In the next 20 years, what new business models will be brought about by Web 3.0 based on blockchain technology?

The development of technology will eventually lead to the evolution and change of business.

The huge shift from operator orientation to user orientation is the fundamental difference between Web 1.0 and 2.0. The platform of Web2.0 makes users' choices more diversified, and operators can also accurately recommend or find target users based on user data, and the closed loop is more and more efficient.

And from 2.0 to 3.0 is a leap. Web3.0 based on blockchain technology fundamentally reconstructs the production relationship and organizational form: almost every system has inner assets for internal circulation, and the basic rules followed by the organization guarantee the fairness of execution through technical means. Fair, all participants can still work together efficiently without mutual trust.

01

The Internet has given us a 20-year entrepreneurial window. In the next 20 years, what kind of business model will emerge in such an emerging market that seems to have subverted traditional cognition?

1. The basic business model of Web2.0

Web 2.0 is the era we are experiencing, and its main features are platform and user-oriented. Web2.0 has spawned many super platforms, whether it is Taobao Jingdong, or hungry, or the United States, or the drop, are using the platform to connect different users to reflect the value. Their biggest disruptiveness is to turn traffic into a battleground, where the value is reflected in how much traffic can be attracted and retained, and how the traffic is realized:

Content : text, music, video, these basic forms of content have spawned various industries: novels, self-media, original music, micro-movies, live broadcasts, etc., all of which produce value through the distribution of the Internet;

E-commerce platform : In addition to Amazon, Taobao, Jingdong and other well-known comprehensive e-commerce platform, there are also vertical e-commerce such as Vipshop, Mushroom Street, Dangdang, and the little red book that just emerged… These e-commerce are The typical representative of Web2.0 has greatly improved the convenience and selectivity of shopping, and greatly improved the exposure while reducing the fixed cost of goods;

Open source economy : A technology-sharing platform built by many idealists, including Github, which was acquired by Microsoft for $7.5 billion, can generate $400 billion in annual value. The value that such a community can produce through technical exchanges and collisions is immeasurable;

SaaS (Software as a Service) : SaaS successfully combines software and hardware to separate many software functions from hardware facilities, such as cloud services. A large number of B2B services are now running on the SaaS platform.

Sharing economy : Didi, Uber, Airbnb, etc. The sharing economy is also a brand new business model, the platform provides rental services, but does not own these assets.

Advertising : Digital advertising can be said to be the most important profitable way of many platforms, including foreign Google, Facebook, domestic Baidu, WeChat, today's headlines, all of which collect a large amount of traffic through various methods, and can be used for advertising through data analysis. The publisher accurately finds the user. Google and Facebook accounted for 58% of global digital advertising revenue ($111 billion) in 2018.

From B2B to B2C, from O2O to C2C, although the value of the platform is reflected, there is still a flaw in it. The rules of the platform are formulated by the operator. Once the oligopoly is formed, the platform is likely to use the rules for the benefit. Tilt to yourself.

To put it simply, Web 1.0 is made up of rules by producers, and Web 2.0 is made up of rules by producers and consumers (but the initiative is still in the hands of producers). As a consumer, I hope that there is a platform for setting up rules entirely by my own group. This is the Web 3.0 we will discuss.

Webchain, which is oriented by blockchain technology, uses machine learning and encryption technology to connect personal, enterprise and machine data, and technical means to ensure that established rules can continue to function without human interference, thus creating a new Market and brand new business model.

2, Web3.0 emerging business model

Looking back at Web3.0 over the past 10 years, many new business models have not been replicated or scaled out, and some have just replicated existing and mature models. Since its development, although the feasibility has yet to be verified, many entrepreneurs have already conducted commercial experiments on some possible models.

What we have to do today is to revisit the past and see if there is room for further development of the existing business model. Here are some new business models that have emerged in Web 3.0:

2.1 Issuance of primary assets

2.2 Holding original assets and helping them build an ecosystem

2.3 Natural speculative taxation of native assets

2.4 Payment Token

2.5 Repurchase to destroy Token

2.6 Functional Token

2.1 Issuance of primary assets

02

Bitcoin was the first cryptocurrency to use the traditional model of this blockchain project, and was the first peer-to-peer network to complete Byzantine fault tolerance and complete openness using the workload proof mechanism. The project's intrinsic business model depends on its native assets: Bitcoin, a digital currency with scarcity, paid as a block reward to miners. Similarly, Ethereum, Monero and ZCash have released ETH, XMR, and ZEC, respectively.

A cryptocurrency like Bitcoin, whose internal business model is not so much a business model, is a set of value logic: miners gain bitcoin as a reward through mining, and mining behavior can improve the security of the network, so Bitcoin has gained wider adoption and increased value. The benefits have prompted more miners to join, making network security further improved, and the value has further increased to attract more people to join, so reciprocating.

The degree of success of Bitcoin can't be copied, because there is actually one copy of such an encrypted asset. After that, XMR and ZEC have some innovations in encryption technology, but because there is no extensive recognition of Bitcoin. There is not enough demand for knowing the foundation and its high degree of anonymity, so even though the technology is more advanced, it does not surpass Bitcoin.

However, a number of cryptocurrencies such as Bitcoin are still to be explored in terms of horizontal expansion. For example, as a financial product hedging risk or for large-scale cross-border trade, it is worth exploring.

2.2 Holding original assets and helping them build an ecosystem

03

The purpose of the early establishment of a company around cryptocurrency was simple: to add value to the cryptocurrency it held.

Its business model can be simplified by: increasing the holdings of native assets and helping to build an ecosystem to increase asset value. Blockstream (the company received $21 million in seed round financing in November 2014, led by LinkedIn co-founder and Airbnb board member Red Hoffman, Khosla Ventures, etc.) as Bitcoin Core One of the largest maintainers relies on their R&D and contributions to the Bitcoin ecosystem to create value; likewise, Consensys has thousands of employees as a key infrastructure for the Ethereum ecosystem, with the goal of Owned ETH value added.

Although such a company is perfectly suited to the development of the project, such a business model will not be copied after being monopolized by the first few companies. There are two reasons for this: First, in the early days of the project, the cryptocurrency still has a large appreciation space. At this time, the company and employees' investment will have a considerable return. For Bitcoin, there are hundreds of thousands of times from the first few cents to the highest of $20,000, and if you set up a similar company now, let Bitcoin rise from a few thousand dollars to billions of dollars. It is almost impossible; second, early entry companies will get more chips and resources. In the early days, companies were able to purchase large amounts of cryptocurrency at relatively low prices and recruited outstanding technical staff and project support. As a latecomer, many resources are monopolized, and it is difficult to have the same effect when they have strong strength and a lot of effort.

2.3 Natural speculative taxation of native assets

04

Compared to the former two, the next generation of business models focused on building financial infrastructure for these native assets: exchanges, managed services and derivatives suppliers. The aim is to provide services to users who are interested in speculating on these assets with large price changes.

While companies like Coinbase, Bitstamp, and Bitmex have evolved into billion-dollar companies, they don't have a monopoly, just providing convenience and increasing the value of their underlying network. The openness and non-permission of the blockchain network makes it impossible for companies to lock in monopoly positions by providing “exclusive access,” but their liquidity and branding will create a moat in competition over time.

2.4 Payment Token

05

This business model defines Token as the currency of circulation for payment. It usually establishes the demand market and supply market, and uses the native token on the network as the sole means of payment. The business logic is that the limited token will be expanded due to the market. And appreciation.

The success of this business model is debatable, but one thing is certain: such a model has hampered transactions.

A business model that can be completed with French currency or even BTC and ETH, and a new token appears to be redundant. In the 2017 blockchain boom, similar projects have appeared, but there are no further developments in the past nine months because of the above-mentioned loopholes.

2.5 Repurchase to destroy Token

06

Community, business, and token-issuing projects do not all transfer benefits to token holders, and Binance (BNB) and MakerDAO (MKR) repurchase destruction models used to solve this problem have attracted a lot of attention. . Such projects use their own income (Binance's transaction fee, MakerDAO's stability fee) to repurchase and destroy a certain number of tokens from the secondary market, resulting in a decrease in the total amount of circulation and an increase in the token price.

It is worth mentioning that Arjun Balaji commented on The Block website: Binance's repurchase destruction mechanism is not equivalent to the traditional equity repurchase, because the dividend is not paid, so the earnings per share is still 0.

2.6 Functional Token

07

This business model is mainly for the end of the network to provide services. For example, Augur's REP and KEEP's KEEP Token are good examples. Service providers of this type of network need to purchase a certain amount of tokens as collateral, and if the services provided are true and effective, they will receive a certain amount of tokens as rewards. . This "carrot and stick" model not only better maintains the security of the network and improves the quality of network services, but also predicts the price of the token through the expected future cash flow of the service provider.

Briefly explain this valuation model:

First, on the basis of not considering market volatility, assuming that the ratio of REP holders to Augur network services is unchanged, the total return on investment will increase as users increase, but the return on investment of individuals will decrease accordingly. At this point, each investor can use the estimated future cash flow and discount rate to calculate the current “fair value” of the REP. Under this logic, as long as the “fair value” of REP is higher than its price, more people will invest, and the return on personal investment will continue to fall until it is slightly higher than the benchmark discount rate (because traditional investment returns are stable and legal currency The range of value fluctuations is small, so in the same situation, if there is no slightly higher rate of return, most people will choose the traditional investment channel), and use the current rate of return discount to calculate the present value, you will get the REP valuation.

If all assumptions are used as variables, such as the proportion of services provided, market sentiment fluctuations will directly affect the price of REP, but will eventually be revised to a reasonable valuation.

2.7 New model being explored

Dual Token models: for example, MKR/DAI, SPNK&BOOTY, one token is responsible for volatility, and the other token guarantees a relatively stable price for easy trading.

Governance Token: This type of token can affect issues such as the expenditure of a project or community and the priority of development, and can be valued from the perspective of preventing fork insurance.

Tokenization of securities: Tokens existing assets (stocks, commodities, real estate, etc.), which can be valued based on the value of the underlying assets, and may have a premium due to severability and ease of circulation.

Fees for trading functions: For example, the areas that BloXroute and Aztec protocols are exploring: paying for certain special trading features, such as scalability and anonymity.

Technology Shares: The Starkware team has proposed to use its own technology to invest in some projects in exchange for a certain amount of tokens. This way, you can get more money by establishing more partnerships.

UX/UI Vendors: These vendors develop user interfaces (UIs) for a number of protocols and improve the user experience (UX) by charging relevant development fees and commissions for project promotion, such as Veil & Guesser and Balance based on Augur as MakerDAO The services provided.

Specific network services: This type of model includes but is not limited to lending services (eg Stake.us), CDP managers (starting global clearing when CDP is at greater risk) and market management services such as OB1 serving OpenBazzar, charging service fees and sales commissions .

Liquidity providers: This model of revenue is only derived from the provision of high liquidity. For example, Uniswap is an automated market maker that provides liquidity for trading pairs.

Although there is still room for traditional venture capital, as the new business model of Web 3.0 is constantly being explored, the role of investors and capital itself is changing: capital itself becomes a native asset in the network and is endowed with Specific role. From passive network participation to post-investment management of financial investments (such as development work or liquidity provision) to subjective empowerment networks (such as governance or CDP risk assessment). In Web 3.0, investors need to reposition themselves to accommodate this new organizational model that can be driven autonomously with minimal trust.

08

Looking back, we found that Web 1.0 and Web 2.0 have also experimented with finding the right business model, and the successful model has created today's technology giants. Similarly, Web 3.0 may have to go through the same difficult iterative process, but once we find a qualified business model, their potential will be enormous: in an environment of minimal trust, individuals and businesses will be able to be in a new architecture. Interact on, without relying on the intermediary structure.

Today, there are thousands of very talented teams that are driving the implementation of some of these models, or innovative business models. Since the model may not conform to the traditional framework, investors will have to adapt to these changes by playing a new role and providing assistance and capital. But because the execution risk is decreasing every day during the project's advancement, we have reason to double our investment once we have a model with predictable and reasonable value growth.

(Finish)

Original link:

Https://medium.com/fabric-ventures/which-new-business-models-will-be-unleashed-by-web-3-0-4e67c17dbd10

Author: Max Mersch

Translation: Eric

Reference:

Https://medium.com/fabric-ventures/an-entrepreneurial-investors-take-on-the-utility-of-tokens-beyond-payment-ccef1d5bb376

Https://orange.xyz/p/345

Https://staked.us/