The Eve of the Web3 Industry Explosion: How Entrepreneurs Can Seize Opportunities

The Web3 industry is迎来新的发展机遇. As of the end of July, the number of独立地址 in Ethereum domain services has exceeded 500,000, indicating that the Web3 user base is expanding. Since 2017, the Web3 infrastructure has gradually improved, evolving from the early "muddy paths" to the present "asphalt roads." However, the prosperity of the industry ecosystem is still highly correlated with market cycles, and the value of链上数据 remains to be further explored. New application scenarios and user interaction mechanisms still need to be explored, and the Web3 industry as a whole is in a state on the eve of an explosion.

Recently, industry insiders participated in a salon event discussing Web3 investment and entrepreneurial opportunities, sharing their observations on the current state of industry development, investment strategies, and the entrepreneurial ecosystem with other investors. The following are the main points summary:

Key Point:

1. Composability and a unified database are the greatest values brought by blockchain technology.

2. Web3 redefines the value of data, and how to fully utilize these data resources is a direction with great innovative potential.

3. Value creation at the application layer should originate from entirely new mechanisms and interaction methods, rather than simply transplanting Web2 products.

4. Web3 is still in its early development stage, and entrepreneurial teams should focus on finding real product demands and target users, avoiding blindly following market trends.

The Development Journey of Web3 from the Entrepreneur's Perspective

Since entering the Web3 industry in 2017, the industry's infrastructure has evolved from "muddy roads" to "asphalt highways". Early developers faced many limitations, but now the middleware and protocol layers have achieved breakthroughs from 0 to 1, and the application layer has also welcomed the first wave of explosions. Tracks such as gaming, NFTs, and the metaverse are still in the exploratory stage. Many of the current leading projects were born during the last bull-bear transition period, such as OpenSea, Sandbox, Uniswap, etc.

The core value of blockchain technology

1. Composability: Code and digital assets can achieve permissionless cross-application calls and interoperability, greatly enhancing development efficiency.

2. Unified Database: Connecting user data across applications, allowing login and use of multiple applications with just one Address, the data value is huge.

Based on this, there are two important investment themes worth paying attention to:

Data Topic: On-chain data is a "gold mine" that allows for multi-dimensional tagging and analysis of addresses. From the underlying data sources, to the intermediate cleaning and analysis, and finally to the upper layer of protocols and applications, each layer has nurtured unicorn-level companies.

Application Layer Theme: In the next 3-4 years, there may be a large-scale explosion in the application layer. Killer applications are not simply a combination of Web2 features, but rather innovations in interaction methods and mechanisms that integrate blockchain characteristics in specific scenarios. Successful cases of DeFi, such as AMM and liquidity pool models, are innovations on traditional financial models.

Advice for Entrepreneurs

1. Reserve sufficient funds to cope with a possible long-term bear market.

2. During a bear market, focus on finding real demand and target users, avoiding blindly following trends.

3. First become an industry believer(, then become a builder).

4. Put aside historical burdens and determine the direction of entrepreneurship after gaining an in-depth understanding of the current state of the industry.

Characteristics of investing in Web3 projects

1. Due diligence is relatively difficult, as many teams are distributed around the world.

2. The investor structure is more complex, with often more than ten institutions participating in a single round of financing.

3. Investment institutions need to provide value-added services to gain investment opportunities in high-quality projects.

Investment Preferences

1. Focus more on infrastructure and middleware, as well as applications with innovative mechanisms.

2. At the application level, creativity and ideas are more important than team background.

3. Value the entrepreneur's deep understanding of the industry and ambitious vision.

Industry Challenges

Currently, Web3 faces issues of a small user base and low activity, which are related to inadequate infrastructure and products not meeting basic needs. Entrepreneurs need to fully understand the current state of the industry and adjust their expectations before starting their ventures.

The value of investment institutions

In addition to funding, investment institutions can also provide support to entrepreneurs in the following areas:

1. Deep involvement at the business and product levels, such as co-research and strategy formulation.

2. Assist in designing the tokenomics model.

3. Resource docking and project cooperation recommendations.

4. Talent Recruitment.

5. Provide ongoing guidance on product direction to help the project reach a higher level.