Web3 is much more than digital assets and market speculation. Web3 is a reimagination of what it means to operate online.
Rather than centralized platforms that moderate and tailor content based on what drives traffic to them, Web3 is about decentralization and organic growth within active communities. To many developers in Web3, digital currency is just smart money that is part of a much broader toolkit. With these tools a new form of internet can be built.
And it’s not just lofty ideals; the Web3 industry has been making real waves. Over 18,000 developers are actively working on Web3 projects, and money has flowed in from venture capitalists and tech giants. With more than 195,000 monthly Google searches, interest in Web3 keeps growing.
While this new idea has taken root in developer circles, many companies are reluctant to jump headfirst into Web3. Some are unsure of where to start, while others don’t know why they should.
So, why should you expand your business into the Web3 sphere?
Innovation at the edge
To grow your company, you need talent and drive. Bright minds that can ignite a spark in your whole team to create something new and innovative. A talented employee can be the difference between boom and bust. So how do you reel them in and then keep them hooked? More and more, it seems money isn’t the answer.
A Deloitte study found that while salary is one of the most crucial factors, Gen Z cares less about it than any other generation. And if asked to choose between a well-paying but boring job or a more exciting job with lesser pay, Gen Z is split down the middle.
Millennials also prioritize company culture - the employee experience, innovation, investment in the careers of their staff, and social values. For them, it’s not just about the money; it’s about cutting-edge technology and the chance to build something new with a like-minded community. And for many, they’ve found that in Web3.
The workplace is changing every day. Although more than 44 million “Boomers” are still in the workforce, over 10,000 retire daily. What potential employees value is shifting in tandem with this changing workforce. And it’s not just the younger generations; many veterans of Big Tech and TradFi are leaving to join Web3 startups. People are leaving comfortable jobs with high salaries and considerable bonuses to be part of a new frontier.
Surojit Chatterjee left behind an 11-year career at Google to become Chief Product Officer at Coinbase. Gemini’s Chief Technology Officer, Pravjit Tiwana, joined from his job as General Manager at AWS Wedge Services. 4 developers left Meta to launch a Web3 startup, citing slow adoption of cutting-edge technology and heavy regulatory pressure. OpenSea boasts senior talent from Lyft and Uber. No longer content to be working on iterations of the same old system, talent is flocking to where they can create something new.
This talent migration has raised concerns of a brain drain in traditional finance and Web2 companies. However, companies that can embrace Web3 with open arms and invest in development can entice the younger, more progressive employees who will build the future.
Within this new workforce, a new work ethic is emerging—one of striving to develop and create, regardless of the money involved. We can see this clearly in the current downturn. A common theme in discussions about the current bear market is that "now is the time to build."
Developers in Web3 aren’t focused on the volatile nature of the digital asset market. They’re more concerned about what they’re going to make next. Web3 prides itself on developers who build and people who do, not middle managers who waste time and money. Money talks, but smart money walks.
If you want to stay ahead and avoid a brain drain from your FinTech company, expanding into Web3 is the next logical step.
Follow the smart money
While precognition remains steadfastly in the realms of science fiction and comics, there's one crucial clue that can give us some insight into where we're headed. If you want a sneak peek into the future, you need to look at where the money is going.
Venture capital firms migrating to Web3
Venture capital (VC) firms are rushing into the Web3 space. In 2021, they invested $33 billion into blockchain companies. Of this, $5.8 billion was raised in funding for Web3 and NFT-focused companies. Money is pouring in, and the amount invested in Web3 looks set to grow.
These firms include a16z (Andreessen Horowitz), Coinbase Ventures, Sequoia Capital, Tiger Global, and Bain Capital. a16z announced a $4.5 billion Web3 fund this year while Bain Capital launched a $560 million fund. While naturally, not every startup succeeds, VCs remain optimistic about the future of Web3, even in a bear market. Investing in Web3 has brought outsized returns, instant liquidity, passive income sources, and capital efficiency to their investments.
TradFi & Big Tech dipping their toes in
While Big Tech and TradFi far surpass Web3 in terms of funding and market share, the giants of these industries are adopting Web3 technology and announcing Web3-focused departments every week.
The most noticeable pivot has been Meta, previously known as Facebook. In October 2021, Mark Zuckerburg announced their intention to expand into the metaverse, a digital reality that is part of Web3. Meta also plans to develop NFT and Web3 gaming applications.
The world's largest internet-based company, Alphabet (more commonly known as Google), has been involved in funding rounds that have raised over $1.5 billion for blockchain and Web3 companies. Other notable investors include PayPal, Microsoft, Samsung, and Blackrock. These FinTech and Tech giants clearly see a future in Web3.
Venture capital firms, financial institutions, and tech companies globally are integrating Web3 services into their portfolios. It’s clear they recognize the importance of this growing market and the potential for greater returns than in Web2 and traditional finance.
Community not customers
Web3 companies have gained a reputation for their passionate communities. These communities include developers, customers, entrepreneurs, cypherpunks, and decentralization idealists. Topics are subject to heated discussions unmatched in the Web2 space. Users of Web3 services often feel strongly about the products and platforms they use and aren’t afraid to let you know.
In Web3, advertising is done by your community, not the marketing department. An active and excited community will grow your brand and help you reach new customers. However, this community doesn’t live on traditional social media giants like Facebook or Instagram. While Twitter still has a strong community of Web3 thinkers and developers, many have eschewed social media platforms for chat forums like Telegram and Discord.
Engaging with this community and using it to your advantage is essential. Updates, feedback, AMAs, and responses to queries are all part of the Web3 experience. Collaboration and a feeling of building together is an important aspect of what draws individuals to the Web3 space. Once you’ve developed a community, you’ll find your users will happily tell others about your company. Web3 users want to feel involved, and you’ll reap the rewards if you can do just that.
How to integrate Web3 into your business
So, you're interested in the potential of Web3 and what it can do for your business. Here are some simple tips to make your journey into the world of Web3 smooth and successful:
Use experience and innovation
If you’re already operating in the financial or technology industry, you and your team have years of experience to work with. You’ve seen what works and what doesn’t. This expertise is invaluable when venturing into a new sector. You’ll be able to keep abreast of potential complications and use your wisdom when needed.
However, don’t be afraid to try new things. This is still uncharted territory, and talented individuals are building from the ground up rather than atop existing systems. Something that may not have been suitable in Web2 might find its home in Web3.
To succeed in any business, you need to be flexible and open to new ideas. Web3 is no different. By blending your expertise and experience with the innovative ideas of Web3, you can create the perfect opportunity to grow your business exponentially.
Use the tools already available
You don’t have to go blindly into the world of Web3. Bright minds are already working in the space developing the tools to help businesses transition. When creating a Web3 framework, you don’t have to start from scratch. Several companies offer tools such as APIs (Application Programming Interfaces), custody solutions, NFT (Non-Fungible Token) management tools, and settlement networks.
Here are some great tools to get you started in Web3:
An industry leader in digital asset management, Fireblocks has become a Web3 success story by bridging the gap between TradFi and DeFi. They provide infrastructure for moving, storing, and minting digital assets. They work with over 800 financial institutions and are used by enterprises worldwide to scale digital asset operations.
Stripe is a leading global payment processor that handles both traditional finance and digital asset payments. They’re an easy way to integrate digital asset payments into your business and expand your potential customer base. Stripe creates a range of banking-as-a-service APIs that combine fiat and Web3 payment solutions.
At Blockmate, we provide you with a single API that can be used to provide basic account information of digital asset wallet customers, an aggregated financial view of your customers' assets, and AML/CFT compliance.
With so many talented experts in the space, there are tools to suit a business of any size and scope. Many products can be integrated in a matter of minutes, hours, or days, enabling you to start branching out and growing your business immediately.
Stay ahead of compliance and regulation
While DeFi and Web3 may still seem like the Wild West, the end is nigh. Regulation is coming, and it’s coming fast. Many companies may find themselves in a sticky situation after rushing headfirst in. That’s why it’s essential to do things right from the start.
Complying with regulations from the beginning will make the transition much smoother. Most major exchanges have had to change practices to require new customers to complete KYC (Know Your Customer). Several exchanges also require existing users to complete KYC if they wish to withdraw their funds.
Staying ahead of potential clampdowns on business practices in Web3 will save you time and money in the long run. This can be done smoothly using Blockmate’s AML/CFT compliance solution. Our API automatically analyzes and evaluates the risk of wallets and transactions. It will provide you with a risk score and insights to facilitate decision-making and AML (Anti Money Laundering) compliance from the first step.
Looking at the tax implications and upcoming regulations in this fast-moving industry is also vital. While digital assets are subject to Capital Gains Tax in many countries, each country has specific legislation. It can be helpful to talk to a tax advisor specializing in FinTech or Web3. You’ll need to keep extensive records of transactions which can be accessed and viewed using our API.
Get started today
Blockmate can provide you with the tools you need to easily incorporate Web3 options into your company with minimal hassle and maximum results. We offer a wide range of solutions using a single API and a free and accessible developer toolkit that your team can use to integrate Web3 accounts in a few simple steps. Our easy quick-start guide will get you up and running while being AML compliant at every step.
If you’re interested in what Blockmate can do for you, book a free call today.