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Everyone knows the sales pitch by nowWeb 3.0 is a revolutionary paradigm shift from the centralized, outdated and exploitative models active in legacy finance and Web 2.0.
Yet, despite the principles and common ground shared by Web 3.0’s leading blockchain ecosystems, the nascent industry has become a battleground of sorts where projects operate from independent silos, competing fiercely for market share.
In the Web 3.0 space as it stands today, tribal communities and infighting have dimmed a once-powerful flameone that was kept ablaze in its prime by collaboration and symbiosis.
In order for Web 3.0 to turn the corner and emerge from a suffocating multi-year bear market, the space’s power players must unite in returning to cooperative efforts, win-win relationships, open doors and integrated approaches to driving adoption and the proliferation of Web 3.0 technologies.
Web 3.0shared vision, a shared mission
Web 3.0’s inception was underpinned by a shared missionto disrupt legacy finance and Web 2.0 platforms.
Rather impressively, there have been many success stories that have birthed a user-centric digital world where governance and profits are distributed among network participantsnot monopolized by central entities.
In 2023, there exists a breadth of equitable, transparent and efficient ecosystems that align the interests of all contributing stakeholders.
It’s a beautiful sight to behold, especially considering where Web 3.0 started barely a decade ago.
Nonetheless, Web 3.0’s leading projects and platforms now make up a complex maze of isolated ecosystems.
While each brings unique advantages to the table in the form of scalability strategies, smart contract functionality and governance tools, individual ecosystems largely remain self-serving and focused on incubating internal growth.
The resulting incompatibility has created as many challenges for users as it has financial inefficiencies and security risks for the space as whole.
Liquidity fragmentationhe first cracks in the ice
One of the most tangible, measurable challenges to emerge from Web 3.0’s division has been liquidity fragmentation. Liquidity is the lifeblood that fuels on-chain transactions.
More broadly, liquidity is what keeps Web 3.0 users happy because it allows them to hold onto more of their capital through low fee structures, near-zero slippage and support for large-volume transaction.
While leading Web 3.0 ecosystems have focused exclusively on building up their own DeFi landscapes in isolation, significant chunks of liquidity have become locked up in siloed environments, leading to inefficient markets, poor price points and profit-diminishing slippageall of which spell limited trading opportunities for users.
To overcome interoperability challenges, bridges have been introduced as patchwork solutions.
To make matters worse, more often than not, it’s third parties doing the development work rather than the disparate chains involved.
While bridges have served many users as practicalalbeit inefficient tools to transfer assets between their favorite ecosystems, by and large bridges have proven to be a double-edged sword.
Rather tragically, bridges have become a prime attack vector for hackers, who have identified bridges as Web 3.0’s weakest security link.
Numerous bridge exploits have led to hundred-million dollar losses, doing immense harm to ecosystems, platforms and users.
Apart from security vulnerabilities, bridges also carry inherent risks and limitations.
By requiring users to relinquish control of their assets to intermediaries, bridges often contradict the very essence of decentralization.
The path forwardeplacing competition with collaboration
Before jumping to any conclusions, it’s important to recognize inadequate bridges, shallow liquidity and security exploits for what they aresymptoms of a deeper problem.
The problem is a lack of congruency, a lack of communication and a lack of cooperation among Web 3.0’s leading blockchain ecosystems who see one another as competitors and rivals.
The current state of Web 3.0 underscores the urgency for a shift in mindsetfrom competition to collaboration. It’s not just about DeFi platforms and wallet providers either.
The powerhouse blockchain ecosystems that are headlining the Web 3.0 space need to begin to see one another as allies reinventing a global financial network and even the internet itself.
Such an immense undertaking simply does not allow space for rivalries or insular approaches to growth and development to take form.
In the grand scheme of the plight of Web 3.0, the whole is indeed greater than the sum of its parts.
By fostering collaboration and interoperability, we can create a unified, robust and vibrant Web 3.0 ecosystem that truly fulfills its original mandate.
It’s time for Web 3.0’s leading blockchain ecosystems to embrace the power of synergyhe future of Web 3.0 depends on it.
Alexi Atlas is the founder of the Kinetix DeFi hub. Before founding Kinetix, Alexi served as the head of business development at QuickSwap, where he built out its DEX (decentralized exchange) and launched its in-house ‘perpetual exchange,’ QuickPerps.
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