2024 Outlook for Web3 Innovation: Urgent Situation, Favorable Conditions, Key Lies in Thinking
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2024 Outlook for Web3 Innovation: Urgent Situation, Favorable Conditions, Key Lies in Thinking
During the 2024 bull market, it is essential to quickly deliver valuable, publicly impactful, and convincing innovations in the Web3 space.
Navigating Web3 tides with focused insightsAuthor: Meng Yan
The current situation is quite clear: under normal circumstances, the crypto market will enter a bull phase in 2024, with capital flows and market sentiment driving significant price increases for crypto assets. Although there have already been three bull markets over the past decade, the external environment this time is markedly different. Simply put, during previous bull runs, while the crypto industry made money, so did other sectors—people envied crypto’s success but didn’t resent it. This time is different. The global political and economic landscape is becoming increasingly complex, tense, and confrontational, making life harder for many. Against such a backdrop, if an industry widely perceived as speculative and gambling-oriented experiences extraordinary prosperity, it will stand out starkly and appear especially offensive.
Moreover, there are few people today willing to speak up for crypto. Since the violent collapse of the crypto market in 2022, external curiosity and patience toward the industry have largely evaporated. Today, beyond stakeholders within the industry itself, it is difficult to find outsiders who view crypto without bias or with any positive sentiment. If a bull market does emerge, these pre-existing biases and strong negative perceptions could quickly turn into jealousy and hostility, potentially triggering aggressive regulatory intervention or even crackdowns on the crypto sector. In severe cases, the market could crash overnight due to external pressures, and individuals could face serious legal trouble. Those in the crypto industry must be psychologically prepared for this possibility.
What should be done?
It has become exceptionally important and urgent to rapidly deliver meaningful, publicly impactful, and persuasive innovations within the Web3 space.
We need to clarify the relationship between crypto and Web3. I define crypto as the trading of encrypted digital assets, and Web3 as a technological innovation movement aimed at building a trustworthy digital economy. Ideally, crypto and Web3 would be closely linked—two sides of the same coin—with Web3 serving as the real economy behind crypto, and crypto acting as the virtual economy of Web3. But in reality, for years this pairing has suffered from excessive speculation and weak fundamentals: hype and financial engineering constantly evolve, while Web3 applications remain stagnant.
There are three main reasons for this problem. First, many people don’t believe Web3 has a future. Second, the technical infrastructure required for Web3 success remains weak. Third, Web3 lacks a clear guiding philosophy and methodology. Once these three issues are resolved, Web3 innovation will flourish.
Can these three problems be solved by 2024? I believe there is a strong chance they can.
Let’s start with the first issue: whether Web3 has a future. The narrative around Web3 isn’t hard to grasp—it’s primarily about using cryptographic innovations to build a self-sovereign, trustable contractual environment in the digital economy. The technological foundation of Web3 is solid, its feasibility is unquestionable, its logic is clear, and its value proposition is evident. In principle, the question of its long-term potential shouldn’t even be controversial. However, premature financialization has created significant noise and distortion around the Web3 story. Vitalik’s recent complaints about so-called “degen gamblers” stem precisely from this issue.
There’s an open secret within the community—one widely known but rarely spoken aloud—that among those considered “most successful” in “this industry,” a significant number neither understand nor believe in Web3. Deep down, they never believed blockchain and decentralization technologies had any use beyond speculation and trading. Thus, as prominent figures in the space, they often semi-publicly proclaim in various forums that blockchain is unsuitable for real-world economies, mocking Web3 as a castle in the air, impossible to realize. This phenomenon is widespread in Asia’s crypto circles and severely distorts public understanding of Web3.
This absurd situation arises because the outside world generally conflates crypto and Web3 as one and the same. In fact, many who have succeeded in the crypto trading markets lack technical depth—especially in cryptography—and treat crypto assets merely as another speculative instrument. Through speculation or market manipulation, they’ve achieved temporary financial gains. They neither understand nor care to learn about the underlying logic of Web3, nor do they see how cryptographic technologies might impact real economies and lives. If Web3 and crypto are treated interchangeably, and success is measured purely by profit, these short-term trading winners may be mistaken for thought leaders in Web3—seen as highly insightful, their words taken as gospel.
But this is a serious misunderstanding, because Web3 and crypto are not the same thing. A successful trader in the crypto market might be a speculation expert, a master at reading crowd psychology, a market manipulator, an insider trader, an arbitrageur, or simply lucky—but none of this implies any competence in Web3. Such a person might not even grasp basic Web3 technical concepts, and could genuinely believe cryptography is incomprehensible, blockchain is impractical, and Web3 is pure hype. In the real world, if a Wall Street trader dictated the direction of AI large model innovation or claimed a molecular formula for an anticancer drug was structurally flawed, most would consider him delusional. No one would take his word over that of professors at OpenAI or Johns Hopkins University just because he made money trading AI or biotech stocks. Yet in the Web3 space, when a crypto trading guru (or more likely, a market manipulator or insider trader—aka a “收割者”) speaks dismissively about ZK, L2, or advanced tokenization techniques, crowds cheer. The absurdity of this scenario needs to be fully recognized.
We must return Web3’s narrative authority to those who are actually building Web3 innovations—those doing the real work—and clearly articulate Web3’s vision, logic, and feasibility. Once we do, the question of whether Web3 has a future will resolve itself.
The second issue—the weakness of Web3’s technical infrastructure—has been a severe constraint over the past decade. Expectations for Web3 have far outpaced infrastructure development, resulting in many promising ideas either failing to materialize or performing poorly when implemented. This is also a key reason some naysayers claim Web3 is doomed: lacking technical understanding, they judge only by surface appearances.
However, Web3 infrastructure has made substantial progress in recent years. This includes not only blockchains but also ZK, accounts, DeFi, wallets, development tools, developer education, and other protocol-layer and supporting components. Notably, stablecoins are also part of the infrastructure—and possibly one of the most critical. The development of stablecoins, regulated stablecoins, and CBDCs is actually a key enabler for today’s discussions around Web3 application innovation.
How mature is Web3 infrastructure today? In short: it’s beginning to take shape. Performance has reached a level where meaningful applications are feasible, and when combined with token-economic subsidies and incentives, the cost structure now supports large-scale deployment. Broadly speaking, both performance and cost now suffice to support foundational chains for large-scale, high-concurrency applications.
The current main challenge is fragmentation—numerous competing ecosystems, each with strengths and weaknesses, but no single option yet balanced across all dimensions. Ethereum offers strong security, large asset scale, and abundant developers, but poor performance. Various EVM mainnets and L2s offer excellent performance but limited assets. Solana delivers high performance and solid tooling, but too few developers. Overall, full competition has begun, but no player yet meets all economic and technical requirements. Nevertheless, Web3 infrastructure has reached a point where innovators now have rich compositional options. In 2024, Web3 builders should no longer use weak infrastructure as an excuse.
The third issue—the lack of a guiding philosophy and methodology—is currently the most pressing challenge. To put it bluntly, the entire Web3 industry is still groping in the dark, unsure of which path will lead to a breakthrough.
This was the state of the internet industry before Google established its advertising business model in 2004. Many understood the technical capabilities of the internet, theorized potential directions, and built early applications, but nothing had truly scaled. Beyond email, content distribution, media, and illicit activities, nobody knew what else the internet could do—or how to monetize it.
Today’s Web3 is in a similar position: plenty of theoretical ideas, but nothing viable beyond asset transfers and speculation. Beyond various forms of token issuance, no sustainable business models have emerged. The industry desperately needs a methodological breakthrough.
I remain optimistic. Over the past few years—especially in 2023—Web3 has made important advances at the frontier of thinking.
First, the understanding and articulation of Web3’s core value proposition have become sharper. Increasingly, people are recognizing “self-sovereignty” and “trustworthiness” as Web3’s fundamental values, moving away from treating “decentralization” as an absolute dogma. In fact, decentralization is merely one means to achieve self-sovereignty and trust—and often not the most rational one. I believe that in 2024, through deeper theoretical exploration and successful case studies, leading Web3 innovators will move beyond fundamentalist “decentralization at all costs” thinking, focusing instead on more essential elements like sovereign identity, sovereign accounts, sovereign assets, sovereign data, cross-validation, and trusted computing. This shift will drive major changes in the Web3 tech stack, expanding beyond blockchains alone to fully leverage cutting-edge cryptographic technologies like ZK, VC, and DID.
Second, there is growing willingness to engage with real-world needs, particularly regarding privacy protection and respect for authoritative institutions. Previously, Web3 remained trapped by the ideological origins of blockchain’s “cypherpunk” movement, excessively emphasizing radical transparency and simplistic consensus mechanisms like “one person, one vote, minority obeys majority”—approaches that were both unreasonable and incompatible with reality. With advances in ZK, VC, and DID technologies, new Web3 applications can now effectively and precisely protect privacy, avoiding indiscriminate data exposure, while recognizing the authority of real-world institutions in factual validation—enabling Web3 technologies to meaningfully serve real-world demands.
Third, the scope of token applications is expanding. A few years ago, the blockchain industry mostly viewed tokens as “utility tokens” representing value rights within ecosystems. But as experience accumulates across domains, it’s becoming clear that blockchain’s greatest strength lies in token management. Thus, the expansion of blockchain applications largely manifests as the broadening of tokenization. Tokens are far more than just “tokens”—they can represent value, prove rights, embody digital objects in new forms, or serve as building blocks for smart contracts. Wherever tokens go, blockchain can follow. Almost any problem worth solving on-chain should be approached via tokenization; anything unsuitable for tokenization likely doesn’t belong on-chain at all. As the Web3 industry gradually focuses its on-chain innovation around tokens, a coherent methodological framework may emerge more rapidly.
Fourth, attitudes toward regulation are undergoing a fundamental shift. Unlike before, regulators and enforcement agencies in more regions now feel confident distinguishing innovation from fraud or illegality, with fewer hesitations, more decisive decisions, and faster actions. Integrating regulatory technology (RegTech), aligning with, or even proactively supporting reasonable regulatory frameworks is now both a necessity and an inevitable trend. I’ve observed that an increasing number of Web3 applications are proactively designed to accommodate regulation—a development that is both necessary and timely.
This doesn’t mean all methodological questions in Web3 have been resolved. Many challenges remain open-ended: how to balance freedom with compliance, privacy with transparency, how to generate profits, and how to gain insurmountable advantages over Web2 competitors. But I believe that among a growing segment of Web3 innovators, old dogmas are dissolving, and new thinking is emerging along the right trajectory.
Based on these observations, I believe that within the next one to two years, the Web3 industry will witness innovations with clear value-creation logic and strong potential for large-scale real-economy applications. Genuine Web3 projects will begin attracting sustained, long-term investment, making long-cycle, cumulative development within Web3 more rewarding than short-term speculation.
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Yan Meng
