Why Web3 Development Is the Next Big Thing in Tech

Original article is posted on The Coinomist Magazine

Web3 is at a crossroads.

From one end, community-focused projects are rallying through the market, taking over investment attention with new approaches.

From another, innovative solutions are gathering capital and shaping the new iteration of blockchain technology.

While both groups synergise, they utilise contrasting approaches for mass adoption. In the end: which takes over?

To find answers to these and many more intriguing questions, Matvii Diadkov, founder and CEO of Bitmedia, shares his expert prospects on Web3 adoption, impact of GameFi, and community-centring tendency in the market.

Introduction: about BitMedia and Web3 development

– How did you find yourself in blockchain development? What caught your attention about Web3?

– I have been in blockchain development since 2013 and, as everyone at the time, I was very inspired by the technology and new approach in finance. It was something really new and exciting, and you just could not ignore it.

I was very impressed by Bitcoin and its technology. The same I can tell you about Web3. This technology goes beyond just financial transactions; it will change our understanding of ownership and data transmission.

– You’ve launched BitMedia — blockchain-development company — in 2014. Back in the day, what were the most difficult challenges to set up an enterprise in a formerly niche sector?

– For us, the most challenging part was to find an audience, because a lot of projects at the time wanted to get customers and users, but the size of the audience was limited. So our main challenge was to find a relevant audience for blockchain projects, which, by the way, is still relevant today.

Usually, there is more demand than supply for the blockchain audience.

– Why does this disruption between supply and demand take place? Is the Web3-community still relatively small, or is it difficult to reach them via traditional promotional channels?

– Yes, it is really relatively small, and we can see it in the example of RobinHood. They combined Web2 and crypto audiences by offering crypto with traditional stock markets, which is more understandable to users.

As for acquisition and promotional channels, indeed, sometimes it’s hard to use traditional methods, because the audience is still narrow. That’s exactly why our ad network is successful in crypto — we learned how to find and aggregate this narrow audience.

– You are a founder of Bitmedia.IO — crypto advertising platform. From this perspective, what distinguishes crypto marketing from the other niches?

The main difference is that all Web3 projects are strongly focused on community. The main marketing approach in Web3 is community management. The community is the most valuable asset for the Web3 projects. A lot of companies in web series are still missing this part and trying to use only traditional Web2 tools and concepts.

– On your opinion, has Web3-sector already come up with its specific marketing tools, or is it just adapting the traditional instruments?

– I would say it’s a combination of traditional instruments and a specific approach. The most specific part is working with the community and utilizing these, let’s say, human resources.

The community does a lot of work regarding promo of the project. Usually, community members are beneficials of project success; they could be token- or NFT-holders, and the success of the projects directly reflects on their own capitalization. That’s why they are incentivized to shield the project, to promote it, to tell other users about its benefits.

The rest, I would say, is pretty traditional: PR, influence marketing, direct advertising and so on.

About community-focused projects

– The GameFi sector has seen a significant market boost with the introduction and rising popularity of TON-based projects. Even crypto exchanges entered the sphere. From the point of your experience, what makes the latest crypto games so overwhelmingly popular?

I would say it’s not the popularity of the games itself — it’s the audience’s expectations of some kind of expected profit. All these games are made very primitive on purpose, so the onboarding of users is trivial. But I wouldn’t say it’s a long-lasting trend.

– Many believe that games are currently acting like a sort of a marketing funnel. Do you agree with this statement? If yes, would you believe that such a method of promotion may transfer to other types of products, i.e. certain dApps or something similarly interactive?

– Yes. In terms of projects like tap-games, a lot of companies found an acquisition channel in this approach. So, basically, they do the same as, for example, Hamster Kombat, but the difference is: they really have some exit strategy, i.e. onboarding users to their platform or listing a community token (in case of exchange or trading platform).

The main idea of this kind of apps is to boost referral programs to encourage users to invite their friends for some benefit, to gather an audience as big as possible, and then to try to monetize or onboard them to a platform.

But this hype is already gone. Now, top games are just selling audiences to each other. But the gamified approach is the right way to go, in my opinion.

– Do you think the simplicity of clicker games could oversimplify the crypto experience, or is that part of their appeal?

– No, I would connect it to the experience actually, because, back in 2014, there were a lot of tools that actually provided free crypto to users (and there still is). Now it’s just another option to make the same thing even without actual crypto, but with a promise of some future airdrop.

– Do you see GameFi clickers evolving to incorporate more complex elements over time, or will simplicity always be the key?

– Yes. I think game mechanics will be more interesting and more complex. They will give players real competition in real gaming experience with the help of crypto and blockchain.

– Undoubtedly, non-fungible tokens (NFTs) have seen better days. Yet they still play an important role in GameFi, specifically in terms of user engagement and tokenization of the in-game collectibles. Could such utility bring back NFT to play? Will they contribute to user adoption?

– Actually, I wouldn’t say NFTs are not in play. They are actively used by a lot of projects, including Web3 games. So yeah, NFTs are here for a long time. It’s a new approach and a new way to manage assets, including in-game ones.

– From the developer’s perspective, how else can NFT be utilised? What are the most realistic and compelling utility scenarios?

– Actually, NFTs already have a lot of utility cases, such as RWA (tokenised Real World Assets — author’s note) ownership, digital identity, digital assets, some automated smart contract logics etc.

It’s not about selling JPEGs — and it never was.

To be more precise: everything in blockchain is just some form of data ownership. The meaning of this data is just our imagination.

We’re working on NFTs in the game industry that will help make games more decentralised and community-owned, but also it could be a good way to do a lot of stuff — both in real world and virtual.

– While some GameFi projects utilise blockchain to deliver a profound in-game economy, others choose the Play2Earn strategy. How important is it for these games to offer real financial incentives? Would you consider the financial aspect the cornerstone of GameFi?

– I would say the financial aspect is a crucial part of GameFi, and it could be implemented using a lot of tools including play-to-earn (P2E), blockchain tokens, NFTs, and other mechanics.

Real financial incentives are important game mechanics in question of entertainment, and this kind of games is building in the whole niche of GameFi.

– From your perspective, can GameFi projects have a fully-fledged adoption without alienating traditional gamers who may be skeptical about crypto?

– In this case, I think the truth is somewhere in the middle. GameFi could become an additional niche or additional type of the game, but it doesn’t mean that all games should become GameFi.

So if you are interested and excited about this kind of entertainment, which includes financial incentives, risks etc. — GameFi is for you, but if you are not, it’s not a problem — the traditional gaming sector is at your service.

– How do you envision GameFi clickers influencing the broader Web3 and blockchain space beyond just gaming?

– I don’t think clickers are some kind of real genre. As you can see now, it’s always that there is a huge decline in clickers popularity, the same as it was in the Hypercasual sector.

I think we will see a lot of Telegram games and a lot of other platforms that will adopt GameFi and play-to-earn in the near future.

About Web3 adoption

– What ‘mass Web3 adoption’ stands for to you?

– Good question. I think mass adoption will mean usage of this (Web3) technology in daily life and even in government sectors. For example, digital property ownership and much more.

Games in this case is, I would say, a polygon for testing and adopting all these technologies is virtual life.

– To bring up crypto games once more, there’s an opinion concluding that they facilitate the adoption of decentralized apps (dApps). Would you agree that GameFi can help onboard users into broader Web3 spaces?

– That’s exactly what I am talking about. A lot of people do not take games seriously, but it’s a very important environment for testing and adopting a lot of technologies, including Web3. Nowadays, we can’t even distinguish whether a game simulates reality or reality simulates games. So Web3 adoption will rely on the game environment, for sure.

– How are dApps adapting to mobile-first users who may be unfamiliar with crypto technology?

Let’s be honest: a lot of users came into this industry for some free stuff. These users actually have financial incentive, and it will be the case for a long time. So, if a user wants to get some benefits from crypto, they need to adopt it and learn somehow.

The entrance barrier will be lower as the tech is adopting more and more mass users. The more users get into this industry, the merrier value the industry can generate, thus it can give more free stuff for users to join the industry. It’s simple.

– Can you think of a simpler way to onboard an unfamiliar user in crypto?

– I think games are a very native and convenient way for onboarding.

To start using crypto, people should solve and understand some of the problems crypto solves — lack of transparency, overregulated financial institutions, and total governmental control on finance, censorship etc. If the users don’t seek to solve these problems (maybe they don’t realise ones), it would be difficult to offer them a solution.

Games, from the other point, don’t solve any problems — they offer entertainment. And people like to be entertained.

That’s a good way to teach them how to use crypto. As a parent, I can confirm that it’s the best way to teach someone, ha-ha.

– Apart from entertainment, DeFi has also been making big steps towards adoption. Mainly — with crypto entering retail payments, as ensured by Revolut or WhiteBIT Nova. Is crypto payments really what mass users seek? Are such novelties effective in bringing adoption closer?

– Yes, of course it will reflect on the mass user’s mind and perspective. Technologically, the industry goes years ahead, but mass adoption isn’t about tech — it’s about perception. That’s why it’s important to show crypto abilities to a broad audience with the help of existing tools and concepts.

For example, you have participated in an airdrop, got your token, then reinvested it, traded, swapped to some NFT, sold etc. But when you feel that you can buy a coffee or a new iPhone with all that magic internet money, with just a tap on your phone — this is what really helps get mass adoption to life.

– With the rise of permissioned DeFi, there’s debate about decentralization vs. regulation. What’s your stance, and how does your studio strike the right balance?

That’s a complex question, and my stance is: we have a lot of regulations already.

Usually society chooses between freedom, growth, regulation, and safety (to be honest, safety is not guaranteed in both cases). I think we have not reached the stage of growth yet, but we already have a lot of regulations and restrictions.

What we do is: we try to comply with law and find jurisdictions which are more or less reasonable. Those regulations are often ridiculous, and they make running business almost impossible. Also, they’re not aimed at what they should be aimed at — namely, counteraction to crimes or defending customer’s interests. Usually, they just ruin internal markets and make big players more viable and closer to the government, weakening competition and growth. I can talk long about it, but the long story short — choose your jurisdiction wisely.

– RWA as technology is growing rapidly. Do you think this trend will endure, or it will fade due to lack of implementation? Which sectors hold the most promise in your opinion?

I think this will eventually be a big thing. RWA is not going that fast — not because of lack of technology, but the lack of understanding its benefits and lack of mass education. It’s a matter of time.

Everything starting from government registries, investment tools, fraction ownerships etc. could really benefit from blockchain. With hundreds of cases of private data leaking, hacking of big companies, and obvious vulnerabilities of centralized storage, I think the adoption of RWA is only becoming closer.

– Who will be behind this anticipated ‘mass adoption’ — accessible, community-oriented projects (like the aforementioned GameFi), or cutting-edge technological solutions?

– No one actually needs cutting-edge technologies — people need some use of them. If you take a look at AI: it became very popular, when it started to talk to people and solve human problems, but not because it’s just a brilliant technology. The same is with blockchain.

There could be a really cool and cutting-edge piece of technology, but if it doesn’t do what people want, it won’t work.

Conclusion

– Ultimately, what will prevail in Web3 — technological utility or community-supported projects?

– If we only work in synergy. It’s like asking the automotive industry, which cars will prevail: fast or safe.

People always want everything at once. They don’t want to choose between tech or utility, usability or security. So, in my opinion, there will be sustainable development from both sides. There will be community-supported projects, for sure, but, of course, with cutting-edge technology under the hood.

“Mass Adoption Isn’t About Tech — It’s About Perception.” was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.