Only 8% of people are familiar with Web3 – what has happened?

Key Takeaways

Google search interest in the metaverse is down 92% from its peak, highlighting the fall from grace for the concept
92% of respondents globally said that they have heard of crypto, but only 8% considered themselves to be very familiar with the concept of Web3
Web3 often has trouble defining exactly what it is, with abstract and shifting goals frequently changing with time
Collapse of token economy and pullback in wider crypto space has curtailed enthusiasm
Web3 is not the metaverse, but there are valuable lessons to be had for tokens with regard to lofty goals and abstract descriptions

Lockdowns, stimulus packages, social distancing – the year 2021 could not seem more different when looking back on it today.

The same holds true within crypto. The year saw Bitcoin sail past $68,000, El Salvador declare the orange coin as legal tender, cartoon monkey pictures sold for millions of dollars, and a doggy token by the name of Dogecoin at a valuation of $88 billion.

Among the hysteria, a virtual world was touted more and more as the future. A future world where everybody could work, hang out and more, built on top of blockchain rails. They called it the “metaverse”. The only problem is, that clamour has become a whisper, as data for the search term “metaverse” on Google shows below, which is down 92% from its peak.

Web3 has also pulled back

While the metaverse may be low hanging fruit to target, the more ubiquitous- and somewhat related – concept of Web3 has also struggled to maintain the excitement levels of the pandemic.

Despite lofty predictions that Web3 was on the verge of a parabolic rise, in a recent survey conducted by YouGov and Consensys, the results suggested this was nowhere near. While 92% of respondents globally said that they have heard of crypto, only 8% considered themselves to be very familiar with the concept of Web3.

With so many aware of crypto yet so few familiar with what Web3 is, it may suggest two things. The first, quite simply, is that Web3 has had trouble catching on; the results not delivering on the lofty promises, the protocols struggling to deliver utility amid a declining crypto environment.

The second is a long-running criticism of Web3; namely, it has trouble defining exactly what it is, at least without venturing into an overly abstract realm.

Interestingly, the same survey indicated enthusiasm around solving problems which proponents of Web3 claim it aims to fix. For example:

79% want more control over their identity on the Internet
83% think data privacy is important
67% believe they should own the things they make

For some enthusiasts, this may be optimistic, as it highlights interest in the problems which Web3 aims to solve and an inevitable target market. And yet, in another way, it sums up the exact problem. These issues are extremely broad and vague. In a survey, it is not surprising that the majority say that they believe they should own the things they make, or that data privacy is important.

Just because people are interested in these things does not necessarily mean that Web3 protocols built with the supposed goals of tackling these “problems” will succeed. As we have seen, once token prices fall, the climate shifts rapidly.

Facebook rebranding to Meta sums up struggles

Perhaps there is no better way to sum up the popping of the bubble quite like Facebook’s decision to rebrand as Meta. On last month’s earnings call, CEO Mark Zuckerberg was forced to outline that the company’s determination to focus on the metaverse remains intact.

“We remain fully committed to the Metaverse vision as well,” Zuckerberg said. “We’ve been working on both of these two major priorities (AI and the metaverse) for many years in parallel now, and in many ways the two areas are overlapping and complementary.”

Meta’s metaverse ventures have hurt shareholders. Last year, its Reality Labs unit, in charge of the Metaverse project, lost $13.7 billion. The year before, a further $10.2 billion was lost.

“I can’t guarantee you that I’m going to be right about this bet. I do think that this is the direction that the world is going in,” Zuckerberg added.

Thus far this year, Meta has performed strongly in conjunction with the bouceback in the tech sector. However, the rebound comes after the stock significantly underperformed the Nasdaq, with the underperformance widening after the company’s Meta rebrand in October 2021 (not that it is necessarily indicative, but it is interesting all the same).

Looking back, the timing of Meta’s rebrand was unfortunate. Its public commitment to the metaverse and company name change came on October 28th 2021, only thirteen days before the Bitcoin price peak and the pinnacle of the COVID-driven crypto bonanza.

Of course, the pertinent counterpoint of this is that Meta represents the exact antithesis of what many Web3 believers desire. A dominant big tech company with a questionable history and public image, to say the least. And besides, the metaverse is not Web3 – although this inability to define it in tangible and actionable terms is part of the issue.

Obviously, the entire crypto sector is hurting badly, not just metaverse and Web3 tokens. Bitcoin remains over 55% off its high. The macro environment has been problematic and risk assets have struggled across the board, with interest rates hiked north of 5% following so many years of treading water near zero.

In a more direct comparison, even interest in Bitcoin from the mainstream is down, with search volume for Bitcoin falling to two-year lows. And yet the damage with regard to the metaverse has been worse. Looking at the coins classified as metaverse on CoinMarketCap, the top currencies are all down at least 84%, with an average 92% drop.

It’s been a rough ride for all of crypto. But for metaverse, it has nearly decimated the still-nascent concept. While the metaverse is not Web3, there are many tokens and projects leaning on the promises of the latter while creating nothing of genuine utility. For the projects still around in the space, examining the travails of metaverse coins could be a valuable lesson.

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