Guest post by Dusan Stojanovic, Kelly Choo, Frank Desvignes, Fredrik Adolfsson, Beatrice Lion, True Global Ventures General Partners
In 2018, we, at True Global Ventures, went out and communicated 4 megatrends in Web 3. One of them was blockchain gaming/metaverse and we got that one 100% right. Between 2018 and 2022, Companies like Animoca Brands, Dapper Labs, The Sandbox and Decentraland had spectacular growth.
Two other megatrends were blockchain financial services and blockchain infrastructure, which we got partly right and the last one, blockchain and AI, we got wrong.
Five Web3 megatrends for 2023
Like in 2018, 2022 started with a very bullish market but ended in a bear market. The difference being that in 2022, not only was the Web3 market affected but also the entire tech sector. The Web3 market was especially hit during Q2-Q4 of 2022 and even if 2023 has started positively for the first 2 weeks, the real question is what will 2023 look like?
Now, we have again, like in 2018, listened to what is going on in the 15 countries we are covering, across Asia, North America and Europe, to give sharp megatrends which stick out in 2023 !
Our objective is not to get all of them right but to be bold and take some risks on the megatrends and we are confident we will get some of them right.
Trend #1 – Buying secondaries shares in 2022’s Winners is going to be way more attractive in 2023
The companies that emerged as winners in 2022 will grow stronger in 2023. We believe that investing in secondary shares of these later-stage companies, or buying from shareholders who are in distress, gives investors a unique opportunity to find good value. Now is the time to search out these opportunities, to find the companies doing the work today that will help grow the industry tomorrow.
2022’s Web3 winning unicorns are going to be stronger than ever. In every crisis, we see companies dying giving market shares to survivors and winners consolidating the industry by doing M&As with discounted valuation. Unicorns becoming stronger and better prepared for IPOs.
Web3 market leaders will help to sustain the entire ecosystem and as a result, it will form a much stronger community as opposed to Web2 where the market leader takes it all. This is the reason why we see Web3 winners appearing much stronger than the Web2 ones.
Trend #2 – Centralisation is Dead. Decentralisation is more than back!
We believe that 3 decentralisation winners for 2023 are: Self-custody, DeFi and Bitcoin.
Continued uncertainty after the Luna Crash as well as the FTX crash and especially the lack of transparency surrounding both crashes has provoked short term flight to self-custody.
Companies in the hard wallet sector like Ledger and Trezor benefited short term as well as other secure custody solutions with up to 300% growth during Q3.
“Not your keys not your coins” has been a slogan for a long time. We believe that this is not just a short-term trend, but a megatrend for the next 5 years, especially for 2023.
In the long term view, we believe some of the current hard wallets will evolve further in terms of user experience and also that some of them will stay for the foreseeable future for certain clients.
Do we believe that centralised custody can survive? Yes, but it will need to adapt since transparency will be key. Also, technology stemming from self-custody will be adapted and used by centralised custody.
The heart of DeFi is Decentralized Autonomous Organizations (DAOs), protocols and projects like MakerDAO. The investors who have not lost in the Three Arrows Capital (3AC) saga invested through Smart Contract-based solutions with collateral. With collapse of non-transparent, centralized organizations, real DeFi ventures shall shine.
The best use case for blockchain is by no doubt bitcoin. We believe that this oldest use case of decentralisation will be one of the biggest winners during 2023. What we have seen in the beginning of 2023 is just a start with bitcoin gaining ...