Rattibha

The Crypto Endgame

13 Tweets 3 reads May 23, 2022

TL;DR for @a16z State of Crypto 2022
A 🧵 👇
a16z.com
1/

@a16z What is #web3?
- Web 1: 1990-2005, read only, open protocols, decentralized and community governed
- Web 2: 2005-2020, read & write, centralized services
- Web 3: beginning, read & write & own, combination of decentralization in web 1 and functionality of Web 2
2/

@a16z Why #web3 matters?
Web 2 companies grow from attracting users / builders to extracting value from them; grow from cooperate with users / builders to compete with them
Web 3 aligns participants to work for the same goal - growing the network
3/

@a16z Where we are?
Comparing to web 2, web 3 is currently in ~1995 era.
If web 3 follows the pattern of web 2, we might see 1 billion web 3 users by 2031.
4/

@a16z Consistent long-term growth of the overall crypto / web 3 industry
driven by feedback loop
Price going up > attracting interests from builders and users > new ideas > more startup activities > price going up
5/

@a16z L1
- $ETH still dominates - demand for block space is unmatched
- $ETH as the hub and value going out through bridges
- ETH continues to attract the most developers, but there are several emerging ecosystems (e.g. $SOL, $AVAX)
6/

@a16z L2
- Optimistic rollups (most popular) vs ZK rollups (catching up)
- @arbitrum has the largest mkt share among L2s
7/

@a16z @arbitrum DeFi
- Huge population are not served by banks
- DeFi grew from zero to $100B+ in 2 years
- $ETH still dominates DeFi but others are catching up
- DEX and lending protocols are the most common use cases
- By AUM, DeFi industry is the 31st largest US bank
8/

@a16z @arbitrum Stablecoins
- Fiat backed ($USDT $USDC, centralized) vs crypto backed ($DAI, capital inefficient) vs algorithmic ($UST $FRAX, unstable)
- Stablecoin demand has been rising, and is still at its very early stage
9/

@a16z @arbitrum NFT
- NFT is still hot, seeing mainstream adoption
- Web 3 platforms (e.g. OpenSea) has significantly lower take rates and web 2 platforms (appstore, youtube)
- New way for creators to monetize directly with their fans - 22,400 creators generated $3.9B revenue
10/

@a16z @arbitrum Gaming
- 20% of NFT sales volume in 2021 was gaming related; 49% of crypto wallet activities came from games
- Interest in metaverse has exploded - land sales totaling c. $2B
11/

@a16z @arbitrum DAOs
- Another option for community governance and decision making
- $10B+ treasury assets under DAOs management
12/

@a16z @arbitrum That's it!
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