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Although over the past 2 years we have heard so much about web2 vs web3, the majority of consumers aren’t actually familiar with the differences and our current status in between the two, in “web2.5”. Web2 has been defined as “the second stage of development of the World Wide Web, characterized especially by the change from static web pages to dynamic or user-generated content and the growth of social media.” Web3 on the other hand is the next iteration of the World Wide Web which is characterized by major concepts such as digital ownership, blockchain, interoperability, and decentralization. The current state of the World Wide Web is somewhere in between these two ideas, leading those around the industry to refer to it as “Web2.5”.
Web2.5 NFTs
NFTs in principle are naturally a web3 concept, given their role in digital ownership and decentralization. With that being said, consumers are more skeptical of NFTs than ever which has resulted in many corporations employing web2.5 styles in their NFT endeavors. While many aspects of NFTs are very advantageous to consumers, the term NFT is particularly concerning given the recent “crypto winter”, where NFT trading volume and prices are significantly down from their all-time highs in the end of 2021.
One example of this is the recent NFT project from Starbucks, called Odyssey, which “will offer members the ability to earn and buy digital collectible stamps (NFTs) that will unlock access to new, immersive coffee experiences”. What makes this project a web2.5 project is a fact that the collectibles will only be accessible through the native Starbucks platform, lacking the interoperability and decentralization that is meant to be standard in NFTs. Given these key differences, it is tough for consumers to tell that NFT technology is at play in this project, which Starbucks is using to its advantage. Although many users will adopt the NFT project as it replaces the traditional Starbucks loyalty rewards program, many of these consumers will not even be aware that NFTs are involved, protecting them from any NFT-related criticism.
Another great example of a company embracing the idea of web2.5 is Apple. Apple, a longtime critic of NFTs, has recently changed its standpoint stating that “Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring. Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app.” These limits set by Apple create an environment in which NFTs are centralized and controlled, going against the original idea of decentralization. In addition to this, Apple will be taking 30% of all NFT transactions, again proving a lack of decentralization.
Web2.5 Metaverse
The concept of a metaverse has been around for decades, with people often citing platforms such as Second Life and Sims as the first metaverses, and more recent popular metaverse platforms including Minecraft, Roblox, and Fortnite. Based on recent user data, these platforms, all of which happen to be web2, are currently the most popular by far. The reason for this is not only a lack of web3 adoption to date but more importantly an issue of content. As more and more brands seek to get involved with the metaverse, it does not take much research to figure out which metaverses are performing the best, leading most brands to host their activations in traditional, web2 metaverses.
Somewhere between the classic metaverses and the new, totally decentralized ones fall Meta. Meta has created a metaverse that operates very similarly to a classic metaverse with a blend of user-generated content and Meta-created games/environments, and also allows for NFT sales. Unfortunately, Meta will take 40% of all NFT purchases on their platform, creating a clearly non-decentralized ecosystem, very similar to Apple’s plan.
The leaders of the truly decentralized metaverse platforms are Sandbox and Decentraland, which have offered been very innovative and revolutionary with the development of their virtual worlds yet have failed immensely to attract users at scale. While the technology of these metaverses is a breakthrough, the current content of both is heavily lacking. Not only are there simply not enough users on the platforms to make it enjoyable, but there is no content that rivals that of the web2 metaverses. The games, environments, and other forms of media are stale and dry, something that platforms such as Minecraft, Fortnite, and Roblox are certainly not dealing with.
Now, industry players are trying to focus on how to get consumers to interact with web3 metaverses, and the answer remains the same: content. This has sparked the rise of a few new platforms, most notably Helix. The Helix metaverse is entirely decentralized with every single asset represented by an NFT that can be bought, sold, and traded by the users. On top of this, Helix has created an immersive virtual world that is a 1:1 scale to New York City and features high-quality graphics and content similar to the world’s top video games. This virtual world far more closely represents what many users imagined of the metaverse, especially fans of media such as Ready Player One, a famous 2018 film depicting the future of gaming and virtual reality. Will new metaverses such as Helix solve the content problem that is prohibiting web3 metaverse adoption?
EIS Insights
- The jump from web2 to web3 is quite large, the web2.5 period could be extensive as people slowly understand what web3 really means and slowly get onboarded to the idea of decentralization
- NFTs still have immense value as a token of digital ownership, but it is tough to break past the negative stigma that they have developed. Thus, web2.5 is actually an important part of the Segway, as without it the jump would be too radical.
- While the metaverse is a web3 idea, we are still stuck using web2 platforms but this is not a product of consumers’ anti-web3 sentiment, it is more of a content issue. Content will remain the main driver of adoption.
