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The third generation of the internet, Web3 is a series of open-source and interconnected applications built on blockchain technology.
Since these apps are decentralized, there is no need for central authorities or intermediaries, so users have more control over their data and assets.
However, Web3 has experienced a lot of turmoil in recent years due to the fraudulent actions of a few players, says Ketan Rahangdale, CEO at Unitea, a mobile and web-based social music community platform.
“While these actions have turned headlines around Web3 negative, this isn’t the full picture,” he says.
“Web3 is still a burgeoning market, and those developing applications that will ultimately provide a positive impact to consumers are doing so at a responsible pace.”
In 2024, there will likely be Web3 applications in such industries as gaming, real estate, music, and wherever consumer-centric tools can benefit from blockchain’s positives, such as decentralization, increased consumer privacy, and native payments, Rahangdale says.
As we head into the new year, here are the top Web3 trends for 2024, according to industry experts:
7 Top Web3 Trends for 2024
7. Truly Decentralized Platforms
Many key players in the metaverse and decentralized finance (a component of Web3) spaces are built upon decentralized blockchains, says Natalie Lederman, a partner at the Sullivan & Worcester law firm.
“Some of the more established and pioneering metaverse and DeFi platforms are continuing to evolve in their decentralization,” she says.
“They’re seeking to set up a system of decentralized governance with all the checks and balances you might hope to see in a fully decentralized application. Consequently, the decision-making and capabilities of the platforms really are shifting into the hands of their users.”
6. Increased Use of Stablecoins
“In the next few years, we will continue to see new Web3 applications pop up across industries,” says Aaron Jacob, vice president and general manager of the enterprise accounting business at TaxBit, a tax and accounting compliance solution provider.
One of those areas is stablecoins, a type of cryptocurrency whose value is tied to another asset that acts as collateral, including fiat currency, such as the U.S. dollar or the euro.
This means that they’re designed to maintain a stable value, unlike other cryptos that can be volatile, Jacob says. Stablecoins are particularly important for enabling decentralized finance applications.
“Stablecoins are gaining traction for a number of reasons, including their use in cross-border payments,” he says. “PayPal is one example of a company that recently launched their own stablecoin.”
Additionally, Stablecoins can help cut the costs and increase the speed of cross-border payments by doing away with the need for intermediaries, according to Jacob.
“For example, JPM Coin [a corporate stablecoin offered by J.P. Morgan] is helping companies move billions in tokenized deposits,” he says.
“I expect to see stablecoins become a much more common means of payment, especially as regulator guidance further enables it.”
5. Enhanced Privacy, Security, Control in Information Exchanges
A number of Web3’s most advanced platforms are starting to outpace traditional messaging platforms by offering more sophisticated user control, privacy, and security in online messaging and other communications, Lederman says.
“By leveraging blockchain technologies, this new generation of messaging platforms is able to offer users end-to-end encryption, which helps users secure and retain ownership and control over their conversations and exchanged information,” she says.
4. Redefining the Fashion Industry
Currently, one of the most significant Web3 trends in digital fashion is the integration of blockchain technology, particularly with non-fungible tokens (NFTs), says Snezhana Paderina, an art director and founder of fashion and technology company Snezhana.NYC.
“NFTs are revolutionizing how we perceive ownership and authenticity in digital fashion, allowing designers and consumers to have unique, verifiable digital assets,” she says.
“This technology is enabling a new marketplace for digital fashion where exclusivity and originality are highly valued.”
Looking toward the future, Paderina says Web3 will continue to merge with immersive technologies, such as augmented and virtual realities, to boost the digital fashion experience.
“We can anticipate virtual fashion shows in fully immersive environments where attendees can interact with designs in ways not possible in the physical world,” she says.
Another future trend is the increased use of smart contracts in digital fashion, automating transactions and royalties and ensuring creators are fairly compensated, Paderina adds.
“And Web3 will likely make digital fashion more accessible and inclusive,” she says. “With the democratization of fashion creation and distribution, independent designers will have a platform to showcase their work without the barriers of traditional fashion industry gatekeepers.”
3. More Innovative GameFi Games
GameFi, which refers to the intersection of gaming and finance, is a new and emerging field that is quickly gaining traction, according to Jacob. These games typically involve players earning rewards in the form of NFTs or cryptos, which they can use to purchase in-game items or cash out for fiat currency.
“GameFi has the potential to disrupt the gaming industry in a number of ways,” he says. “First, it can make games more engaging and immersive for players. Second, it can provide a new source of revenue for game developers. Third, it can open up gaming to a wider audience, including people who have not traditionally been interested in the space.”
As the tech continues to develop, GameFi development companies will likely release more innovative and exciting GameFi games, according to Jacob.
2. New AI-Related Opportunities
In terms of Web3, artificial intelligence (AI) is key to creating experiences customized to users via interaction patterns, preferences, and analyzing data.
“Despite AI’s ranking as a top concern for businesses and individuals, its applications will continue to evolve,” Lederman says.
“Users will collaborate in new ways by making use of extended reality and the metaverse and by promoting different methods for people to engage with one another in and out of commerce.”
The advent of this new technology may result in the elimination of some jobs, but it is likely only a matter of time before we see the creation of new jobs, such as AI system trainers and prompt engineers, and new resulting roles for regulators, she adds.
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1. Tokenization of Traditional Assets
Another area to watch is the tokenization of traditional assets, which refers to the process of converting physical assets, such as equities, bonds, real estate, collectibles, and more, into digital tokens, Jacob says.
Not only does tokenizing these assets make them more liquid and easier to trade it also opens up new possibilities for investment and financial products.
“For example, RedSwan [CRE Marketplace] is tokenizing commercial real estate, making transactions more transparent and instantaneous,” he says.
“This could potentially open up commercial real estate investing to a wider range of investors, who may not have had the same level of access to invest in this asset class before.”
The Bottom Line
The future of Web3 will bring a more democratic application ecosystem built upon transparency where users have creator control and where changing algorithms and content moderation are not left to the whims of profit-minded corporations, says Charles Garrett, engineering and product leader at Pagoda, provider of a Web3 startup platform that enables developers to build, launch, and operate new blockchain-based products and services.
“In 2024, more people will engage with decentralized applications on interconnected blockchain networks, perhaps without even realizing which underlying blockchain is powering their experience,” he says.
