- Web3 redefines the internet by giving users control over their data, identities, and digital assets.
- The Web3 ecosystem includes cryptocurrencies, DeFi, NFTs, DAOs, and dApps, all of which are growing rapidly.
- There’s projected significant growth in cryptocurrency, DAO, NFT, and DeFi markets by 2030 with a promising CAGR.
- Web3 is a revolutionary force bringing substantial changes to the digital world but has limitations and criticism among many people.
Blockchain technology and Cryptography introduced a new paradigm shift in the Internet evolution. Emerging from the intersection of these two, web3 was aimed at creating a decentralized web where users control their own data, identities, and digital assets.
Blockchain technology was first recognized in 2009 after the launch of the Bitcoin whitepaper. Since then, Web3 has shown incredible growth. Web3 is not just a regular web given different technology and name. It has multiple aspects to it, and the growth is significant in each one of them.
The Rise of Cryptocurrencies and Blockchain
Since the introduction of Bitcoin, there has been a proliferation of cryptocurrencies and blockchain networks. Each Crypto has its own features and use-cases. Bitcoin was introduced as a store of value currency, providing a hedge against traditional finance, while Ethereum launched as a decentralized blockchain with smart contract functionality.
As of June 2023, the total combined value of all cryptocurrencies is $1.19 Trillion. The market capitalization of Bitcoin is approximately $592.69 billion, and the market capitalization of all other cryptocurrencies (Altcoins) combined is approximately $589.83 billion. The market cap of stablecoins is around $126.39 billion, which is included in the altcoins’ market cap.
Decentralized Finance (DeFi) Takes Off
This is one of the most significant developments within the Web3 space. DeFi aims to recreate traditional financial systems like lending, borrowing, derivatives, exchanges, etc., in a decentralized manner on the blockchain.
One of the earliest projects was MakerDAO with its decentralized stablecoin DAI, created in 2015. But DeFi started taking off in 2018 when developers started creating financial tools leveraging Ethereum and after the introduction of Uniswap, a decentralized exchange. The total value locked in DeFi protocols across multiple blockchains is around $50 billion, which has seen a significant decline.
Non-fungible Tokens (NFTs): A New Form of Ownership
NFTs have emerged as a new form of digital asset ownership. Unlike cryptocurrencies like Bitcoin and Ethereum, NFTs aren’t interchangeable for other tokens 1:1. Instead, each NFT has a unique value and specific information that can’t be replaced, similar to a collector’s item.
NFTs have multiple different types, each with its unique function. Artistic tokens, Collectibles, utility-based NFTs, Community-based NFTs, gaming, and virtual real estate NFTs are just a name of few. The total market cap of NFT tokens is $ 7.6 Billion, which was non-existent before 2015.
Decentralized Autonomous Organizations (DAOs): The Future of Governance
DAOs are an organizational form that leverages blockchain technology to decentralize decision-making and governance. The key characteristics of DAOs are decentralization, autonomy, and token-based governance.
DAOs can be used for a wide range of applications, from the governance of a blockchain project to the management of a venture capital fund. MakerDAO was one the earliest projects, but the concept of DAO was popularised by “The DAO,” which launched in 2016 and ended up raising $ 150 million in public crowd sale. As of 2023, the total value locked in all DAOs is approximately $6.3 billion.
Decentralized Applications (dApps): A New Kind of App
dApps are applications that run on a decentralized network. dApps have their backend code run on a decentralized peer-to-peer network, so it matches providers with users directly without involving a third party.
The number of dApps has also seen significant growth. In 2015, there were just a handful of dApps. In 2023, there are approx 5659 dApps across mainstream blockchains.
These are the main aspects of a web3 ecosystem. Over the years, the interoperability and scalability of blockchains, web3 browsers and interfaces, and other privacy-focused solutions have also gained traction and will continue to grow.
Looking Forward: The Growth of Web3 After 2023
The cryptocurrency market is expected to hit $4.94 trillion globally, more than triple its size of $1.49 trillion in 2020, with a compounded annual growth rate (CAGR) of 12.8%. Bitcoin’s price is predicted to hit $1 million per bitcoin, and Ethereum’s market cap is forecasted to hit $20 trillion by 2030, with each token priced around $170,000-$180,000.
DAOs are forecasted to manage assets worth $1 trillion by 2032. The non-fungible token (NFT) market is expected to reach around $357 billion by 2030, with a CAGR of 39.6% over the forecast period, and the market cap for luxury NFTs could reach $56 billion by 2030.
At the same time, the global DeFi market is estimated to reach $231.19 billion by 2030, with a CAGR of 46% from 2023-2030.
Remember that these are projections to get a sense of potential growth in the web3 ecosystem. Forecasts are subject to change. More importantly, the future of blockchain technology and cryptocurrencies is uncertain because of the volatility and unpredictability of crypto markets as well as criticism and scrutiny from regulators and lawmakers.
Conclusion: The Web3 Revolution
To wrap things up, we’re in an exciting time where the internet is changing in big ways. Web3, powered by blockchain and cryptography, gives us new stuff like cryptocurrencies, DeFi, NFTs, DAOs, and dApps. These things have grown a lot and are predicted to grow even more.
Ultimately, web3 is bringing a significant change to the internet, finance, digital ownership, and privacy. It’s not just a passing trend; it’s a revolution. And even though revolutions can be a wild ride with ups and downs, they can also lead to amazing new things. So, let’s see where this ride takes us.
NFT market size: https://www.prnewswire.com/news-releases/non-fungible-token-nfts-market-size-to-reach-usd-3-57-316-3-million-in-2030–increasing-use-of-nfts-in-supply-chain-and-logistics-and-rising-demand-for-decentralized-marketplaces-are-some-key-factors-driving-industry-growth-ac-301464169.html
The global crypto market cap: https://www.coindesk.com/markets/2021/08/25/cryptocurrency-market-will-more-than-triple-by-2030-study/
Current market cap of DeFi, Stablecoins and Altcoins: https://btctools.io/stats/market-cap
Current market cap of Bitcoin: https://ycharts.com/indicators/bitcoin_market_cap
Total value locked in DeFi: https://www.statista.com/statistics/1272181/defi-tvl-in-multiple-blockchains/
Global Crypto market cap currently: https://coinmarketcap.com/