The global Web3 market was worth an estimated US$3.2 billion in 2021, and is projected to continue growing. There is likely to be a changing policy landscape for Web3 innovators, and an increased use of decentralized social media. There will be more tokenization of assets, and increasingly mainstream use of blockchain technology, writes SAMANTHA WEINBERG.

There are many ways to define Web3, but fundamentally it is a decentralized internet, owned by builders and users, based on blockchain. The global Web3 market was worth approximately US$3.2 billion in 2021, and this is projected to continue growing in the next decade as adoption of new technologies built on blockchain increase. Some consider this to be the internet of the future; in 2023 it is poised to continue being an important topic in public discourse.

Expected Web3 developments in 2023

The Web3 industry is evolving rapidly. Given what we’ve seen in 2022, here are four areas to keep an eye on in 2023.

1. Changing policy landscape

There has been much discussion of regulation and policy approaches for the Web3 industry throughout 2022. Heading into 2023, it is likely this will continue with more concrete policy taking shape globally. In the US, 2022 was a year for reflection, research, and debate on what Web3 policy could look like. In 2023, it is likely that the outputs from President Biden’s executive order on digital assets and continued advances on crypto legislation in Congress will progress into a clearer policy framework. More countries could also take the example from Japan and launch a dedicated policy office focusing on Web3 to establish more defined policy approaches.

2. Rise of decentralized social media

One of the critical pillars of Web3 is the concept of decentralization – the idea that there won’t be middlemen managing things on the internet as we have now with big tech. This will probably mean a rise in the popularity of decentralized social media in 2023. We are already seeing the beginnings of this play out as users join platforms like Mastodon. While Mastodon is not based on blockchain technology, it is intended to be decentralized and operates on a federated model. This could open the door for other blockchain-based platforms like Lens Protocol or Minds.

3. Increased tokenization of assets

Tokenization can allow for almost any real-world asset to have a digital representation on a blockchain. The increased use of tokenization has the potential to revolutionize financial markets and most industries. 2023 will see continued increases in the use of tokenization, especially as more mainstream players like BlackRock and Goldman Sachs explore its possibilities. This could impact financial markets, but also other sectors with viable assets to digitize like real estate and entertainment as well.

4. Expansion of mainstream use cases

The first three trends highlighted all point to 2023 being a year in which Web3 breaks further into the mainstream. As the technology matures there will be an increasing number of concrete use cases for it beyond those that currently excite early adopters. This will be encouraged by major companies that have already started to explore Web3, such as Starbucks who announced their new NFT-based rewards program Starbucks Odyssey in 2022. In addition to traditional companies incorporating Web3 into their businesses, Web3-native use cases like Helium will also continue to gain traction. 

• Weinberg is Project Specialist, Crypto Impact and Sustainability Accelerator, World Economic Forum.

• Editor’s Note: This article first appeared on the World Economic Forum blog.