Whether naturally or technologically, evolution has always been an integral part of the human system. In the past few months, one of those evolutionary terms we’ve heard multiple times is Web 3.0, making many wonder what exactly it means, especially in the crypto market. Here, we examine Web 3.0 tokens and why they are hot in the crypto market right now.
What is Web 3.0
Web 3.0 refers to a new stage in the evolution of the internet as we know it. It represents a stage where your internet and every content you come across is tailored exactly for you alone—a phase when the internet will be more open, intelligent, and autonomous.
Unlike the current phase of the internet, Web 2.0, where data is mostly centralized, data in Web 3.0 will be more decentralized. This will allow interconnection. It’ll also involve machines and users interacting with data. Fundamental to this phase are artificial intelligence and the semantic web.
Web 3.0 and Cryptocurrency
Now that you have some idea of what Web 3.0 is, you’re probably wondering what it’s got to do with cryptocurrencies. Since Web 3.0 will be decentralized, it’ll work through decentralized networks—the same networks on which blockchain and cryptocurrencies are built.
While Web 3.0 is yet to fully happen, we already see some early-stage applications on the blockchain, and these applications have been doing great. In addition, tokens associated with Web 3.0 applications on the blockchain have been performing well above expectations, especially when compared with Bitcoin and altcoins.
According to Messari, Web 3.0 tokens witnessed a 244% increase in value on average for the whole year as of August. While that’s lower than NFT’s 2,726% growth, it’s far better than Bitcoin’s 37% rise within the same period. While Bitcoin has become more stable and a worthy asset for institutional investors, this data shows that Web 3.0 might be the new frontier for speculative crypto traders looking to make huge wins.
Despite the crypto market dips this year, top decentralized internet tokens have seen massive gains. For example, coins like Helium (HNT), BitTorrent (BTT), and Livepeer (LPT) have increased by at least 800% this year alone. Crypto experts believe this is good for the crypto market. As a research analyst for Trade The Chain, Nick Mancini said, the exponential growth of the Web 3.0 ecosystem and how it’s kept most of the gains despite market dips is great. In addition, higher prices mean more demand and expansion of services that are good for the ecosystem.
The Growth of Web 3.0
Several Web 3.0 applications are already establishing themselves on various blockchains. For instance, Livepeer protocol is on Ethereum and provides a marketplace for streaming applications and video infrastructure providers. Graph and Filecoin both provide decentralized data management and storage networks. Helium incentives small businesses and consumers to serve as validators and provide wireless coverage on its network.
The whole Web 3.0 tokens niche now has about 50 coins with over $25 billion market value. This doesn’t include Chainlink, which has a market cap of around $10 billion (since Oracle is mostly associated with DeFi). Currently, Web 3.0 market value is worth a minuscule of Bitcoin’s total market cap. But that’s not surprising. A year ago, the DeFi sector was worth around the same range. Today it’s worth over $50 billion with 141 assets. Thus, it’s only a matter of time.
When Will Mainstream Adoption Happen?
Although Web 3.0 tokens have been performing better than other Cryptocurrencies throughout this year, interest in them is still minimal. Most people aren’t even familiar with them as they are with Bitcoin, altcoins, NFT, or even other projects.
Some have blamed this on the complexities of Web 3.0 compared to DeFi. But it’s not just that. Web 3.0 is late to the party. So, it’ll take some time before it gets the same awareness that DeFi has. However, Kyle Samani of Multicoin Capital believes that Web 3.0 can capitalize on DeFi mistakes and bad publicity to catapult into mainstream awareness.
Institutional Investors Are Already Getting a Piece of the Pie
No one can tell how soon Web 3.0 will become mainstream. But institutional investors are betting big on it. For example, Grayscale, the biggest digital assets portfolio investment manager, launched a livepeer trust in March. Grayscale Investments’ Director of Investor relations, Rayhaneh Sharif-Askary, said that investors want diversification into Web 3.0 just as they are interested in bitcoin and Ethereum within the same asset class.
Web 3.0 tokens have seen a massive and unrivaled rise in value this year alone. Even though they aren’t mainstream yet, this increase in value and their use cases will drive demand. It’s only a matter of time before this sub-sector becomes as prominent as DeFi.