Six Web3 lessons from 2022

Transcript

GM GM welcome back to another episode of The web3 Academy podcast I'm Kyle reidhead and today I'm going to be diving deep into the six vital web3 lessons that we learned in 2022 so that you can keep them in mind for the coming year now why because that's going to give us a killer start to 2023. now if you don't mind I would love it if you could just quickly go and click the follow or subscribe button on Apple podcast Spotify or YouTube feel free to give us a review too it's a no cost thing for you but makes a big difference for us so thank you friends for listening thank you friends for sharing and for following and subscribing as well we appreciate it so

much before we dive into this one here let's take a quick second to hear from our sponsors the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the creators and yet they are the most neglected web 2 platforms like Facebook Tick Tock and Instagram are all essentially robbing creators of their worth creators are a new type of entrepreneur forming new types of businesses yet with web 2 platforms creators don't own their content to their profiles and that's their product in business instead they are tied to the platforms they choose to create on well just like how crypto is freeing us from Banks web3 is freeing us from these centralized platforms on lens

protocol creators own their content own their profile and even their social graph and followers in the form of nfts this allows you to move freely from one social application to another with your content profile and followers moving along with you lens protocol enables self-soverty for your social graph and interoperability across the internet at web3 Academy we believe this is the future of Social and that's why we partner with lens to ensure that the path of social media is heading in the right direction visit lens.xyz to learn more today unlock protocol is the nft membership protocol for web3 Content subscriptions Community Access event tickets are all forms of memberships one of the most

common business models for creators and entrepreneurs today building an nft membership opens many new possibilities for your members everything from tailored multi-platform experiences to the ability to sell an unfinished subscription on secondary markets these are things just not possible in web 2. however in order for this business model to work creators need nfts which are time bound or have built-in recurring payments unlock protocol does this for your nfts better yet with a few simple steps you can create your own nft contract without code what WordPress has done for websites unlock protocol is

doing for membership nfts if you're an nft Creator you can't rely on on royalties as they are likely going to zero you need recurring Revenue you need unlocked at web3 Academy We Believe nft memberships are the future of business and community and that's why we decided to build an unlock learn more at unlock Dash protocol.com okay friends welcome back since we're coming to the end of the year it's a good idea to reflect on the top lessons we've learned over the last 12 months and goodness what a year it has been to be fair it's been a difficult year for many with hacks Global turmoil and high profile rug pulls but it's also been a

year of extreme Innovation with developer activity at all-time highs and plenty of new protocols token models and brand activations to learn from yes prices are down but prices are a terrible proxy for the state of web 3. when you look beneath the surface you can see that web3 is here to stay so it's the perfect time to prepare for the coming wave of innovation and adoption so here are the top six web three lessons we've learned this year one verify don't trust two everything looks shiny in a bull market three communities create tokens tokens don't create communities you may have heard a special someone say that line on the podcast

number four web three is officially here to stay number five creating sustainable tokenomics is difficult and number six things are not always what they seem so let's break each one of these down further so first verify don't trust look trust is an important part of Being Human without trust we wouldn't have been able to form communities that are collectively stronger than individuals without trust we wouldn't have been able to build a thriving global economy but there are limitations to trust when we trust people and organizations we rely on them to tell the truth and act in our best interests and most of the time they do but as a scene with many C5

organizations they can also choose to hide their ill intent find private companies and Slick accounting take the SPF FTX situation for example the organization was in charge of billions worth of investor dollars and instead of being responsible they decided to line their own Pockets through software backdoors and inflating token prices They even played it off as a web 3 cold war with SPF and CZ for binance ETC it's important to note that most of the problems in web3 actually arise from centralized organizations masquerading as their decentralized counterparts the implosions of FTX 3ac Celsius and other centralized entities highlight the importance of defy and

trustless immutable and transparent transactions because it was C5 that broke not defy if the actions of all these companies were on chain they would have been caught out long before they grew as large as they did and look we didn't just learn these lessons from web3 that's why web3 even exists we learned these lessons from the Decades of Fraud and problems that happen with our centralized companies centralized governments and so on and so forth so this isn't anything new but we just had it all happen in one year here in the crypto and Webster world so number two everything looks shiny in a bull market during a bull market people are prone to speculate on investments that lack intrinsic value this tends to drive up the prices of these Investments leading

to a false perception of their value as a result other people are misled into investing in protocols and apps that aren't useful in the real world between random threaders and outright crypto influencers Shilling their bags it's extremely difficult for newcomers to discern what technology is actually useful and you can't forget those random free mints all over crypto Twitter more like Freeman plus your private keys please bull markets also bring extreme optimism which leads to everything in web through in crypto looking like a Golden Goose but when you see someone tweeting about how much they made and why they're important to listen to always be skeptical rather than rely on what influencers say learn the foundations for yourself so you can make

your own decisions if you haven't already make sure to check out our Free web3 Academy Rabbit Hole course so you can evaluate projects yourself and that will be in the show notes linked to that in the show notes below this will help you understand the foundations of this industry so when you look at a business or a project or a token or a community you have a basis to judge that on so number three communities create tokens tokens don't create communities in the nft Mania of 2021 it seemed like the tokens themselves were responsible for creating communities as soon as a project teased a collection or announced the mint thousands of people would flock to their Discord in anticipation but the main problem is that speculators don't make good community members I feel like I should repeat that one

speculators don't make good community members speculators are all about money they don't care about the success of a project as long as they can flip their token successfully now there are some long-term investors which are good but the situation is pretty much the same these people focus on floor prices rather than the goals of the project sure they're a bit stickier than pure speculators but when the going gets tough well they get going to truly succeed with the tokenized community you need evangelists who believe in your mission and aren't driven solely by money these are the people who stick byprojects during inevitable bear markets and actually contribute and help projects progress and when the community comes first it helps you build a token

that's more aligned with your members because you can create it together a real world example of this comes from jump Jason Keith who joined us on a recent podcast shared that while creating his swoopa's collection he leaned heavily on the community to shape the final vision of the project the Dallas members ensure that the nft collection was inclusive for everyone in the jump dial and The Wider Community by suggesting different traits stories and even marketing strategies for the project keep in mind that building a real Community isn't easy every and nft collection says they have an amazing Community but you should remain skeptical until proven otherwise simply go participate in a community you find interesting and see what the Vibes are like it won't take long to tell if there's a real Community there or not

number four web3 is officially here to stay in previous bear Market years it's been difficult to know whether web3 will survive when ethereum dropped over 90 percent during 2018-2019 it was so significant that nobody could be blamed for leaving the space but out of that came to 2020 and 2021 bull market in the flood of innovation we see today this time around things are different much different in fact sure we've seen a significant drop in prices just like in all bear markets but the difference is that we're seeing traditional corporations so retailers Tech Giants Brands make moves in web 3. we've seen Google Cloud stand up validators and nodes with plans to offer managed node services in the future we've seen stripe

Embrace crypto payments and help creators and businesses navigate the murky Waters of kyc regulations and we've seen many big Brands experiment with nfts Nike Tiffany Gucci Adidas time Budweiser Lacoste Dolce and Cabana and the list goes on there's also been an influx of top Global Talent into web3 we've seen Andrew Saunders a friend of the show joined arbitrum as it's CMO after working at Amazon and other top corporations Keith Grossman moved from the president of time to become the president of Enterprise at moonpay Ryan Watt leave his Global head of gaming position at YouTube to become the CEO at polygon Studios and in 2023 is sure to bring many more talented Builders into

web 3. this trend is not slowing down number five creating sustainable tokenomics is difficult tokenomic design is a blend of Finance economics and Technology it's about creating the perfect balance between incentives while preventing runaway inflation ensuring long-term sustainability some of the aspects token designers have to consider include how to fairly allocate tokens to investors and other stakeholders how to distribute the tokens determine sustainable Revenue distributions if any validator and Staker compensation Network and project security governance and balancing Community Control to be frank it's an extremely difficult

process in which protocols often have just one chance to get it right or at least feasible now we've seen tokenomic models from projects like axi Infinity which incentivize millions of Gamers to join web3 and successfully earn money just from playing a game it was pretty cool when it was really booming in the early days it seemed like axi had it all figured out but the demand couldn't keep up with players selling their own tokens resulting in the token price depreciating and fewer incentives for newcomers to join it became a downward spiral and absolutely killed the game's economy in the hype around axi the same was true with the popular run to earn app Stefan which onboarded many into web 3 for a short while the result of giving away tokens without

creating a reason for people to hold or use them well it's unsustainable prices unhappy community members and a very steep climb to recovery but what we've learned so far is that tokenomics is not an afterthought it can make or break a business tokenomics should favor those who create value for a protocol or project not just incentivize people who are looking to make a quick buck tokenomics should Channel value towards those who create that value prioritizing value distribution towards higher utility groups over value transfer between participants supply and demand is everything in tokenomics and that's not an easy thing to balance it's hard enough to do it in the real world imagine trying to do it with magic internet money the closest we've seen to

perfect tokenomic structure is ethereum or eth is the token which has had seven years of iterations and experience and only just made its most important tokenomic upgrade in 2022 which is the merge to POS proof of stake if you want to understand tokenomics learn what the Geniuses over at ethereum have been working on we have a podcast on this I think it's called eth merge if you just type that into Spotify podcast you'll learn more about that and you can find that one the number six lesson that we've learned this year in web 3 is things are not always what they seem one problem in web3 and crypto is that we tend to get Evangelistic about certain protocols token standards and people we believe that people like SBF are crypto Messiah sent to Deliver Us from

centralization we thought that NFC royalties were the way for projects to generate sustainable Revenue heck we even thought that dropping a 10 000 nft collection was the only way to become successful in web 3 with nfts but in the web 3 Frontier things can and do change in the blink of an eye in 2021 entities were basically just jpegs but now it's possible to use them for token getting events as memberships crowdfunding mechanisms and so much more we even learned that it's possible to freely modify nft metadata if it isn't stored on chain and now big web 3 companies the uniswap and consensus are saying that they want to collect user data something that web3 natives oppose wholeheartedly

the companies say they won't be selling user data but as you know anything can happen so the key takeaway from this lesson is not to get married to a particular way of thinking or a particular strategy for example royalties were the Playbook of 2021 now we've seen that it's difficult to enforce them without holders giving up part of their nft ownership so you need to always be ready to Pivot and adapt when web3 throws you a curveball so we're still building the infrastructure layer of web3 in the next decade no one will know or care about the foundational protocols we're currently building and discussing and what's happening in the space now will be radically different from what Builders will be doing later on I know that we all want mainstream adoption to happen in 2023 but the truth

is that we're just not ready we still haven't worked out the best way to move tokens between different ecosystems we still haven't figured out the community building Playbook we have no idea which Tech Will Rise To The Top so if you're here now it's the perfect time to experiment and build your web 3 knowledge you have a front row seat where you can learn from the wins and failures of everyone in the space if you've been in this space for a while keep building and don't let bear markets get you down and if you're brand new keep these lessons in mind and have a killer 2023 opportunities are everywhere in web 3. thanks friends for listening I hope you enjoyed this episode if you did please give us a follow or subscribe on Apple podcast Spotify YouTube wherever

you are and feel free to give us a review as well and if you're not already give us a follow on Twitter I'm Kyle reedhead or you can follow web3 Academy with an underscore at the end we'd love to hear from you we'd love to hear what you think of the podcast so feel free to give us a shout out on Twitter and let us know your thoughts friends thanks so much for listening and I wish you all the best and I'll see you in the next episode thank you for listening to web3 Academy we hope this helps you along your web3 journey if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on

account of what we say you probably we will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one