Since its inception, the Web3 market has helped usher in a plethora of unprecedented financial opportunities for all of its stakeholders thanks, in large part, to its ability to allow users to create, monetize, and interact with their target audience in a highly streamlined manner. Statistically speaking, the unique technological and financial proposition put forth by Web3 has resulted in the sector welcoming more and more institutional players over the last 36 months. In fact, during 2022 alone, startups operating in this realm accrued a sizable $7.1 billion worth of funding from investors.
The financial services industry, in particular, is leading the roost when it comes to incorporating Web3 technologies. This is highlighted by the fact that through a better portion of 2021 and 2022, decentralized finance (DeFi) exchanges were processing a daily trade volume of over $10 billion, with this number climbing as high as $25 billion earlier this year. Another indicator of the growing adoption of Web3 in finance is that more than $200 billion worth of loans were distributed via the world’s leading DeFi platforms in 2022.
Why Web 3?
From the outside looking in, Web3 empowers creators to monetize their personally crafted data in numerous ways. Unlike traditional centralized systems, Web3 platforms are distributed in nature, ensuring that creators retain total ownership/rights of their content — all while bypassing the need for any middlemen or intermediaries.
One way through which Web3 allows for this to happen is via the tokenization of assets. To this point, creators can mint digital tokens linked to their work, representing ownership or a share in the asset. These assets can then be sold and traded across different marketplaces, opening up peripheral revenue sources in the process.
Open Campus is a good example of this. The protocol, which is backed by educational behemoth TinyTap, harnesses the power of blockchain tech to tokenize educational content in the form of non-fungible tokens (NFTs). These tokens allow educators to sell their curated data on the open market while allowing them to retain control over their intellectual property (IP).
Also, Web3 helps develop a sense of community among its stakeholders by ensuring that all governance processes — such as voting — are carried out in a transparent manner. Not only that, it can also help facilitate collaboration and co-creation, allowing users to not only work with one another seamlessly but also share profits in a fair, pre-determined fashion (via the use of smart contracts).
The digital landscape is changing. Fast!
Expanding on the subject of data monetization, one project at the helm of this ongoing revolution is Forta, a decentralized monitoring network designed to help detect Web3 threats in real-time. It allows developers to publish “intelligent threat feeds” — as part of its Scam Detector module — in lieu of monetary incentives.
Initially, bots operating on the network were operated largely by popular DeFi protocols or third-party networks (working under grants). However, since the introduction of Forta’s subscription fee model and its Threat Research Initiative (TRi), more and more independent developers have been incentivized to take part in threat detection activities like bot development, exploit analysis, and anomaly detection.
Bot developers now have the opportunity to earn sizable revenue streams since those detection tools that are well maintained and provide high-quality threat infor can potentially draw the attention of paying subscribers — allowing them to accrue earnings that are much higher when compared to traditional bounty/grant payout models.
To put it simply, by making use of such a reward-based framework, Forta is empowering smaller developers to enter the crypto fray, much like how Uber helped drivers across the world to earn money without having to affiliate themselves with one particular cab service.
Another Web3 offering that uses a somewhat similar financial premise is the Lens Protocol. It is an open-source tech stack that allows developers to build social media apps and, through its ‘Collects’ feature, allows users to take control and monetize their work.
Lastly, Sweat Economy is a Web3 platform that allows exercise enthusiasts to convert their daily steps — recorded on their smartphones — into digital tokens. These assets can later be exchanged in lieu of popular digital assets such as USDT, ETH, etc, or redeemed for physical gifts and rewards.
Looking ahead
As the global economy continues to be shaped by decentralized technologies, there is reason to believe that platforms that allow users to monetize their content without any middlemen — who typically take a huge share of the profits — will continue to garner a growing amount of mainstream traction. Therefore, moving ahead, it will be interesting to see how this burgeoning financial paradigm continues to evolve and grow.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
