a16z – Web3, Ethereum, Innovation: A Report on the State of the Crypto Market

The current state of the cryptocurrency market is leading to pessimism among many investors. With howls at the end of time inversely proportional to the number of years spent in this very young ecosystem. Because the situation is tense, but certainly not catastrophic given the current evolution of this digital economy. With prospects as bountiful as Web3, an Ethereum network transition and innovations galore. An inventory drawn up in the very first report of the venture capital structure a16z. And of course there are still great opportunities to come.

The current period is panic in the cryptocurrency market, just like elsewhere. With on the one hand those who lose money resell at the lowest in fashion sell panic† And on the other hand, more patient – ​​or experienced – investors waiting for the right time to top up before heading back up. Because the balance depends on the unit of measurement we apply to our personal blinkers. And of course, not everyone is preparing wreaths for an upcoming Bitcoin funeral.

look the many evolutions that are still changing the face of this ecosystem, even buried at the bottom of the current hole† With some historic failures before they are even completed, as in the case of the Terra (LUNA) project collapse. And faced with this, many blockchains have decided to play opportunistic movers in an effort to restore promising projects. Because those who build or invest with millions know that, this is just the beginning of this adventure† A certainty according to the recent report of the a16z construction.

a16z – State of the crypto market

Andreessen Horowitz (a16z) venture capital structure is a must in the cryptocurrency industry. Because it has been investing billions of dollars in everything related to this ecosystem for almost a decade. To the point that it has become one of the main obstacles – at least theoretically – to the creation of a supposedly decentralized Web3. Particularly in the area of ​​DeFi, based on a community principle that is difficult to sustain in the face of such concentration of decision-making power. And the birth of “protocol politicians” who are far too ubiquitous to be cryptologically correct.

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A finding that does not detract from her undeniable expertise in this developing digital economy. With the latest initiative, written a first-ever report on the current state of the cryptocurrency market. The latter to the attention of “anyone who wants to understand the evolution of the Internet and where we are moving towards a decentralized alternative. † With particular emphasis on “makers and other builders. †

Markets are seasonal and crypto is no exception. Summers give way to the cold of winter and winter thaws into the heat of summer. The progress the builders have made during the dark days sparks new optimism when the dust settles. And with the recent market decline, we are probably entering a period like this.

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What will Web3’s successes be?

In this report, different areas are covered, divided into 5 different categories. First of all, an assessment of the current situation that goes against the flow of the palpable panic in the cryptocurrency market. And this remarkable difference that places industry prices as a “leading performance indicator” while in more traditional industries they are often the opposite.

Numbers stimulate interest, which leads to ideas and activities, which in turn leads to innovation. We call this feedback loop “the price innovation cycle” and it is the engine that has propelled the industry through several different waves since Bitcoin’s inception in 2009.

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Because, as this report explains, many internet founders turned away from this technology during the “dotcom crash of the early 2000s.” By missing out on the “best opportunities of the decade” such as the cloud, social networks or streaming† And this simple question: “what are the equivalent successes in web3?” †

A Web3 linked to the real world

Once these foundations have been laid, the research can really begin. With initial an analysis of Web3 and its decentralized development. The latter was at a Web2 with “exorbitant prices” sometimes approaching 100%. And this very explicit quote from US Congresswoman Ritchie Torres to support this point. “You know something is seriously wrong with our economy when BigTechs have a higher turnout than the Mafia. † With royalties paid to the creators by open sea platform estimated at $3.9 billion for 2021† While they represent less than 1% of Meta revenue, or 4 times less over the same period.

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All this supported by practical applications that touch the real world. And more specifically, population groups that do not have access to reliable banking services. Aves cryptocurrencies whose “financial inclusion” feature is certainly no longer demonstrable in developing countries. And the emergence of ‘investor clubs’ such as DAOs, which make it possible to organize financing operations independently of all third-party structures. Because “cryptocurrencies are much more than a simple financial innovation – it is a social, cultural and technological innovation. †

Ethereum – a double-edged sword

Finally, comes the case of the Ethereum network. The latest in full mutation to a Proof of Stake version, the effective implementation of which declines every time the end seems to be approaching. And network costs that many users ended up fleeing from versions presented as more economical. But at the price, still hard to estimate, of a marked downward revision of decentralization. And results not necessarily at the rendezvous given the promises shown.

The popularity of Ethereum is also a double-edged sword. Since Ethereum has always favored decentralization over scalability, other blockchains have been able to enter and attract users with promises of better performance and lower costs. (Some do this at the expense of security.)

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And despite this, the Ethereum network still remains the undisputed leader of these Money Lego blockchains of the digital economy. With an ever-present community. And a number of active developers (4000/month) much higher than its direct competitors, such as Solana (1000) or for comparison, Bitcoin (500). And a notoriety associated in this report with the exorbitant amount of fees users are willing to pay to use the protocols. Of a bill estimated at an average of $15 million a day

All this makes it possible to make quite a positive assessment of the cryptocurrency sector. With an innovation that is still in its infancy. And a number of users of this Web3 that could exceed a billion by 2031, “if the trendlines continue. † The conclusion is this statement taken from the report of the a16z construction:

In other words, you are still ahead. There is still much to do. Let’s keep building.

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