Pioneer of crypto-centric VC investments Andreessen Horowitz shared its first annual thesis on core Web3 trends
Eddy Lazzarin, head of protocol design and engineering and partner of legendary VC innovator Andreessen Horowitz, shared the key takeaways from the first annual a16z report on Twitter, Crypto State.
CAGRs up, take rates down: Why is Web2 better than Web3?
According to the report, the Web3 industry is in the middle of its fourth “price-innovation” cycle. It is a mechanism whereby interest in a new idea meets money and results in technical and ideological beakthrough.
During this cycle, several crypto metrics show jaw-dropping compound annual growth rates. For example, while the global crypto market capitalization is growing with a CAGR of 270.9%, startup activity and developer activity are growing with a CAGR of 63% and 69%, respectively.
Web3 ecosystems have already managed to become far more creator-friendly than its Web2 analogs. For instance, flagship NFT marketplace OpenSea charges its clients with 2.5% fees, while major social media platforms’ take rates can be close to 100%.
According to our analysis, web3 paid $174,000 per creator, while Meta paid $0.10 per user, Spotify paid $636 per artist, and YouTube paid $2.47 per channel.
Also, the DeFi segment is already challenging top-tier banks by net volume of assets locked. Should it be compared to banking giants, it is ranked in the top 30.
Yes, we are still very early
Apart from financial services, decentralized start-ups have introduced revolutionary designs in various segments of the industry. Ethereum (ETH) remains the backbone of the smart contract ecosystem in terms of development activity and transaction pressure.
Its importance is amplified by Layer 2 networks: zk-rollups and optimistic rollups are set to push the barriers of Ethereum (ETH) scalability in the near future.
At the same time, when compared to global internet adoption, crypto is still “very early”. In terms of the number of active users, crypto adoption can be compared to that of the Internet from 1995-1996.
