Web3 for TradBiz — Use cases and value propositions (7 of 14)
Web3 use case categories
Nearly 100 Web3 use cases across eight categories are evolving rapidly to compete with traditional Web2 companies
The most frequently asked question we get about Web3 is probably “What are the use cases where the value propositions of Web3 exceed what is already provided using Web2 and other traditional business models?” While we are still early in the transition to Web3, there is already plenty of evidence that distributed, crypto-based ecosystems can deliver value to users in ways that wasn’t possible before. This chapter describes some of the nearly 100 different use cases across eight categories we’ve identified, providing examples of Web3 ecosystems that are already poised to compete against Web2 and other traditional companies.
We’ve identified nearly 100 Web3 use cases across eight categories. Our database of Web3 use cases, based on more than five years of ongoing research, currently maintains a list of nearly 100 use cases across eight different categories — infrastructure, currencies and transactions, decentralized finance (DeFi), NFTs and asset tokenization, DAOs and DAO enablement, distributed services, enterprise solutions, and consumer-focused utility. Given the rapid rate of Web3 innovation, we expect to refine these categories over time; however, they provide a good starting point for understanding the wide array of use cases being developed and offered today.
Infrastructure use cases include the consensus networks and solutions for building and operating the Web3 stack infrastructure — protocols, enablers, applications, and interfaces. These include blockchain explorers, cross-chain bridges, layer two chains, data oracles, wallets, and many more.
Currencies and transactions are cryptoassets and other solutions enabling the storing and transferring of financial value between people and other entities. Examples include stablecoins linked to fiat currencies like the U.S. dollar, tokens enabling cross-border payments, remittances, and microtransactions, as well as merchant point-of-sale solutions.
Decentralized finance (DeFi) includes a rich set of Web3 native financial solutions that rely on smart contracts rather than third-party intermediaries like traditional banks, securities firms, or insurers. Notable DeFi use cases include asset management, lending and borrowing, decentralized exchanges, derivatives, and insurance. This category also includes hybrid companies integrating aspects of Web3 with Web2 business models, which we refer to as centralized DeFi (CeDeFi) or Web2.5 companies, such as centralized exchanges and crypto banks. Decentralized finance (DeFi) is explored in more detail later in this series.
NFTs and asset tokenization occur when digital or physical assets are converted into tokens to facilitate ownership and exchange. This category covers a broad range of emerging use cases, including the broadly defined non-fungible tokens (NFTs) space, with its own distinct use cases, that is discussed in Non-fungible tokens (NFTs) and the Metaverse chapter.
DAOs and DAO enablement use cases describe the different types of decentralized autonomous organizations (DAOs) along with the tools to manage their operations and engage productively with their members. Specific use cases include community management, analytics, governance, operations management, token services, and treasury management. Decentralized autonomous organizations (DAOs) also have a dedicated chapter in this series.
Distributed services refer to the transformation of Web2 and other existing processes, tools, and systems into distributed solutions. Almost all imaginable Web2 use cases are open for potential disruption in the Web3 space, including distributed AI, data analytics, computing, content distribution, crowdsourcing, data storage, marketing places, networking, registries, and security.
Enterprise solutions enable a broad range of TradBiz functions, processes, and capabilities. These include accounting, advertising, human resource management, market research, product provenance, publishing, loyalty programs, supply chain management, and corporate treasuries.
Finally, consumer-focused utility use cases provide a broad range of services targeted toward consumers that haven’t been covered elsewhere. These include betting and gambling, credit and trust ratings, health and wellness, identity management, online learning, online gaming, and more.
Web3 ecosystems are poised to compete with traditional Web2 companies. There are already many examples of Web3 solutions with rapidly evolving value propositions seeking to displace existing TradBiz models and companies. We’ve included a few here to provide a sense of what is possible as Web3 continues to mature.
For example, while Web2 leaders like AWS, Google, and Dropbox dominate cloud-based data storage today, Web3 protocols such as Filecoin provide alternative models to store and access data across distributed networks in which storage providers are incentivized with tokens. The Ethereum Name Service (ENS) provides domain registry services for names ending in “.eth” that resolve public Ethereum addresses in addition to internet URLs. Protocols like Steemit, Rally, and Chiliz enable content creators to monetize their community using tokens, competing with traditional publishing platforms like YouTube, Medium, and Patreon. Content delivery networks, like THETA, BitTorrent, and Livepeer, similarly incentivize people to host content that is delivered on-demand as users request. The gaming space includes Metaverse, or virtual world, projects such as The Sandbox and Decentraland, as well as a whole new genre of play-to-earn games like Axie Infinity, going up against existing online games such as Fortnite, Roblox, and Minecraft. Cryptoassets like Bitcoin, Dash, and Ripple can be used for payments, providing alternatives to incumbents such as PayPal, Visa, and Western Union. Lending and borrowing platforms have enabled the emerging decentralized finance (DeFi) category, with code-based projects like Compound, Aave, Maker and Yearn providing services previously reserved for financial services institutions. Finally, decentralized exchanges, including Uniswap and Curve, have pioneered automated market maker mechanisms enabling users to exchange tokens without a company-based exchange.
Web3 use cases are plentiful and growing. So, to the skeptics out there, there are indeed many compelling Web3 use cases that already exist, and more are emerging all the time. You now have a sense of the eight broad categories and some of the nearly 100 individual use cases. We also provided some examples of areas where Web3 projects are seeking to compete against, and maybe even displace, TradBiz models and companies. We’re now ready to take a closer look at a few of the more top-of-mind use case categories, starting with Decentralized finance (DeFi).
Monchester Macapagal and Kris Caigas of AcceleratingBiz contributed significantly to the research, writing, and production of this series.
Explore other Web3 for TradBiz insights and resources at acceleratingbiz.com.
Click on the links below to progress through the Web3 for TradBiz series:
[1] Web3 for TradBiz introduction
Web3 and crypto foundations
[2] Why embrace Web3 now
[3] Inevitable Web3 future
[4] Crypto and Web3 basics
[5] Advanced Web3 topics
[6] Using crypto wallets
Use cases and value propositions
[7] Web3 use case categories
[8] Decentralized finance (DeFi)
[9] Non-fungible tokens (NFTs) and the Metaverse
[10] Decentralized autonomous organizations (DAOs)
Web3 implications and opportunities
[11] Web3 impact on TradBiz market and business models
[12] Emerging Web3 investment opportunities
[13] Evidence of mainstream Web3 adoption
