From the growth of DeFi, NFTs and GameFi fever, crypto world finally reaches the critical mass. This multi-trillion dollar asset class keeps drawing talents from Wall Street, Fintech and finally the old tech giants. While DeFi is transferring the bloated but wildly profitable traditional financial system to the blockchain world, another money-spinning industry, the Internet, is under ‘blockchain’ construction and named Web3.

In order to compete with the most innovative industry in the world, Web3 would better attack in the following Achilles’ Heel of Web2 platforms

• Centralized Network Effects

• High Take Rates

• Data Immobility

• Maltreatment Like Throttling Traffic on Purpose

Network Effect is defined as the phenomenon where every new user make the product/service more valuable to every other user. Therefore lots of different kinds of network effects which can be read in The Network Effects Bible.

But for the most infamous yet cash-printing platform Twitter, it exploits personal network effects which enables people to maintain a public image by putting their personal identity and reputation at stake. One additional user to those platform represents an additional audience and an additional content creator to all users on the platform.

Creators persistently invest in their painstaking efforts and reputations in order to connect with potential audiences who are willing to pay attention or even money for their contents. Nevertheless, if a creator leaves the platform, he loses all the connections to his fans who would look for the next creator who stays on the platform. In short, platforms like Twitter keep the connections.

• Protocols which allow Creator A’s wallet to send contents (in terms of writing, videos and podcasts) to their subscribers whose wallets subscribed/approved the receive.

• Protocols allow subscribers to send likes, comments while creators can reply to them. Preferably, those likes and comments are independent on-chain data(new ERC?) so that those proofs of connections can be transferred across platforms.

The main revenue source of Web2 Platforms is high take rates by exploiting their centralized network effects.

The typical take rates by the main web2 platform

• Twitter, Facebook and TikTok - 100%

• Youtube - 50%

• Apple, Google Tax - 30%

• Game Studios - 100%

• Spotify - 30%

Those platforms repels creators since they mostly have to sell their contents bundled with ads and most of profit is taken by tech giants.

However, unicorns of membership platforms like Patreon and Substack which charges 8-12% of creators’ subscription revenue allows audiences to enjoy world-class experiences from creators in terms of writings, videos and podcasts. Note that there is not much room for blockchain solutions to compete at this take rate due to the cost of storage and network.

• Protocol which enable creators to collect subscription fees and in return only subscribers are allowed to see the creations. The protocol charges the fees for the process at low take rate.

Data Immobility prevents users from exporting their creations (in terms of writings and videos) and Proofs of Connection (in terms of likes and comments).

On Twitter, creators cannot exports their videos or Proofs of Connection. When Twitter does its shady things like inserting ads or maltreatment, creators and subscribers have to suffer the above and continue to use the platform.

However, NFT holders can transfer the listing of NFT easily from Openseas to Looksrare. Because Openseas do not own the NFT, its metadata or its previous transactions. Its competitor Looksrare can also download those information and host the listing at a lower take rate. In the end, winner gets markets and users get the benefits from competitions.

• Platforms provide a set of no-code/low-code business tools which host the severs needed for writings, videos and podcast. Preferably, such platforms both use centralized servers for fast access and decentralized storage like Arweave for backup and data portability.

• A new EIP which stores the proof of connections so that all platforms can crawl them and connections remain untouched after the transfer.

Centralized platforms can easily throttling or even ban traffic on purpose due to personal interest involvement. What’s worse, traffic can be sold and platform users have to suffer from those ads. Note that the profit/benefit of those actions does not necessarily go to the platform, instead, to the person in charge of the traffic mostly. Gradually, distrust and dislike of the platform is built up while the person in charge takes away all the benefits.

• Decentralization and PoS solve this problem by giving proportional decision rights to the corresponding interest involvement. The decision making requires not only the balance between the short-term and long-term interest but also huge cost of staking for nodes and maintaining servers.

• Pay most attention to those protocols which provides solutions of simplifying the process to ban illegal contents since it is a key to legal mass adoption.

In conclusion, Web3 means to transfer the power of current Web2 platforms to users in order to rebalance the relationships and redistribute interests. Eventually, Web2 platforms loses the market since the most innovative creators can be equipped with more resources (like money or even support from VC) and hence subscribers come the web3 platform for both better contents and experiences. It is just like TV stations lost control over Youtube and newspapers over Twitter. The shift is inevitable and it starts now.