The present Web 3 landscape is an ever-evolving space of new and compatible protocols. Most are set in a completely open digital space and come with blockchain networks that can complete soft and hard forks indefinitely. However, the same features make the process of assessing which projects is simply a copy-paste procedure and which ones hold some long-term potential anything but easy. Because of that, figuring out Web 3 undertakings that might change the way business and pleasure are done in the future metaverse can seem like an impossible task. Yet, that complicated and obscured landscape does not mean that things are completely hidden from sight. Instead, using a combination of defensibility and popularity is a solid first step in trying to gauge what a particular Web 3 project might bring to the table in not just a few months, but a couple of years.
Popularity is easy to disseminate, at least on the surface level, but defeasibility is a much more intricate measure. It essentially stands for a set of factors that mean that a particular project cannot be quickly and easily copied – or forked – into an equally effective competitive venture. Some are also calling the same factor unforkability, which basically means that any Web 3 undertaking can defend itself from competitors. Presently, there is an emerging landscape of these projects, including a wide field that conversely anything from esports to fintech, whose popularity and defensibility offer a solid promise of continued existence.
Collateral and/or Liquidity Capital
The first such option would come in the form of liquidity or collateral in the form of crypto capital. That, in this case, means a range of on-chain assets that help a particular market to operate more efficiently. These are the protocols behind borrow and lend options on digital exchanges, as well as smart contracts that can have their functionality taken to other forked blockchains easily, but their actual liquidity is not that easy to replicate.
For example, Aave, which is the best-known protocol for borrowing and lending, has the most collateral on its blockchain. These include over 11 billion USD in total locked value. Here, users can take out loans and execute other transactions in a very efficient and streamlined manner. Aave has thus a very high level of defensibility in that corner of Web 3 services.
Protocols can also offer liquidity not just in the form of capital, but also in the form of content. LBRY, which is a form of Web 3 video streaming platform, is a marketplace with two sides. It connects, instead of lenders and borrowers, viewers, and content creators. Its unforgettable state lies in the fact that it has that liquidity of content. Others could easily replicate its basic blockchain functionality, but a project like that would still need to convince many content creators to get onto its platform and begin creating content.
While they do that LBRY would continue to do the same, even increasing their drive for user adoption on the account of higher competition. In those eventualities, the competitor projects would be forever in second place, unless they can drastically improve their Web 3 protocol, which again means that they cannot simply fork the existing setup.
Critical Mass Network Participants Protocols
No matter in which era of internet protocols the world might be in, one simple fact always remains the same. Any venture is defined by the number of users it has and the number of interactions they take on with the same platform. Today with Web 3 platforms and bitcoin-enabled payments, the dynamic is still very much the same. That is why all protocols that offer decentralized messaging for example, the potential is huge.
Critical mass protocols offer a kind of scaling potential that sees the blockchain automatically grow with the increase in the number of users. From a technological sense, these are ideal to overcome the problem of growth when the user mass becomes critical for the previous blockchain layer. So far, these have not been seen in that exact form, but they offer a huge promise. Once a critical mass network participant protocol is made, its level of defensibility will be incredibly strong.
Like the definition of any currency, the definition of an asset represents some means of value-holding that can be used directly as a method of payment. In the wider crypto space, there are countless assets, including stablecoins and many more alternatives. These are today so prevalent and regular in the wider crypto space that many take their value for granted.
For example, when someone gets something like a solana USDC, it provides more usefulness to their owner if other merchants accept it as payment or if digital exchanges can take it on and turn it into something else, including fiat currencies. Here, the defeasibility represents the potential of these asset acceptance platforms to provide these services steadily to other apps, parties, and entire ecosystems. Those who can are immediately in a stronger position than others which only provide the promise of the same possibility.
Previous examples show that there truly is a huge level of potential in the crypto and blockchain Web 3 apps and platforms, even though that potential is murky on the account of so many projects having a low level of defeasibility. However, despite frequent forking attempts, some of these will see the light at the end of the current tunnel of confusion and an overabundance of projects with similar goals. Furthermore, there are other forms of defensibility that include soft power elements like brand strength and community.
Both offer means of projecting long-term sustainability that is crucial for potential financial backers and end-users alike. That applies to Web 2 projects as well, back when success came from popularity as much as it did from tech potential. Today, the overall blockchain technology might have changed, but these business principles did not. That is why the coming years will see some projects get backing and users without the necessary tech foundations, while at the same time, great technological setups will come and go, not being able to hold enough sustainable support either from users or investors.