Web3 has a lot of money to spend – well, yes, a little less than a few months ago – but it’s still hard to argue that traditional consumers have lined up to embrace web3’s internet services. There have been some lightning strikes so far, but investors are still looking for consumer use cases that make the most of blockchain, tokens, and NFTs, beyond just trading.
Andreessen Horowitz (a16z) GP Sriram Krishnan believes web3’s incentive structures make space a natural choice for social networks, he told us in the latest episode of the TechCrunch podcast Chain reaction. Krishnan has extensive experience in web 2.0 social networking companies; he was an executive at Twitter, Facebook and Snap before joining a16z, which specifically just debuted his latest $ 4.5 billion crypto fund.
“People ask me, ‘What is the thing that you are spending a lot of time on and that you really care about?’” Says Krishnan. “I think the intersection of social media and web3 is really fascinating.”
While web3 has not yet seen a platform equivalent to Twitter or Facebook take off, Krishnan believes that the structure of blockchain-based platforms provides some compelling incentives to bring creators into their networks, which in turn could bring their audience with them. He notes that some of the most popular existing social media services have indexed the sale of providing content creators with a platform with reach, but that doesn’t necessarily give them the financial advantage of the network itself – something he believes NFTs and tokens could rectify.
“With web3 … the people who add value to the platform now have some of the economic aspects that happen in the platform itself,” says Krishnan. “In some of the social media web3 you may actually have the spiritual equivalent of a seat on the hat table.”
In addition to tokens and other crypto assets, Kirshnan has alluded to mechanisms such as decentralized autonomous organizations (DAOs) that allow stakeholders of a platform or protocol to make decisions about how to mature that project, which he observes as quite alien to ideas. existing on how Big Tech companies interact with their most popular content creators.
“[With web3], now you also have a say in the governance of that platform, which is really very interesting. It opens up a new toolbox and a new dynamic of power between creators and social media platforms, “says Krishnan.
Krishnan says the open nature of protocols operating on web3 means that customers will be more tied to their users’ interests, because users could more easily transfer their resources and content to a new platform if they feel their interests are not represented. – something that somehow reformulates the idea of exporting data from social media services.
“That ‘right of exit’, that right to create alternative customers is one of the social things about web3 that I find really exciting,” he notes.
Web3 social is quite theoretical at the moment, and while some startups have tried to impress, the onboarding issues for users getting wallets, buying tokens, and joining a platform are still much more challenging than experiences on leaner sites like Twitter. Investors are hoping that some of these problems are just growing problems that developers will build in the past, developers that VCs like Krishnan hope they can fund.