Blockchain and web3 have found their place in recent years. They have been an avenue for secure and transparent transactions, empowering digital asset ownership, among many other use cases. 

Despite the multitudes of narratives in the space, TGV narrowed its focus to five, which they think will shape the web3 world in 2023.  

TGV is an equity Venture Capital firm that invests in Serial Entrepreneurs in over 20 cities. They are built by a group of serial entrepreneurs with a solid track record of investing their own money and Limited Partners into ventures run by serial entrepreneurs. Portfolio companies leverage Web3 technologies, incorporating blockchain as a competitive advantage to drive change with proven products.

2022 Winners will be more attractive in 2023

TGV has pointed out that the “Web3 winning unicorns are going to be stronger than ever”. While the Web3 industry is in the shadows of web2, it still presents various opportunities. With new use cases emerging which solve existing world issues, innovation will create value, making web3 more attractive than web2 in 2023.

Without a doubt, the rollercoaster ride for web3 last year was a reminder that we are quite not there yet. Instead, a perfect time for developers to keep their heads down and continue building. 

In the journey of making web3 widely adopted, one example cited by TGV was how Animoca brands raised money to prepare for a possible IPO in the near future. (https://www.forbes.com/sites/zinnialee/2022/09/09/animoca-brands-raises-110-million-from-temasek-ggv-and-boyu-capital-as-it-mulls-possible-ipo/?sh=3d1c635f3d16) 

This will “help sustain the entire web3 ecosystem” by taking what worked with web2 companies and applying it in web3. Drawing a comparison to how the big players commonly monopolise the web3 industry, Web3 instead will accomplish this with a much stronger focus on the aspect of the community. 

While it is almost impossible to predict successful projects in 2023, betting on projects with a proven track record in 2022 could increase the chances of success. TGV “believe that investing in secondary shares of these later-stage companies, or buying from shareholders who are in distress, gives investors a unique opportunity to find good value.“

In search of these opportunities, they also believe that “the companies doing the work today will help grow the industry tomorrow.” By accomplishing this, seeing the Web3 winners will likely appear much stronger than the ones proposed by Web2 leaders.

Centralisation is dead, and the era of decentralisation is here

With all the uncertainty the space presents after the LUNA collapse and the fallout of FTX, transparency is the topic on hand on the back of any web3 investor. This has provoked fears among investors and steered new potential ones away. 

It is another reminder that not your keys, not your coins will be “a megatrend for the next five years but especially for 2023.”

Despite trust being broken caused of the centralised entities in web3, the decentralised nature of crypto today presents itself brighter than ever. “With the collapse of non-transparent, centralised organisations, real DeFi ventures shall shine.” 

Within DeFi, DAOs and various decentralised protocols will prevail. One project, MakerDAO, has generated over US$180K per day in interest rate revenue, all without token incentives. 

However, TGV also suggests that the “best use case for blockchain and the oldest one is by no doubt bitcoin.” We see Bitcoin as an alternative to payments in countries of today (EL Salvador) and as digital assets on the balance sheets of tech giants such as Elon Musk’s Tesla and Michael Saylor’s Microstrategy. 

With that in mind, TGV still believes that centralised custody can still survive.“But it will need to adapt since transparency will be key as well as technology stemming from self-custody will also be adapted by centralised custody.”

Security and Privacy, how Consumer demand will accelerate the need for them

Regarding security and privacy, TGV mentioned that the “blockchain was built to give an audit trail for transactions made between parties.” But even with that character trait, the need for companies to prove to consumers that they can meet high security and privacy standards is ever-increasing. 

In Singapore, regulators have driven the need for security and privacy, primarily through new data protection and security legislation. This sentiment is shared across other countries with high cryptocurrency usage, like Vietnam and the Philippines.

In addition, the Monetary Authority of Singapore (MAS) also proposed new crypto regulations for investors, including a risk assessment test, banning leverage trading and borrowing, and restricting offerings as incentives.

Also, Read 3 Proposals you need to know as a crypto investor in Singapore

Open metaverse accelerates to become mainstream

TGV believes that the “Open metaverses, defined as metaverse environments democratised among the user base, generally in the form of blockchain-based tokens, will be mainstream in 2023.”

“Phygital experiences through cultural and entertainment events will also drive mainstream adoption of metaverses.” Examples include cultural verses set up to engage with different communities, such as celebrating Lunar New Year in Hong Kong Mega City or Ramadan in Turkey-Verse, in The Sandbox.  

TGV also referenced how big sporting events in 2022 have helped drive mainstream adoption. World cups and the Superbowl have, in their way, introduced the open metaverse to the world. 

In cities, “South Korea has already started with Metaverse Seoul to launch a virtual replica of the capital city with a goal of improving its public services. Japan’s Kishida also laid out the country’s plans in a policy speech to invest in NFTs and metaverse.”

TGV also added that they “expect to see the start of mass adoption of open metaverses accelerate across 2023 as large corporations, governments, more financial institutions and others invest in developing metaverse strategies to avoid being left behind.”

Decentralised AI in Web3

The era of artificial intelligence has dawned upon us, especially with ChatGPT as an AI storming into the scene, and its success of it is also spilling over into web3. “Decentralized AI in Web3 allowing for the creation of trustless and transparent AI systems that operate on a blockchain” makes the web3 space more efficient concerning tools and applications. 

New use cases which utilise decentralised AI in web3 may be the biggest winners, especially when “some of these projects enable secure and transparent sharing of data and decentralised platforms for AI services,” TGV’s outlook on the decentralised AI scene is nothing short of a sure shot to success. 

While there are many moving parts in ensuring the success of this function, AI still poses a significant upside in opportunities, something TGV will be keeping a close eye on.

[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]

Featured Image Credit: Chaindebrief