Web3 Market - Forecasts from 2023 to 2028

The Web3 market was valued at US$3.243 billion in 2021.

Web3 refers to the next evolution of the internet, characterized by a decentralized and user-centric approach. Unlike the traditional Web2, where centralized entities control data and user interactions, Web3 utilizes blockchain technology and smart contracts to empower users with greater ownership and control over their data and digital assets. It aims to create a more transparent, secure, and censorship-resistant online ecosystem, enabling peer-to-peer interactions, decentralized applications (dApps), and the emergence of new decentralized finance (DeFi) and non-fungible token (NFT) ecosystems.

Introduction:

The Web3 market is projected to grow at a significant level in the forecast period. The Web3 market refers to the growing ecosystem of decentralized technologies and applications that leverage blockchain and other decentralized protocols to create a new, more user-centric and transparent internet. This market encompasses various sectors, including decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized applications (dApps), digital identity, decentralized storage, and more. As Web3 technologies continue to evolve and gain adoption, they offer innovative solutions, empowering users with greater control over their data, enabling peer-to-peer interactions, and disrupting traditional centralized systems, leading to new opportunities and challenges in the digital landscape.

Drivers:

• Decentralization and Ownership: Web3 offers users greater ownership and control over their data and digital assets through blockchain-based systems. This increased autonomy appeals to individuals and organizations seeking to have more say and control over their online activities, leading to higher adoption of Web3 solutions.
• Transparency and Trust: Blockchain technology provides a transparent and immutable ledger of transactions, promoting trust among users and eliminating the need for intermediaries. This trust factor drives the adoption of Web3 solutions, particularly in sectors like finance, where transparency is crucial for user confidence.
• DeFi and Financial Inclusion: Decentralized Finance (DeFi) applications offer financial services without the need for traditional financial institutions, providing access to financial products and services to unbanked and underbanked populations worldwide. The promise of financial inclusion is a powerful driver for the growth of the Web3 market.
• Non-Fungible Tokens (NFTs): NFTs have gained popularity as unique digital assets representing ownership of digital content, art, and collectibles. The ability to tokenize and authenticate digital assets on the blockchain creates new opportunities for creators, collectors, and investors, driving the NFT market within Web3.
• Interoperability and Cross-Chain Solutions: As the Web3 ecosystem expands, interoperability between different blockchains becomes essential. Projects that enable seamless interactions between various blockchain networks and applications contribute to the growth of the Web3 market.
• Decentralized Applications (dApps): Web3 enables the development and deployment of dApps that run on decentralized networks, offering enhanced security, transparency, and censorship resistance. The demand for dApps across various industries, such as gaming, finance, and supply chain, fuels the Web3 market.
• Digital Identity and Privacy: Web3 solutions provide users with self-sovereign digital identities, allowing them to control access to their personal information. The rising concern about data privacy and security prompts individuals and businesses to seek Web3 solutions that prioritize data protection.
• Censorship Resistance: The decentralized nature of Web3 applications ensures resistance to censorship and government control, making it appealing to individuals and organizations in regions with restricted internet access or oppressive regimes.
• Tokenization and Crowdfunding: Web3 enables tokenization of assets, making it easier for businesses and projects to raise funds through Initial Coin Offerings (ICOs) or Security Token Offerings (STOs). This democratization of fundraising and investment opportunities fosters innovation and attracts investors to the Web3 market.
• Environmental Concerns: Web3 projects are increasingly focused on sustainability and energy efficiency. Some blockchains are exploring more eco-friendly consensus mechanisms to address concerns about the environmental impact of traditional proof-of-work systems, attracting environmentally conscious users to the Web3 market.

Products offered by key companies:

• Algorand launched a new product called Algorand Carbon Offset. This product allows users to offset their carbon emissions by purchasing carbon credits that are generated by Algorand's carbon offsetting program. The program supports projects that are reducing greenhouse gas emissions, such as planting trees and investing in renewable energy.
• Hedera Hashgraph launched a new product called Hedera Sustainability Initiative. This initiative is a collaboration between Hedera and a number of other organizations to promote the development of sustainable Web3 solutions.
• Tezos launched a new product called Tezos Energy Use Dashboard. This dashboard provides users with information about the energy usage of the Tezos blockchain. The dashboard shows how much energy is being used by the blockchain, as well as the sources of that energy.

Positive growth in the decentralized finance (DeFi) segment:

The decentralized finance (DeFi) segment of the Web3 market is anticipated to experience rapid positive growth. DeFi applications offer financial services without the need for traditional intermediaries, providing users with lending, borrowing, staking, and yield farming opportunities. The appeal of higher returns, increased financial inclusion, and the ability to participate in global financial markets without intermediaries has driven a surge in DeFi adoption. Moreover, the continuous development of innovative DeFi protocols and the expansion of tokenized assets within the DeFi ecosystem further contribute to its rapid growth.

The Asia Pacific region is expected to hold a significant share of Web3 market:

The Asia Pacific region is expected to dominate the Web3 market share due to several factors. With a large and growing population of over 4.5 billion, the region presents a vast user base for Web3 applications. Additionally, governments in countries like China, Japan, and South Korea are increasingly supportive of blockchain technology and Web3, creating a favourable environment for development and adoption. The region also benefits from strong venture capital investment in Web3 startups, accelerating the growth of innovative projects. Overall, these factors position the Asia Pacific region as a leading market for Web3 during the forecast period.

Key developments:

• In March 2023 Near Protocol released a new Web3-focused blockchain operating system that improved user experience by creating a shared layer for finding open web resources. It allowed seamless interaction between different blockchains and applications and empowered developers to build decentralized and reusable frontends. Near Protocol's growth in key indicators made it an attractive option in the Web3 market.
• In Feb 2023, Fujitsu launched the "Fujitsu Web3 Acceleration Platform," offering a developmental environment and service APIs based on blockchain and high-performance computing technologies. The platform aims to support the co-creation of Web3 applications and services, enabling secure data distribution and utilization with blockchain.

Key Segment:

By Type

• Semantic Web
• Artificial Intelligence
• 3D Graphics
• Others

By Application

• Cryptocurrency
• Conversational AI
• Data and Transaction Storage
• Payments
• Others

By Industry Vertical

• IT & Telecom
• BFSI
• Media & Entertainment
• E-commerce & Retail
• Healthcare & Pharmaceuticals
• Others

By Geography

• North America
• United States
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• United Kingdom
• Germany
• France
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• Japan
• China
• India
• South Korea
• Indonesia
• Thailand
• Others