What happened to Web3 startups?

See Molly White's "Web 3 is Going Just Great"[1]

She keeps a tally of all the scams. The total is now over $67 billion.

[1] https://web3isgoinggreat.com/

My friends in Web3 are now AI experts building chatbots

The only cash flows into the ecosystem have been from ICOs. The SEC is cracking down on such activities.

Besides investment cash flow, I don't think there have been any revenue generating ventures that cater to customers outside the Web3 ecosystem.

The true web3 players will be traditional finance companies upgrading their settlement systems.

I am curious how people will answer your second question.

I work fulltime at a Web3 startup & have been for almost 5 years, and we're building a non-custodial smart contract wallet + everything else you need for web3 SDK & a trading card game using web3 tech. the b2b stuff is going great, tons and tons and tons of integrators and devs using our SDKs every day. the sentiment in the gaming world has always been pretty negative towards web3, so nothing feels different now ;)

large multinational brands are dropping nft collabs often right now - adidas, tons of high fashion, etc. & many other other big brands are working on them behind closed doors

i don't think it's going anywhere, and most people are just building out tech and infra

I joined a blockchain startup late 2021, moments before the crypto winter broke out.

I left 15 months later, but they're still going, just did an alpha release.

Because of my work being present on GitHub, I've been contacted by recruiters over email for similar positions several times this year.

I went to two conferences on blockchain and zero-knowledge. Everyone at these conferences seem like serious people working for funded companies, and everyone seems to be okay with there being no customers. It's a little surreal.

It seems that some of the early profit makers in the space are still sinking money into the hope of a future "after the crypto winter" bubble. There is a lot of zero-knowledge hype. Some of the startups that claim to use zero-knowledge cryptography simply aren't.

Based on my LinkedIn inbox… plenty of them still around & still hiring.

They just seem to be less about what was original called “web3” and more about applying crypto to… stuff.

I would imagine most people working for Web3 startups were doing it for the money, and are probably not too surprised that the gravy train hit the buffers eventually.

I was doing a lot of contract work a little over a year ago for about 3-4 different web3 clients. I’m back to working FT at a regular startup. The money isn’t there any more and that’s all that anyone who actually saw what was happening really cared about.

It's a cycle, I was in the last wave in 2018. At some point most developers would realise that chain-scaling issues would prevent profit. They either left to go work for FAANG, or transitioned to working directly on scaling. There are a multitude of grants and other funding from the Ethereum foundation, Gitcoin, DAOs, etc that facilitate a comfortable life for anyone who wants to work on these things.

Nearly all Web3 startups are fully remote, so once the CTO leaves they just sort of collapse of their own accord. CEO is usually a loony.

We're doing fine.

We're in long-term, so scams and hype are something that we try to ignore as we build for practical use cases. But yes, the days of free venture money are over. These are now flowing in the direction of a different two-letter hype.

Source: I am a founder of a web3 startup that has survived a couple of crypto winters.

Some of these scamsters have moved to Web5 https://www.tbd.website/blog/tbd-web5-tech-preview

I’d say that 95% or more is just scam. People like Sam Bankman Fried. They are all gone or dying now more or less. The strong and real businesses with profits and sustainable revenue models are still up and running. There are quite a few examples. Specifically in web3 (within the blockchain and crypto sphere): https://www.coinbase.com/web3/dapps/swappin-gifts is a real world utility web3 dapp. Maybe the first and only one today..

The joke of it is that Web3 claims to be the answer to decentralization... but in every case of Web3 there is some reliance upon a block chain. If the block chain is limited to only the client and not on any server, therefore unnecessary and worthless, it would then be not centralized.

I get the impression nobody takes the time to actually parse the word decentralization. It only means not centralized, but that applies to absolutely everything in the scheme. Somehow people get this confused and for whatever reason believe if anything is not fully centralized then all of it must be fully decentralized.

In order to achieve actual decentralization with online or web technologies consider this incomplete checklist:

* No DNS

* No identity manager

* No shared server. A server is fine so long as you are the only client that can access it as a server or other clients are currently known and prior authenticated (a peer).

* No root certificate or certificate authority or CRL.

* No blockchain

* No shared database or other shared services

Otherwise claims of decentralization are probably just scams to pilfer your data, steal your money, or mine crypto remotely using your hardware. Decentralization is still possible as I have proven it in a personal application of mine, but its very complicated and extremely different from how the web works.

Pivoted to LLM I expect.

Web3 is related to NFTs? Because I feel that NFTs where the most mainstream hype that now is buried below the AI hype. Remember those monkeys?

At the core of Web3 projects is the idea that one can own their identity via cryptographic proof.

Over time, this concept will find its way into many projects. Especialy into open source projects which try to make the web a better place.

For example, as soon as browsers support a DNS based on cryptographic proofs like ENS, other technologies which have URL based identities (like ActivityPub) will automatically support cryptographic identities. Which would bring it to projects like Mastodon and Bluesky automatically.

Still around. Render looks good for the VFX industry as does Helium for broadening 5G reception. Homebase does tokenised real estate that trades immediately for close to nothing since it’s crypto. Lots of payments international payments companies obviously.

Hacker News just generally doesn’t keep up to date because they think crypto is scams. That’s like thinking generative AI is deepfakes.

AI (remember the period a few years back when everything was briefly a chatbot startup? Microsoft Tay era) -> blockchain -> web3 (blockchain renamed) -> metaverse -> AI (LLM era).

It's the circle of hype... There'll be something else along shortly.

(Some of the surviving web3 startups literally seem to have rebranded into LLM startups.)

Anyone who has seen what happened to Multichain lately?

Web3 is getting rid of stupid scams to keep its foundations solid.

In the long run it will benefit everyone.

However we're probably entering the bull season and we'll see a new wave of web3 scam startups soon nevertheless.

still bullish on crypto, space seems dead but serious folks are still building

There are new ones being made every day. Web 3 is just getting started.