The Myth of Web3's Infrastructure Phase

Most web3 builders and investors I’ve spoken to recently believe that mainstream adoption is still being held back by lack of infrastructure. The sentiment is that we need better wallets, alt L1s, rollups, rollups on rollups, multi-chain bridges, web3-native growth tools, etc.

But the biggest problem most infrastructure teams face is that there aren’t enough consumer teams building great apps on top.

Five years ago (!), Dani Grant and Nick Grossman of USV observed this phenomena in their post “The Myth of the Infrastructure Phase”:

“A common narrative in the web3 community is that we are in an infrastructure phase and the right thing to be working on right now is building out that infrastructure: better base chains, better interchain interoperability, better clients, wallets and browsers. The rationale is: first we need tools that make it easy to build and use apps that run on blockchains, and once we have those tools, then we can get started building those apps.

But when we talk to founders who are building infrastructure, we keep hearing that the biggest challenge for them is to get developers to build apps on top.”

The common view is that new computing platforms start with a discrete infrastructure phase, followed by an ecosystem of apps. However, the reality is that new computing platforms start with killer apps that inform the type of infrastructure that needs to be built. This then kicks off the “apps <> infrastructure cycle”.

I believe this framework explains the current tension between web3 consumer products and infrastructure. We need way more teams building at the consumer layer to help inform what infrastructure needs to be built and actually have people use it. Sure, better onboarding and cheaper transaction fees will enable new consumer products. But the existing infrastructure we have today should be enough to build compelling products and experiences.

For example, traditional consumer brands have shown it’s possible to build for millions of people through experiments like Reddit Collectibles and Nike .SWOOSH. Meanwhile, SoRare and Immortal Game have gained traction by taking existing products (fantasy sports and chess) and layering in web3 elements to offer a unique value prop (ownership of in-game assets).

But the reality is that over the last few years, the fastest growing web3 consumer products were primarily driven by speculation. This includes exchanges, NFT marketplaces, wallets, games, and NFT projects. However, this phase is over (due to rising interest rates and other macro forces). Speculation isn’t always a bad thing. In fact, it’s usually needed to help generate the interest and investment required to invest in new technologies.

But the future of web3 consumer will require building compelling products and experiences (radical idea, I know). Over time, most people won’t be aware that they’re interacting with blockchains or tokens. They may just refer to the web3 elements as digital collectibles, points, badges, membership cards, or any number of other more consumer-friendly terms.

For example, here are a few products and experiences I’m excited about over the next couple years:

  • Games with millions of players collecting and trading in-game assets that are NFTs

  • Web3 brands and creators building communities with millions of NFT holders

  • Web3 IP proliferating culture through media and entertainment

  • Community-owned record labels that produce the next generation of top artists

  • Web2 brands building fun, novel, and game-like experiences powered by NFTs

  • Physical items with NFC chips that can be scanned to unlock digital experiences

New infrastructure will definitely help make these experiences simpler, more scalable, and cost effective. But the future of web3 depends on great teams building the products and experiences that consumers will ultimately come to know and love.

I’m building a new type of NFT project + web3 brand with a few awesome people and will be launching this summer. We have open roles across design and engineering so feel free to DM me on Twitter if you’re interested :)

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