuing tokens.
Traditional innovators like to say "fake it till you make it." In today's Web3 world, it's more like "fake it till you make a token and sell them all."
Heaven is full of great works; hell is full of great visions
Recently, I was chatting with a friend about how hard user acquisition is for Web3 products—even for genuinely well-crafted ones like Planetable, user numbers remain extremely low. Meanwhile, projects that resemble Ponzi schemes tend to attract far more attention.
This reflects a mismatch in user demographics. The crypto community does not represent a holistic version of general internet users. Most crypto enthusiasts are eager to receive token airdrops from Web3 projects, but they have little interest in the projects themselves.
In other words, if your project doesn’t offer strong product value or operate as a financial scheme, crypto fans won’t pay attention just because it carries the Web3 label.
The consequences are clear:
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For those who follow their ideals, respect freedom, and build products sincerely, they must operate within a small niche market (crypto), which already comes with significant barriers to entry—like requiring users to have wallets.
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For those focused on market trends whose primary goal is making money through financial engineering, the actual product becomes irrelevant—the key is whether the financial mechanism gains market approval.
From the perspective of financial success, a rising token is a good token (aka finance needs a good story). But from a product standpoint, this creates a classic case of bad driving out good.
As a result, in the entire Web3 space we see mostly grand visions, rarely great works (or the good ones get forced out)—so the Web3 market has become hell.
The decay of innovation
Beyond market dynamics, another challenge facing Web3 innovators is the decay of innovation layers—the process of innovation itself becoming increasingly uninteresting. Of course, this is a common trajectory for all technological innovations: mobile internet went through it, AI is going through it, and so is blockchain.
Take blockchain as an example:
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Bitcoin: Simple technology enabling a decentralized financial system; simple human choices enabling decentralized governance.
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Ethereum: Complex technology enabling a Turing-complete decentralized virtual machine.
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Web3: Cobbling together a low-end version of an existing product. Assuming the future belongs to blockchain and everyone will hold tokens, there must be native blockchain versions of everything. Just as TikTok showcases your beautiful life, Web3 showcases your expensive digital pictures.
These three levels of innovation are progressively declining—from immortal greatness, to perpetual health, down to merely decent. Innovation itself is becoming increasingly trivial.
Of course, the level of innovation doesn't strongly correlate with commercial success. A lending-focused project can easily reach a $4 billion valuation and be hailed as a blockchain innovation. If P2P companies heard this, they'd laugh their heads off.
But overall, Web3 and blockchain innovations by later entrants are rapidly becoming boring. Last year, friends from top-tier tech firms were leaving their jobs to jump into Web3 because traditional internet had stopped being cool—but I think Web3 and blockchain are quickly losing their cool factor too.
“Like traveling. Welcome from a place (you think) is boring to a place (I think) is boring.”
What kind of Web3 do we really need?
Last month, I debated ChatGPT about potential use cases for Web3. Despite its best efforts to convince me of Web3’s benefits, I refuted each point—and eventually, it had to admit most applications don’t need Web3 or blockchain.
Ideals may be lofty, but the reality of Web3 product DAUs is harsh. Most businesses simply don’t need Web3 or blockchain. We shouldn’t design artificial problems just to solve them, like building socialism. For instance, if a Web3 social app still needs to recruit users from Twitter, then the product probably isn’t working.
First, if you're doing Web3, embrace idealism and don’t expect immediate recognition. Be prepared for your work to be seen as a toy for a long time—after all, Bitcoin was considered a toy for years. If you’re dissatisfied with big corporations and centralized institutions, then focus on serving “that small group of rebellious people.” When someone goes looking for Zion, you can tell them it’s right here—and ask whether they’ll take the blue pill or the red pill.
“AI has similar issues—maybe I’ll write about that another time.”
Second, we need to think about what products are genuinely useful for ordinary people, not just for the “crypto crowd.” If we believe blockchain can change lives, then actually go change lives—build things people truly need. For example, I’ve been using Mixin Messenger consistently over the past few years because it genuinely improved my life: I needed an open-source, privacy-focused, end-to-end encrypted communication tool, and Mixin Messenger remains the best option available (since Signal is too hard to use).
This goes back to the first principles of product design: whatever you build should meet at least one of two criteria—it should be either interesting or useful. Many people still call Bitcoin a toy after more than a decade. But toys can be fun. Most current Web3 products aren’t even fun (including the ones I’ve built).
People's choice
By the way, here’s a simple test to judge whether a Web3 project is credible: if it requires you to buy its token to use the service, the likelihood it’s not credible increases significantly.
The Planetable and Mixin Messenger I mentioned earlier both pass this test. Planetable relies on ENS but has no token of its own. Mixin Messenger issued a token, but you don’t need it to use the app. They serve as excellent examples.
As one of Web3’s innovators, I hope our work can become one of the people’s choices. So I’d like to emulate Trinity and Morpheus from The Matrix, seeking out potential kindred spirits. Conversely, if people ever begin questioning the Matrix (i.e., big corporations, centralized institutions, and organizations), and wish to pursue true freedom, remember that Web3 and blockchain exist.
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Lyric
