Build business: An outlook on the Web3 industry during the downtrend

By the end of May, Bitcoin’s (BTC) price had dropped 40%, Ether (ETH) had lost 50% of its value, and the entire crypto market dipped below its $1-trillion capitalization for the first time since January 2021. As we enter a clear bear market trend, it’s essential to focus on what the blockchain industry has always suggested: build.

Bitcoin, Ether and the broader crypto market’s downturn correlate to macroeconomic uncertainty. The uncertainty is driven by rising interest rates coupled with quantitative tightening, resulting in asset price sell-offs across the stock exchange and the crypto market. It’s entirely possible that we can see the repeat of events like the Terra ecosystem’s unwinding, crypto lending service Celsius’ fallout, and the hedge fund Three Arrows Capital’s $400-million liquidation losses.

2022’s market crash to 2018’s crypto winter

The 2018 crypto winter was brought about by negative market sentiment and loss of confidence; however, 2022’s crypto winter is a direct result of macroeconomics. Decentralized finance (DeFi) is down, equities are down and global markets are down. This bear market is not isolated to crypto alone, with leverage unwind simultaneously occurring across several markets.

Venture capitalists and private investors pumped no less than $30 billion into blockchain projects. A third of that amount went to gaming and virtual world projects to lay the foundations of the Web3 metaverse.

As we witness an exodus of talent from Web2 projects, we also anticipate increased growth of Web3 brands, with several brands such as Yuga Labs, The Sandbox and RTFKT already partnering with retail giants, including Adidas, Nike, HSBC, Warner Bros and others. Blockchain-powered decentralized applications (DApp) and DeFi have the potential to lead the Web3 evolution in the future and seize control from a handful of centralized gatekeepers.

This indicates that the transition to Web3 is imminent and dependent on a catalyst to proliferate. A crypto winter can undoubtedly be considered a significant catalyst, as it affords Web3 projects downtime, wherein they can focus on scalability and sustainability.

Crypto winter is not a time to hibernate, but to continue building

During the 2018 crypto winter, we saw a notable rise in several disruptive projects, such as OpenSea and Uniswap. Despite the downward trend, the projects leading the blockchain space were committed to building and enhancing their products.

These projects took years to be successful. In 2021, OpenSea generated $20 billion in nonfungible token (NFT) sales, while Uniswap adoption grew significantly, showcasing the potential of a decentralized financial system. Other examples in DApps, DeFi, NFTs and Web3 games are abundant.

The key to expanding the Web3 community is utility

During the current crypto winter, there’s likely to be more venture capital available to fund new projects, so they may not only survive but thrive during the next big surge. And that’s the key to survival — utility. Projects that offer utility succeed, while those that are fundamentally flawed, over-hyped and non-utilitarian end up failing. A crypto winter, therefore, separates the proverbial wheat from the chaff.

One of the best ways for crypto projects, whether DeFi, GameFi or NFT-related, to transition from Web2 to Web3 is to consider the implication of housing processes on-chain. Not only that but accelerating business growth through cost-cutting is essential. Payment gateways charging inflated fees should be the first to be scrutinized, and it certainly makes sense to consider a viable approach to the intrinsic practice of turning a profit.

Crypto payment solutions that allow crypto on- and off-ramps are helping Web3 firms accelerate their business as the solution enables transactions to happen off-chain, which…