Despite the bear market and declining interest in NFTs, Web3 remains a hot topic at SXSW
Web3 is a major theme at SXSW 2023, but previous hype surrounding NFTs and build during the bear market may be contributing factors to Web3 adoption.
Last year, giant bunnies in trendy outfits lined the streets of South by Southwest (SXSW) alongside cartoon characters with rainbows coming out of their mouths. That’s because two non-fungible token (NFT) projects — Doodles and Fluf World — dominated SXSW 2022.
However, these projects were nowhere to be seen at SXSW 2023, indicating a lack of interest in NFTs this year. This isn't surprising, though. With cryptocurrency prices falling, coupled with declining NFT prices and trading volumes, there appear to be few projects focused on digital collectibles. Instead, SXSW 2023 was inundated with major brands and consulting firms touting the promise of Web3.
Brands Discuss Web3 Strategies at SXSW 2023
Avery Akkineni, president of Vayner3, a Web3 consultancy founded by Gary Vaynerchuck, told Cointelegraph that Web3 is moving beyond its novelty moment and into strategic implementation, which is why the technology has become a hot topic among business leaders at this year’s SXSW. She said:
“Web3 technology has the potential to disrupt many industries, from finance to healthcare to social media, by enabling more secure, transparent, and efficient systems. This increased interest in Web3 is critical because it signals a shift toward the next era of the internet, one that is more immersive, personalized, and ownable for users.”
Akkineni added that she thinks every brand should take the time to understand Web3 and develop a strategy. “Brands will leverage Web3 in a variety of ways, from creating community-owned channels to implementing blockchain-based supply chain management systems,” she said.
To put this into perspective, Vayner3 and cryptocurrency exchange Coinbase hosted a brunch during SXSW that included a panel discussion titled “Web3 and the Future of Customer Engagement: How Brands Can Stay Ahead of the Curve.”
Rachel Weiss, vice president of L'Oreal Bold Ventures (L'Oreal's strategic venture fund), said at the panel that Web3 is enabling the beauty industry to "own beauty." She said:
“What does Web3 mean for the new creator economy around beauty? What new forms of expression will be built around beauty using this new technology? What does it feel like to be a fan of a brand? These are the things I think Web3 will empower. It will make what we’ve built on Web2 more powerful in a new way, engaging the next generation of beauty consumers.”
It is worth noting that Bold Ventures recently announced an investment in US startup Digital Village, which helps brands create digital identities and assets in virtual worlds. In addition, L'Oreal's subsidiary NYX Professional Makeup was integrated into The Sandbox last year, using voxel makeup on avatars to increase the concept of consumer ownership.
However, while Weiss expressed excitement about Web3’s potential to transform the beauty industry, Samsung Next head David Lee noted during the discussion that Samsung’s portfolio companies and partners are still waiting for the “ChatGPT moment” to move beyond Web3. He said:
“I think ChatGPT was an interface that people are just now understanding, but that was after years of fundamental research, marketing, and experimentation. I think the same thing is happening now. We’re seeing a lot of experimentation, especially among brands, engaging with Web3. But I don’t think we’ve found that ChatGPT moment yet.”
However, that apparently hasn’t stopped companies from participating in Web3 events. Coinbase, for example, had a presence at SXSW, focusing on its recently launched Wallet-as-a-Service, or WaaS, product.
Leonard Law, WaaS product lead at Coinbase, told Cointelegraph that WaaS is designed to solve one of the key pain points of adoption: wallets. Law noted that it was important for WaaS to be showcased during SXSW due to the large presence of Web3. “WaaS at SXSW is about connecting the right technology with the right brands and helping those brands build strong, direct relationships with their customers,” he said.
Law elaborated that WaaS makes the Web3 wallet onboarding process simple for end users, as a username and password are the only elements required to access Coinbase’s Web3 wallet. “Simple onboarding will reduce the barrier for users to get on-chain, which will open up the Web3 experience to the masses.”
Many of the official SXSW 2023 panels also focus on Web3 initiatives. For example, there was a session called “Building the Open Metaverse,” which included a conversation with Timmu Tõke, CEO and co-founder of Ready Player Me, an avatar platform focused on interoperability.
Following the panel, Tõke told Cointelegraph that the Metaverse is an important part of Web3 because so many people spend time in virtual worlds. He explained that brands are interested in establishing a presence in the Metaverse. “We already see that people are making billions of dollars a year by selling virtual assets in games or virtual worlds. Web3 plays an important role because it enables a range of technologies that allow consumers to finally own their virtual assets,” he said.
NFTs are small but focused
Tõke said that NFTs could play an important role in Web3 platforms to allow consumers to own digital assets. He shared that brands have become cautious about launching NFTs due to the current market conditions: "They don't want to attach their brand to something that is perceived to be declining in value or popularity. We saw this mentality when the market crashed, and many brands told us that they liked the concept of the metaverse, but didn't want to get involved with NFTs."
While this may be the case, Nicole Behnam, founder of marketing agency Beyond Media, told Cointelegraph that while not many people were talking about NFTs at SXSW this year, the community is still gathering due to previous NFT hype cycles:
“Existing NFT communities and collectibles are still hosting events, campaigns, and panels for their holders. We’ve been talking about utility for a while now, and we’re finally starting to see which teams are following through.”
Natasha Hoskins, co-founder of the social decentralized autonomous organization (DAO) Boys Club, told Cointelegraph that the DAO is interested in how Web3 technology can be applied to real-life experiences. She explained that Boys Club has launched both physical and digital NFT products in conjunction with the organization’s magazine, Boys Club Zine.
“The discussion around NFTs has evolved from PFP [profile pictures] to a discussion around practical utility. It’s less flashy and therefore less noticeable in a noisy environment, but this shift is an important one for NFTs to become a reliable integration into everyday applications,” said Hoskins.
Excitement about Web3 despite market conditions
All things considered, it’s notable that Web3 had such a large presence at this year’s SXSW, given current market conditions and the Silicon Valley Bank collapse that occurred on March 10th (the first day of SXSW 2023).
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Tara Fung, co-founder and CEO of Web3 development company Co:Create, told Cointelegraph that the mood at SXSW was low during the first two days:
“Personally, I found it difficult to be present and participate when we were struggling with where the bulk of our operating capital was and whether we could get it back.”
However, Fung noted that the news that Silicon Valley Bank depositors would be protected on March 12 changed the environment at SXSW. “We’re starting to see more of the euphoria and buzz that SXSW is known for,” Fung said.
Regarding the cryptocurrency bear market, Law explained that developers see it as a great opportunity to build: “That’s what continues to drive a lot of the excitement in the space.”
C3 Tip: The views, thoughts and opinions expressed here are the author's own and do not contain investment advice or recommendations. Every investment and transaction involves risk.
