a16z reiterates an optimistic paper on Web3 comparing it to the early days of the Internet.

Leading cryptocurrency VC firm Andreessen Horowitz (a16z) has released a report that provides an annual overview of the current trends and status of the crypto industry. This report reiterates the company’s optimistic view of Web3, anticipating long-term growth ahead of the sector, and weighing on Ethereum’s claimed dominant position among Layer 1 blockchains.

“Web3 is fairer”

a16z summarized the report with a few observations centered on the state of Web3 and Ethereum. The VC mogul saw the recent sell-off in the market as a possible sign of a seasonal downturn, arguing that crypto-based Web3 could be one of the best opportunities of the decade.

The company claims that Web3 offers a much fairer economic term than Web2 giants like Meta. According to the data, royalties paid to creators from the first sale of Ethereum-based NFTs and the second sale of OpenSea in 2021 totaled $3.9 billion in total. This is 4x what Meta will reward creators by 2022.

YouTube and Spotify paid creators $15 billion and $7 billion respectively in 2021, but according to the report, each artist on Spotify and each channel on YouTube received only $636 and $2.47 respectively. On the other hand, the NFT collection was classified as Web3 creators, and there were a total of 22,400 Web3 creators, and “web3 paid $174,000 per creator,” he said.

In addition to acknowledging DeFi as a disruptor to the traditional financial industry, a16z identifies blockchain projects such as Flowcarbon, Helium and Spruce as strong candidates to address critical real-world problems by leveraging the strengths of DLT in privacy, transparency and decentralization. I did.

Ethereum still dominates, but faces challenges.

Another notable factor highlighted in the report is that Ethereum is ahead of other Layer 1 blockchains such as Solana, Fantom, etc. With nearly 4,000 monthly active developers, the second-largest blockchain by market cap has the most builders than the underlying blockchain. A competitor Solana with only about 1,000.

However, the report notes that Ethereum’s emphasis on decentralization over scaling has made other networks more attractive to users, with its lure for lower fees and better performance.

“It is still too early.

a16z compared Web3 to early commercial use of the Internet, analyzing its current user size of between 7 and 50 million. It is stated as follows:

“The Internet had reached 1 billion users by 2005. Coincidentally, that was when web2 began to form amid the establishment of future giants like Facebook and YouTube.”

Seeing blockchain as a “hit product” like PCs and broadband in the 90s and 2000s, and mobile phones in the last decade, the company predicted that there would be “multiple winners” in the competition.

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