The Ethos of web3
Everyone has their own definition or interpretation of web3. From my conversations, readings, industry groups I participate in, conference networking, and professional exposure — there is not a ton of alignment.
Unfortunately, this muddies the water, creates negative connotations, and pollutes the underlying objectives that this movement is actually about. Bringing together the viewpoints of skeptics as well as “purists”, I believe we can align on the core drivers and ethos of web3: ownership, portability, and transparency.
Let’s start with some assertions of what web3 IS NOT:
web3 is not pure decentralization or anarchy — centralized entities, platforms, and governments are not going away
web3 is not a way to skirt governments and regulation — regulation will come and must be adhered
web3 is not exclusively public, permissionless blockchains — it is not one technology architecture pattern
To some, those statements may appear controversial at first glance. However, take a minute to let it sink in and reflect on how the world works in reality — probably much less controversial. Yes, web3 emerged from the “crypto” or “unregulated” space, but that is akin to most innovation and simply to do with where the most tokenization activity was happening.
Think about it:
- Are traditional companies like Salesforce, Meta, Starbucks fully decentralized companies deploying fully decentralized solutions? On the less traditional side, are Animoca Brands, Yuga Labs, Flamingo DAO, Dapper Labs, etc. fully decentralized? Are only one side’s efforts web3?
- While still nascent, governments around the world are working on regulation (esp. on “NFTs”) that companies must adhere to. Even a16z, arguably the lead web3 investor, is advocating for meaningful policy and regulation. As the market matures, are the majority of organizations going to risk their livelihood, company, income, etc. and not comply?
- Not everything will be built of permissionless blockchains like Ethereum, Solana, or Polygon. Hybrid and permissioned blockchains are just another deployment pattern (e.g., JPM Coin, Everledger Asset Tokenization, Public Mint DeFi, etc.). Different applications and business requirements will require different trust patterns that will dictate different smart contract and token technology choices — does that mean web3 and the tokenization movement do not include these?
Instead of aligning around the more “purist”-led battle cries, let’s align on the key characteristics that define what web3 IS:
Ownership: I can hold and prove that my identity, assets, and objects are mine. Smart contracts and tokens act as a digital representation of ownership, enabling verifiable ownership within and across networks. This is key.
Portability: I can take my assets from one location to another, wherever they are supported. Digital tokens can be moved across companies, games, the metaverse, events, loyalty programs, marketplaces, etc.
Transparency: I can trust in a network’s ability to prove history and provenance. The network or application provides tamper-evident verification on transaction history and activity.
I believe that anyone working in-and-around web3 would agree to these three principles. However, if you’re shocked that I did not include decentralization as a key characteristic, here’s why:
Decentralization is a means-to-an-end. It is not the end goal. Web3 calls for a more open and democratic internet via decentralization — an internet that, at the end, provides real ownership and access to users. Maybe I’m wrong, but I don’t believe the majority of people want to live in a fully decentralized world — hence, not an end goal.
Whether it’s an algo-backed or a regulated stablecoin, a 2D image of an ape or a tokenized component in a supply chain, a soul-bound identity token or a verifiable credential; it’s not about decentralization, but rather it is about ownership, portability, and transparency.
Just like the purist definition of metaverse is not the one the market associates with, the purist definition of web3 is not what the market should associate with. Limiting web3 solutions to full decentralization and permissionless platforms is not realistic, focuses on technology rather than the end user, and creates negative perception around tokenization; thus, hindering the actual goals web3 is trying to achieve. The sooner we get alignment on the core drivers and ethos, the sooner we can instead focus on building token-based solutions that are well designed and truly focus on the business/consumer requirements and needs.
