Since the term web3 was first coined, everyone’s wanted to know the answer to this question. But it’s not just about being different – it’s also about being better.
I’ve always been fascinated with the potential business models that can be developed through web3. DAOs (Decentralised Autonomous Organisations, if you’re new to this) are already changing the whole way that businesses are conceived and run. The framework is as flexible as you want it to be. Change the way you solve a problem. Change the incentives. Even change how decisions are made.
At Sensand, we’re in the process of building a carbon trading platform that’s rolling out gradually over the coming months. It’s going to be listing new and existing Digital Carbon Assets, both regulated and voluntary, from around the world. But we’re going much further than a regular carbon exchange, linking all the data that happens in the nature-based markets into listed credits – so that every credit is backed by a swath of reliable, up-to-the-minute information demonstrating its origins, its ownership, and its true carbon impacts.
None of this would be possible without web3.
A business revolution
For me, being able to explore and create new business models is by far the biggest difference between web2 and web3. The potential of web3 – commercially, sustainably, even ethically – is incomparable to anything that’s come before.
As more DAOs are created, people will find themselves belonging to many. It won’t always be possible for members to be across every aspect to the degree that they can cast an informed vote. But that’s the beauty of DAOs. Because they have no central leadership and are managed by their members, decisions get made from the bottom up – and you only have to vote on proposals that concern you.
At a recent Australian DeFi Meetup co-hosted by Sensand, Kyall Walker, the GM of Upside Dao, suggested that you can have two tiers of involvement in a DAO. The first is strategic, relating to “our constitution, what we stand for, how we conduct ourselves, what we are allowed to do as an entity, such as specific investment decisions or treasury management”. Kyall sees every member voting on that. The second tier is a ‘subDAO’ – a smaller, specialised working group that’s empowered to make decisions, within certain parameters, on behalf of the DAO.
Basically no one wants to vote on things they don’t have an educated viewpoint on. So being able to structure your members’ voting makes better use of everyone’s time and input.
In the good old days, CeFi (Centralised Finance) offered financial transfers through multiple third parties. The merchant’s bank, the credit card, the purchaser’s bank – each took their piece of the pie in terms of transaction fees and the like. For most service providers, these extra costs just became a part of doing business online.
But with the DeFi capabilities of web3, transfers are increasingly direct – and controls stay in the hands of the users. It’s a more straightforward approach. Remember, transferability equals transactions and vice versa, and that applies whether they’re for currency, intellectual property, or anything else.
Read, write and own
On his seminal blog, Blockchain Explained, James Beck writes: “web1 is read only, web2 is read-write, and web3 is read-write-own.”
It’s true that web3 offers ownership as we’ve never had before. Ownership of our databases, our devices, our peer-to-peer networks. People are connecting with more things like music and fitness with tokens equating to downloads, workouts, or virtual gym gear. You can get even closer to a mosh pit experience online, because your NFTs have put you front and centre at the gig streamed live. The same is true of financial events, insurance, and ‘web3 lifestyle apps’ like StepN – which gives you NFTs for being active. This is where web3 can make sense to the mainstream. This is where it starts to speak everyone’s language.
The bottom line is that whatever we have now, it has the potential to be improved with web3. It really is an opportunity, as a community, to look at all the things we’re doing online and just do them better.
Ownership also lends itself to introducing third parties via shared interests or needs – a bringing together of people or entities that can benefit each other. For some reason, just hinting at advertising in web3 can evoke fear and loathing among the most entrepreneurial, anti-censorship natives. But advertising is neither a good nor bad thing. It’s just there on the table to be considered, like all things web3.
And that brings me back to my first point. web3 enables us all to change business models. It’s the democratising of everything web2. With web3 we have the chance to create our organisations as we choose. To provide value where and how we see it. To deal with each other directly, putting ultimate control of each transfer in the hands of the users.
The true autonomy of the Internet has not been possible until now. These are the differences we can embrace with the many, varied DAOs that we, as a community, have just started to create.