The recent dip in crypto fortunes has prompted many to declare that the web3 experiment has failed, that the speculative optimism of the boom years have predictably proved unsustainable and so it logically follows that the promise of web3 has ended. This seemed to be the opinion of European Central Bank President Christine Lagarde, who in May proclaimed that cryptocurrencies are “worth nothing” - and she’s not alone.
We, however, think that’s a pretty short-sighted view - there are so many reasons to be optimistic about the evolution of web3. As its open values and decentralized infrastructure are adopted to disrupt a wide range of mainstream norms over the coming years, this current downturn will merely be a short blip.
Despite its shortfalls being recently exposed to the delight of skeptics, web3 can’t be criticised for its spirit of innovation, ideals of fairness, transparency and ownership and its tenacity to challenge established, centralized systems - it’s these characteristics that will survive this crisis and form a foundation for the next phase.
In maintaining this optimism for the future of web3, we do admit that there are lessons to be learned from the recent crash… more effective regulation, risk management strategies and less emphasis on speculative motives will build more trust in the vision, and we enthusiastically welcome that change. The introduction of best practice standards will also instil further confidence, preventing for example, the potential for poorly written smart contracts to result in users getting locked out of their assets, as was recently the case when $34 million, or 11,539 eth, was permanently locked into the AkuDreams contract. 😱
There is also the crucial issue of environmental impact, which must be addressed in order to ensure the blockchain model is sustainable. Ethereum’s upcoming move from ‘proof of work’ to ‘proof of stake’ will reduce the energy consumption of transactions by over 90%, an already significant step in response to those voicing understandable environmental concerns.
With this enforced review of the ecosystem, we are entering a potentially more ‘serious’ phase for web3 and an opportunity to re-evaluate what we want it to be. To challenge those that have previously suggested cryptocurrency and blockchain ‘have no use cases’, we as a community need to start demonstrating usefulness.
That’s where the soulbound idea is really interesting. A soulbound token, a digital asset that cannot be sold or transferred to another person, is the ticket to a more meritocratic evolution of the web. When you’re not purely motivated by trading crypto assets, the assumption that web3 is simply a vehicle to gain personal wealth becomes less justified. In the case of soulbound tokens the concept of value still remains, but in a purer and less cynical form, as the value is inherently garnered from your own experiences, contributions and knowledge. Web3 is so much better placed to effectively leverage that value because it is built on the principles of ownership and pseudonymity, preventing corporate entities from potentially exploiting it for their own motives.
The future will be built on these principles, your soulbound identity and therefore your reputation and merits will become your passport to the web3 economy as it continues to meet its potential. It will give you privileged access to opportunities across DeFi, DAOs, the metaverse and potentially beyond as the benefits of web3 are introduced into traditional digital infrastructures and systems.
It’s also fair to say that a distinction should be made so as not to confuse the volatile fortunes of cryptocurrency with the wider vision of web3 as the decentralized future of the internet. Although there will be what many call ‘growing pains’ as the viability of cryptocurrency is tested, beyond these challenges is the simple ideal to bring ownership of the internet back to the users, prevent the walled gardens of web2 and create a new economy with an emphasis on merit. It is these virtues we should be continuously reminded of as confidence wavers.
To summarise, the cryptocrash could and should serve as a watershed moment for web3, it brings the opportunity to review the landscape through a lens of realism, which will lead to the community being forced to address challenges that have previously been glossed over in favour of transient opportunism. It also gives us the opportunity to find and focus on the true potential value and usefulness of web3, with soulbound tokens giving a glimpse into an alternative economy where your merits, values and contributions are your new currency.
Join our mission to recognise your work contributions at Tribz - connect your wallet to check if you’re eligible for Github verified tokens and start building your soulbound profile.