Translated by Clara
Table of Contents
1. Overview
2. Bain & Company: Web3 market will have various business opportunities around four domains
3. Xangle: Systemic analysis on on-chain data will become more important as public blockchain use cases increase
4. Recap
1. Overview
On July 11 and 12, Xangle hosted ADOPTION 2023 for the second time following last year under the theme of “Exploring the Business Value in Web3,” and more than 200 companies from various industries—gaming, entertainment, distribution, manufacturing, finance, IT—were in attendance. Last year’s Terra (LUNA) and FTX debacles followed by this year’s collapses of Silvergate, SCV, and Signature Bank put the crypto market in a state of “crypto winter.” Nevertheless, the conference was packed with companies confident in the coming Web3 mass adoption, looking for new business opportunities. The main sessions, fitting the theme of mass adoption, provided insights from domestic and global companies on Web3’s future growth strategies, cautions to take in adopting blockchain technology, as well as the decision-making and trial and error they experienced in entering the Web3 market.
Xangle Research has organized the presentations at the conference into a four-part ADOPTION 2023 series based on the themes of insights, NFTs, gaming, and consumer goods. And in the first part of the series, Insight, we hope to share the perspectives the openers of the two-day conference, Bain & Company and Xangle, on the strategies of entering the Web3 market and the future of the blockchain industry.
2. Bain & Company: Web3 market will have various business opportunities around four domains
Yeonghoon Yang, Partner at Bain & Company, began his session by emphasizing that mass adoption is no longer some distant idea. He stressed this industry that was initially oriented around speculation-driven individuals without knowledge on the technology is gradually evolving to be corporate and institution-oriented as the groundwork is being laid for service differentiation and the increased entry of large traditional companies.
Moreover, Yang predicted that penetration of Web3 will begin with highly inefficient industries or industries with high demand for Web3 from market participants, as mass adoption of blockchain will take various form depending on each industry. Therefore, the Web3 industry currently built on financial and gaming sectors will grow into one with a large customer base that can offer new value to consumers with Web3 adoption.
Yang, before introducing Web3 business opportunities, categorized Web3 business domains as follows:
- Access Layer: The channel through which customers access Web3 services such as wallets, CEX, and custody services
- dApp: Applications that customers use to utilize Web3 services
- Mainnet: The operating system (OS) that underlies the dApps used by customers
- Infra: Infrastructure that implements technical services so that all the above ecosystems can be realized
He believes that as the Web3 ecosystem develops, various business opportunities will emerge in each domain. While the Web3 ecosystem currently remains in the PoC stage for crypto-based customers, he expects mass adoption to occur as killer dApps emerge. He also saw that as user-based Web3 service models become more sophisticated, more Web3 business opportunities will arise in the medium to long term.
As a strategic approach to the above business opportunities, Yang suggested 1) capturing users by forming a mainnet-based Web3 ecosystem, 2) building differentiated capacities/services within current businesses based on Web3, and 3) Web3-oriented B2B technology/solution services, emphasizing the strategy of capturing users by forming a mainnet-based Web3 ecosystem. Yang believes that in the future, the mainnet ecosystem will be differentiated according to the characteristics of each industry. Thus, if a mainnet ecosystem specialized in an industry can be formed, it can lead to onboarding dApps fitting that mainnet, while attracting customers who use dApps and secure customer data at the same time. In short, building industry-specific mainnet ecosystems is effective in securing both users and dApps.
Finally, Yang predicted that Web2 companies will accelerate their entry into Web3 in the future, intensifying the competition for the ecosystem leadership between Web2 and Web3 native companies. Then he concluded by stressing that a quick market entrance and various business model testing are the way to reduce risk in entering the Web3 industry, since the current industry is still in the near-term future stage of the Web3 ecosystem development.
3. Xangle: Systemic analysis on on-chain data will become more important as public blockchain use cases increase
James Kim, Co-CEO of Xangle, started by stating that Web3 is no longer in the early stages of testing, but is now in an adoption/expansion phase as it faces a new business environment. In the early stage of any market, products emerge and do not involve deep contemplation on the business due to the excitement for new and innovative technology. Then eventually, new businesses models that fit each industry emerge and are practiced as the market matures. Likewise, Web3 has outgrown its initial stage of issuing tokens and NFTs void of clear business models, and has reached the point where we must think about how each industry will apply blockchain technology and find new business models.
Kim emphasized that the importance of data utilization is becoming increasingly important amid recent changes in technological trends. Recently, verified data is becoming more important due to increased use of AI, including ChatGPT, and at the same time, securing personalized data by engaging data owners is also becoming more important as access to personalized data becomes more difficult. Kim proceeded to explain that the adoption of blockchain could have implications for data utilization, as utilizing a public chain while introducing blockchain will free existing corporate data from being limited to data within the platform/enterprise and enable the production, verification, and utilization of data from the entire ecosystem. This allows securing reliable on-chain data that can be fed into AI within the public chain, as well as personalized data from ecosystem participants.
Kim predicted that on-chain data, which has exclusively been utilized only from a trading and investment perspective, will include not only industry analysis but also measure business performance as Web3 evolves. He also believes that the more advanced the Web3 industry becomes, the more specific the data required by each industry will become, because each industry has different data needs. In the past, it was common for all companies to manage data internally through their own ERP, limiting access to external data. In contrast, in the Web3 environment with blockchain technology, anyone can access public chain data, which improves access to external data.
However, while the availability and accessibility of on-chain data expands, service providers entering Web3 face various on-chain data-related issues. Specifically, 1) access to fragmented Web3 data points, 2) lack of Web3 business performance measurement, 3) difficulty in internal management of on-chain data such as circulation, and 4) incompatibility with legacy processes/systems.
Xangle announced the launch of Xangle Beacon, a comprehensive service to help Web3 businesses operate, manage, and scale, focusing on the needs that arise from above internal management issues. Through this service, Xangle will provide on-chain data for comparing each industry’s capacity to measure performance, and support token circulation and financial data compatible with legacy processes/systems as an internal management tool. Xangle also announced that a beta version is in development with several enterprises, and the service is targeted for launch in the second half of the year. In the future, Xangle Beacon aims to help Web3 operators with market research solutions for establishing business strategies by identifying market trends based on on-chain data and develop internal management tools for efficient management of tokenomics.
4. Recap
Bain & Company and Xangle presented Web3 market entrance strategies and the future of blockchain industry respectively through keywords like “Web3 business domain” and “on-chain data”. Both companies noted that the Web3 industry is currently moving out of its initial stage and into a period of expansion, and they agreed that the industry, which was previously driven by speculative demand, is gradually creating a new business environment based on the possibilities opened by technology. In wrapping up Part 1 of this ADOPTION 2023 series, we hope the message from the two companies will help enterprises entering into Web3 to create meaningful outcomes.