Enterprise Adoption: The Achilles Heel of Web3

Web3, the idea of a decentralized internet built on top of the blockchain technology, revolving heavily around community rather than big corporations and enterprises, has experienced exponential growth since its inception use-case in Bitcoin back in 2009. Many confuse the relationship between Bitcoin and the blockchain technology that underpins it. Whilst Bitcoin is reliant on the blockchain technology to function, the reverse is very much a different story. The use-case of the blockchain technology reaches far beyond pure financial applications.

Fast-forward 15-years later to today, Web3 is thriving with builders, contributors & capital flows. The use-cases for having a decentralised internet and a verifiable truth machine is more pertinent than ever. The rise of Artificial Intelligence, deep-fakes and increasing centralization of big corporations and governments, calls for a counter-balance of decentralization and the truth.

The Smarter Blockchain

The smarter blockchain, pioneered initially by Ethereum back in 2015, promises to elevate Web3 and blockchain technology to a new level. This was a break-through in the then immature space of Web3 as the programmability of smart contracts opened up endless use-cases outside the realm of financial / value transfer which Bitcoin was primarily designed to facilitate.

Since then, there’s been a plethora of innovative ecosystems born based on the foundation of a smart blockchain. Many of these aim to resolve specific problems or shortfalls of Bitcoin and Ethereum, by the method of iterative improvements, as a point of difference. Unfortunately, just like the Dot-com bubble, many did not survive and many more will fall as short-term speculation coupled with low conviction takes its toll.

Despite the falling of many, better ecosystems are created everyday by ambitious builders to further the progress of Web3 adoption. Analysts predict that the Web3 industry is set to grow to a valuation of $177.58b USD by 2033, which constitutes to a CAGR (Compound Annual Growth Rate) of 44.1% between 2024-2033 (source: Market.us).

Decentralization isn’t Always Better

As Web3 reaches peak growth, many cracks started to show. Due to the rapid growth rate, users found out the hard way that corners were cut. Unregulated and unaudited technologies also created an extremely risky environment for assets. Over-leveraged players in the market eventually imploded, casting a negative aura on the whole Web3 industry.

Even though the Web3 industry iterated rapidly on its technology, many security and fundamental issues are not easily resolved due to the decentralized nature of the underlying infrastructure, making bigger improvements cumbersome and time consuming. The primary ethos of Web3 became an obstacle to overcome. But everything comes at a price, and this is the price of decentralization.

The Missing Link

Akin to the Internet and tech stocks in the 90’s, the blockchain technology is still at its infancy. User interfaces are generally primitive, abstraction is almost non-existent and speculation makes up the bulk of capital flows. Large enterprises look at the Web3 industry, and are generally fascinated, yet cautioned association due to its tainted image.

For those enterprises that are more innovative and adventurous, adopting Web3 was anything but easy. It draws very similar parallels to building a functionally rich website in the 90’s; an exercise that exerts a lot of time and money. Even in 2024, this still holds relatively true, although some level of abstraction is starting to take place, making some areas slightly more seamless.

But we are still very far away from the level of maturity that the bulk of enterprises are looking for; the level of seamlessness in integration, interoperability and onboarding that Web2 technologies possess. So then, what is the path that we must walk to narrow the gap between Web2 and Web3 technologies?

Bridging the Gap

A great piece of technology is never stagnant. It is never finished. The race is now on for the Web3 industry to bridge the gap that is hindering the mass adoption of Web3 technologies. In order for enterprise adoption to succeed within Web3, we have 2 large channels that must coexist with each other to achieve optimal outcome:

1. Start-Ups: fostering start-ups by onboarding them early, or leading and supporting them through their Web3 journey. Start-ups today have more potential to be disruptive and aren’t bound by existing restrictions. Back in the Dot-com boom, FAANG was non-existent and these huge tech enterprises today were not born out of old school incumbents at the time. There is an extremely high chance that, for the Web3 industry, a similar trajectory will play out. Web3 start-ups today could become the next FAANGs in the years to come.
2. Web2 Enterprises: known as aggregators of users, Web3 adoption has the potential to exponentially skyrocket with integration of Web2 enterprises that has millions of existing users. The key being how the gap is bridged, to ensure the user experience is not a disruptive, but rather, seamless.

Regardless of whether it’s fostering start-ups, or pulling in existing Web2 enterprises with a large user-base, there are many rough edges that still need to be ironed out for Web3 adoption to be considered streamlined. Some of the big areas that still need maturing are:

• Security: fundamental design flaws at protocol levels with band-aid approach fixes are not easily sustainable long-term. Web3 is no longer the wild-west it once was 5 years ago, and these flaws need a proper fix deployment to eliminate protocol-level exploitation that plagues users today.
• Interoperability: although some work has been done in this area, interoperability between chains are still very much constrained and limited. Bridges that enable some interoperability has also been tainted with frequent security exploitations.
• Decentralization: in order for business, whether start-ups or large enterprises, to work with blockchain technologies, there must be a right balance of decentralization. Achieving absolute decentralization may not be practical, as developments and upgrades may be slow and cumbersome. On the other hand, utilizing a centralized blockchain defeats the purpose of the blockchain technology altogether.
• Abstraction: an overwhelming majority of the enterprise adopters care to understand the underlying technology, but does not want to deal with the complexities when undergoing development and implementation. Web3 technologies today are working towards abstraction on different levels, but this work is still very much at its infancy.

The Way Forward

As many ecosystems rise and fall, MultiversX has stayed its path and remained consistent with its pursuit to be a scalable, secure, efficient and green ecosystem. There are many blockchains that exist today, each with its own unique advantage and thriving ecosystem. However,

The whole is greater than the sum of its parts.

MultiversX, through its relentless pursuit to be unique, built its underlying blockchain technology from the ground up. The “copy, paste, iterate” approach was non-existent, meaning that a lot of the protocol-level flaws that exists today with other blockchains are non-existent with MultiversX.

Although MultiversX continues to pursue its goals at LightSpeed, it has, at its current state, already made considerable traction towards security, decentralization and abstraction, closing in on Web3 industry’s ambition of being enterprise-ready; a chasm that the whole Web3 is yet to cross.

Interoperability and abstraction, arguably 2 of the most difficult areas to improve, also sees light at the end of the tunnel with the introduction of MultiversX’s Sovereign Chains. Enterprises will be able to, based on its business requirements, create its own unique side-chain which inherits full security, interoperability, and decentralization from the main-chain as well as established ecosystems such as EVM and the Bitcoin network. The Sovereign Chain will also be SDK-enabled, marking a level of abstraction unparalleled in the Web3 industry.

Find out how MultiversX and the Sovereign Chains technology can help simplify and bridge the gap towards your Web3 venture.