Quick Takes 2023 Trends: 'Is Web3 dead?'

What is Web3?

Web3 is the term used to refer to the decentralized web, which is an evolution of the current web that is powered by blockchain technology. It provides users with a more secure, efficient, and transparent way to access and interact with content, services, and applications online. It is a platform that allows developers to create and deploy applications, websites, and services that are powered by blockchain technology. The confusing part in most media is that the term Web3 can mean any or all crypto tokens, blockchain applications and infrastructure, and NFTs.

Is Web3 dead?

Web3 hype is dead but Web3 itself is far from dead. The price of tokens and NFT collectibles may continue to fall which will reduce the amount we read and hear about the sector, but teams will continue to focus on building blockchain applications and developing nonspeculative use cases for NFTs.

Why are we confident in this prediction?

This is not the first time Web3 fell out of favor. The last crypto winter was a period of extended bearish market conditions and low investor sentiment in the crypto industry, which began in early 2018 and lasted until late 2020. During this time, the prices of tokens and NFTs dropped significantly, while the amount of venture capital invested in the sector decreased dramatically. This was also a period of increased regulatory scrutiny, as governments around the world began to take a closer look at the industry. Many projects struggled to survive during this period, and the overall sentiment toward the industry was quite negative. Despite this, many projects were able to survive and continue to develop new technologies and applications.

What are examples of companies that emerged during the last Web3 downturn?

Dapper Labs, the company behind CryptoKitties, was founded in 2018 with the mission of making blockchain technology accessible to everyone. The company launched the world’s first NFT and blockchain-based game, CryptoKitties, in 2017 and since then has grown to become a leader in blockchain gaming and entertainment.

Dapper Labs has since launched a variety of blockchain-based games and applications, including Cheeze Wizards, NBA Top Shot, and Flow, a custom blockchain built to power games and applications.

Dapper Labs has raised over $300 million in venture capital and has partnered with some of the biggest names in the entertainment and gaming industries, including Warner Music Group, Ubisoft, and the NBA.

What do you think will happen with Web3 this year? Let us know by replying to this email.

Profile: Chinmay Patel of Percs

What is Percs?

Percs is the Hubspot for Web3. They are helping marketers move from a Web2 world to a Web3 world by helping them solve their largest problems: targeting customers, communicating with customers, and retaining customers.

What did Chinmay do prior to Percs?

Chinmay has 15 years of technical background. This started off when he was in school and he received course credit for coding for free for Mozilla. This gave him the confidence that he could take over any technical challenge at the early stage of his career. Since then, he has worked at startups, agencies, and at enterprises. He has started 3 companies and has successfully exited from 2 of those.

What was the inspiration for Percs?

Percs came out of an agency that he founded in late 2015 to help enterprise clients like RBC & Deloitte with highly technical tasks. One of Chinmay's friends asked for help with Solidity. Chinmay, who was unaware of crypto before, became fascinated with Ethereum. Then went down the crypto rabbit hole and within 12 months the dev shop was focused solely on crypto projects.

By early 2020 the team was tired of doing projects and wanted to take a break from client work. Luckily, the team was close to Shopify and they had many discussions about how large brands wanted to use NFTs. Shopify and Percs worked together to close some big brands together. The team decided that instead of doing projects they would work with customers to build a product. The first few clients included brands such as Budweiser, Playboy, and Superplastic. From these projects, the initial thesis of Percs was developed.

NFTs and Wallets would emerge as a digital identity that replaces email due to privacy and ownership concerns. The entire digital marketing landscape will change from targeting to messaging to attribution. This is a massive opportunity with 100m active wallets representing at least 50m plus potential customers.

How has Percs evolved?

Everything Percs does is to help companies acquire customers. Here's how their products can help:

• Identify new ways to target and acquire customers

• How can they help their customers lower their customer acquisition costs?

• How can they help their customers increase the lifetime value of customers?

As such, they enable customers the following:

• Enable customers to offer NFTs via Shopify store

• Tokengate their Shopify store

• Offer the same ability through other websites / storefronts

• Degen deals site that allows web3 customers to reach wallets

• Metagraphics insights into customers based on non-traditional demographics. This allows marketers to target users on actual blockchain behaviours and transactions

How did he meet his co-founders?

Each co-founder met Chinmay in a different part of his life:

• One worked with him on the Mozilla project and at TeamBuy

• One was his technical superior at TeamBuy

• Another he knew since he was born; He is Chinmay's elder brother.

• The last co-founder he met via the crypto community. She launched the first bitcoin ETF in Canada.

Biggest surprises since launching Percs?

Positive: They knew they could raise money but the caliber of investors that invested in the company was surprising.

Negative: The politics at clients and how it impacts Percs.

What will happen during the current Web3 winter?

Every brand wants to get into crypto but over the last 10 years, it wasn't clear if they should be issuing a token/security or building something more fundamental. NFTs provided a way to get into crypto by selling collectibles. The next phase is building utility and skills to market via Web3. The next 12 months will be about billing. In 10 years, the market will be 10x what it was in 2021.

What is Chinmay's proudest accomplishment outside of Percs?

He built the attachment reminder for Mozilla Thunderbird. The amount of positive customer feedback he received was incredible.

We asked Chinmay: "What advice do you wish you had been given prior to launching Percs?"

"You can't be in charge of both product and customer development. It creates a bottleneck for the company and leads to not having enough time with customers. I should have spent time building strong and deep relationships with their initial customers."

What are the Canadian Web3 companies people should know about? (According to Chinmay)

• Horizon Games

• Ledn

• WonderFI/Coinsquare

• WealthSimple 

• Atomic Finance

New Podcast: Founders & Funding with Helcim and Information Venture Partners

On this episode of Founders and Funding, Jane Podbelskaya of Information Venture Partners, and Nic Beique of Helcim sat down with Alex Norman to have a candid conversation about the funding process, what it was like working together and how they created a successful working relationship. LISTEN HERE

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Top Headlines and Content

• Benny Giang of CryptoKitties presents: A Year in the Life - WATCH HERE

• Dieter Shirley of CryptoKitties presents: Why Blockchain Matters - WATCH HERE

• READ MORE: Canadian Web3 Landscape, The Top 100 Web3 Companies to Watch

• Fintech is back? Nesto announces an $80m round led by Power Corp company IGM Financial while Plooto announces a $20m USD round led by American investor Centana Growth Partners.

• READ MORE: An interesting post by Mark Suser on how the rise in valuations changed the tech ecosystem.

• Mr. Beast's business and what it means for the future of consumer brands: READ HERE

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Why is this cool? Top Hat is used and adored by over 500 Universities and over a million students worldwide. As they set their sights on increasing the adoption of our products to all 4000+ post-secondary institutions in North America, they’re looking for a Lead Software Development Engineer in Test (SDET) to guide and scale our Test Platform Team. APPLY HERE

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Why is this cool? Lighthouse Labs is looking to welcome a new Sr. Website Manager, to help scale our next stage of growth as we expand into new products and markets with a growing portfolio of solutions. As one of the most community-focused and mission-driven professional education companies in Canada, they rely on their relationships with the community, partners, and customers to fuel their success. They embrace an entrepreneurial culture that encourages creative input from every discipline and all levels of the company. APPLY HERE

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