Embracing the Web3 Revolution: How Traditional Companies are Taking the Leap from Web2 to Web3
The new iteration of the internet, Web3, which is open, decentralized, incentive-driven, and emphasizes distributed ownership, garners attention from individuals and companies, with big tech firms such as Meta and Microsoft and fashion brands like Nike exploring different ways to integrate it.
The evolution from Web2 to Web3 is happening right before our eyes; both individuals and companies are slowly embracing this new iteration of the internet. Unlike Web2, Web3 is an open, decentralized, and incentive-driven internet that emphasizes on distributed ownership. Participants in this new internet have direct control over the information they share online and can choose to be compensated if their data is used by someone else or an organization.
And while the penetration rate of Web3 is still far from that of Web2, there have been some interesting developments in the recent past. Big tech companies such as Meta and Microsoft have expressed a huge interest in the space, with the former launching the Horizon World metaverse back in 2021. This trend is now catching up with players in other industries as well, most notably, fashion, where Nike is already setting the pace with its NFT sneakers.
So, are these brands following the same approach in integrating Web3? The short answer is no. As we highlight in the next section of this article, Web2 companies joining the metaverse have several options, including tapping into the expertise of Web3 service agencies such as Looking Glass Labs (LGL) or building their own metaverse ecosystems from the ground up.
Traditional Companies Joining the Web3 Revolution
According to a recent report by Mckinsey dubbed ‘Web3 beyond the hype’, this nascent technology presents some real risks, but its applications continue to spring up across several industries. That said, let’s dive right in and see how Web2 companies are positioning their product suites for the era of the decentralized web.
Building Web3 Products from scratch
If you have ever tried to build an application, you probably understand the amount of effort and knowledge required to come up with a market compatible product. In fact, most innovators opt to design on existing open source infrastructures, but that is not always the case. Meta, which rebranded from Facebook, is among the tech companies that have created a metaverse world from the ground up.
The firm’s virtual world Horizon features a social VR realm where users can explore a wide range of activities, including meet-ups with friends, learn about diverse lifestyles or attend virtual social events such as comedy clubs and parties. As per the project’s roadmap, Meta plans to gradually scale the functionality of Horizon Worlds, enabling the participants to customize their own experiences.
On the downside, Meta’s Horizon Worlds is not a decentralized product, users in this platform are gated which means their experiences are limited to a single metaverse ecosystem. This is one area where some Web3 experts have been calling out traditional companies for adopting the ‘hype’ rather than building on the values of permissionless economies.
Partnering with Web3 Brands
Another approach to this new technology is through partnerships with some of the Web3 brands that have already built the base infrastructures for development. On this front, metaverse worlds led by the likes of Decentraland and The Sandbox have been reaping heavy from collaborations with Web2 companies.
Notable Web2 brands that have opted for this approach include Atari, which recently launched a suite of its gaming experiences on The Sandbox metaverse. But more interestingly, companies in the entertainment sector such as Paris Hilton’s 11:11 media are making significant progress in setting up presence on existing virtual worlds.
The Hollywood celebrity already debuted her own metaverse experience ‘Paris Hilton World’, featuring her virtual Malibu mansion on Roblox, and plans to bring the experience on The Sandbox. While most of the companies developing on Web3 platforms are reliant on the underlying infrastructure, this approach is more resourceful than building from scratch.
“For me, the metaverse is somewhere that you can do everything you can do in real life in the digital world,” – Paris Hilton.
Metaverse-oriented Digital Agencies
Similar to outsourcing experienced developers to build an app, traditional companies now have the option of reaching out to Web3 agencies specializing in blockchain infrastructure. While they’re only a handful of such platforms at the moment, metaverse-focused agencies such as LGL are going an extra mile to offer 3D designs for NFT, play-to-earn, and virtual royalty stream architectures.
With this type of support, even traditional companies that have limited tech knowledge can integrate Web3 economies to enhance their user experience or create a borderless market for their products. Think of how SaaS providers are helping companies with software and hardware management in the digital age. Similarly, Web3 infrastructure agencies are emerging to bridge the development and integration gap.
As per the latest statistics from Bankless Times, the global Web3 market was valued at $3.2 billion in 2021, and is expected to hit $81.5 billion by 2030. Evidently, there is huge untapped potential in this new iteration of the internet, but the success in merging with Web2 is largely dependent on how the stakeholders will approach the process. Worth keeping tabs on the developments from Web2 and Web3 companies alike to see what unfolds in the next phase of decentralized innovations.