Web3 Adoption Faces Challenges Amid Market Dynamics

Web3,
the
next
iteration
of
the
internet
emphasizing
decentralization
and
blockchain
technology,
has
made
significant
strides
in
innovation
and
adoption.
However,
it
still
operates
on
a
much
smaller
scale
compared
to
its
predecessor,
Web2,
according
to
Binance
Research.

Current
Adoption
Metrics

Despite
its
potential,
Web3’s
adoption
metrics
reveal
a
stark
contrast
with
Web2.
Active
on-chain
users
represent
less
than
1%
of
the
global
population,
and
the
average
retention
rate
for
Web3
networks
stands
at
5.4%.
In
comparison,
67.1%
of
the
global
population
uses
the
internet,
with
Web2
retention
rates
significantly
higher,
ranging
between
25-40%.

Market
Trends
and
Challenges

Two
major
market
trends
are
affecting
Web3
adoption
and
retention.
Firstly,
excessive
speculation,
particularly
around
meme
coins,
results
in
temporary
demand
and
short-lived
engagement.
Secondly,
the
strong
investor
focus
on
infrastructure
projects
has
overshadowed
the
development
of
consumer-facing
decentralized
applications
(dApps),
which
are
essential
for
driving
long-term
adoption
among
everyday
users.

Importance
of
Consumer-Focused
dApps

The
creation
of
dApps
that
offer
real
utility
to
everyday
users
is
crucial
for
scaling
Web3
and
improving
retention
rates.
Consumer-focused
Web3
dApps,
especially
those
centered
on
speculation,
social
interaction,
or
gaming,
have
shown
significant
promise
in
attracting
active
users.
This
is
evidenced
by
the
growth
in
unique
active
wallets
(UAWs)
over
the
past
year.

Expanding
Distribution
Channels

For
Web3
to
achieve
broader
market
reach,
it
is
vital
to
expand
the
presence
of
dApps
across
various
distribution
channels,
particularly
as
overlaps
with
Web2
ecosystems
become
more
prevalent.
Leveraging
existing
platforms
like
Telegram
or
creating
shortcuts
to
the
blockchain,
such
as
Blinks,
can
significantly
boost
exposure
and
capitalize
on
the
extensive
network
effects
of
Web2
users.

Mobile
Accessibility

Currently,
fewer
than
10%
of
leading
Web3
dApps
offer
native
mobile
experiences.
Given
the
increasing
dominance
of
mobile
internet
traffic,
enabling
mobile
accessibility
is
crucial
for
engaging
users
where
they
are
most
active.

For
more
detailed
insights,
the
full
report
is
available
on

Binance
Research.

Image
source:
Shutterstock