You couldn't escape the increasing clamour coming from the booming web3 industry in the glare of 2021's record-breaking venture market. I tried, I assure you. Although Yuga Labs closed a $450 million seed round in March, some of that energy persisted into 2022, the rest of the year was very calm.
Yes, venture had a less active year overall in 2022, but the absence of web3 deals struck out in particular because the industry had such a strong start to the year. Maybe investors stayed away from web3 as a whole because of the shocking collapses of token Luna and the second-largest crypto exchange FTX. Did VCs reconsider the category as a result of the sharp fall in consumer interest in NFTs? We made the choice to research.
More than 35 investors were polled by TechCrunch to have a better understanding of how the people writing the checks view web3, and it turns out that the majority not only actively invest in the sector but also have high aspirations for what they see as a potentially game-changing technology's future.
The lack of sustained excitement following the rally in 2021, according to one VC who asked to remain anonymous, may be due to the fact that the technology is still in its infancy and we haven't seen all of its potential applications yet.
They claimed that there was a promising future that was still in its infancy for those who understood the market. "Those who are unfamiliar with the space are aware of this, but they will be less likely to deploy without a firm understanding of the practical uses. The supposed advantages of web3 (decentralisation, pseudonymous identities, zero-knowledge proofs, etc.) have almost ever fully materialised. It reminds me of the early days of the [World Wide Web], when every web page was just plain HTML with crappy visuals and antiquated features.