Why can't giants make Web3 products?

In July 2021, the Paradigm and Uniswap teams published a DEX mathematical paper TWAMM, which allows the algorithm to automatically execute a matching order within a time T by mathematically eliminating T. When the algorithm was released, the industry was very excited and thought it was a new trading paradigm. The AnchorDAO research team also discussed the optimization and implementation of TWAMM with Dan and Dave of Paradigm, and published a mathematical review. Since then, researchers at Paradigm have published an implementation version of TWAMM [2], but even the algorithm built by Paradigm has not been brought to the market. A thought brought about at that time was, for a new DEX product, are innovative algorithms and product power the key? In fact, TWAMM has a relatively high threshold for understanding and use of market makers, users, and project parties. It is very far away from ordinary users, and runs counter to UNI's earliest idea of "everyone can become a market maker".

web3 was born for the public and should serve the public. With the maturity of DeFi, the threshold for DeFi to the public is getting higher and higher, and it is getting farther and farther away from the public. More mature DeFi did not explode again in 2021 as expected. On the contrary, gamefi, NFT, meme, etc., which are closer to players, brought about this bull market.

The underlying logic of the blockchain, first of all, is inclusiveness, a kind of fairness based on code, and the public is the protagonist. The web3 wave is actually a grassroots-driven movement from the bottom up. The starting point and destination of building web3 products should not leave the public.

One of the technical essences of blockchain lies in the reshaping and optimization of production relations, rather than being driven by product forces. Therefore, the core of web3 has never been technology, algorithm, or product power, but the change of production relations and the transfer of ownership brought about by Token, which is an urgent mission of humanistic care. Through the Token mechanism, the value and control rights are given to users and "Builders", allowing participants to build a world of "no permission", "freedom" and "private property is sacred and inviolable". This is why it is difficult for web2 manufacturers to make products like Uniswap/Axie/Opensea. Because these agreements are not based on product strength, but products driven by web3 culture, and products that have persisted through rounds of difficulties.

When we answer why web2 giants can't make web3 great products, I think "faith" is the biggest reason. This kind of "belief" is not an abstract expression, it is a sense of pride, participation, and excitement in the web3 culture precipitated through time, and it is a concrete sensory expression. The pride is concrete when rewarding unbanked colleagues and peers with cryoto because we know it may give them new hope; when giving out $5 airdrops to Southeast Asian gamefi users who complete tasks overnight , this connection with Southeast Asian players is specific because we know that $5 may be the backbone of their lives; when using crypto to buy artist NFTs, the relief is specific because we know it may be affected by the epidemic Artists' only source of income. It is precisely because of the sense of mission brought by "faith" that we, the holders, can continue to insist on "build" when the price of encryption falls by 90% and then falls by 90%.

Web3 product power in the context of new generation infrastructure: freedom, serving the public
Compared with the infrastructure of web2, web3 is a brand new infrastructure background. If the former is electricity and network, the latter's infrastructure is data and capital liquidity under a new production relationship:

At the data level, the data of the blockchain is open and shared. It is no longer the limited API access of web2, but the data can be connected anywhere, and this data can even be said to be eternal. In terms of capital liquidity, the infrastructure built by DEX is also very mature, and all scenarios can share the liquidity of DEX to help complete transactions. At the same time, with the expansion of DEX's asset pricing power, this also forces more market-making funds to enter the DEX field, deepening the network bandwidth for liquidity.

Under such an infrastructure background, a few people can complete the construction of a project (DeFi/NFT/MeMe) and Token issuance, delegating the power to build a network to the public.

Taking web2's securities trading platform as an example, it needs to consider hacker risk, policy risk, user trust risk, liquidity risk, and technical risk, including matching system/operation and maintenance/server, etc. The threshold limit makes the trading platform only managed by giants. participate. However, if you build an aggregated DEX, these costs do not need to be considered, you only need to focus on serving users and continuously optimize the user experience in different scenarios.

Therefore, the new web3 infrastructure brings a brand-new product form thinking, and its core is the thinking about production relations. When we talk about the importance of tokenomics, what it expresses is a reshaping of the production relationship: because Token builds a self-marketing network, Holder, who enters the game, spontaneously spreads "products". When we mention the "consensus is king" of web3, it is a kind of "traffic is king" of web2 after the reshaping of production relations. Compared with the traffic driven by product force, web3 pays more attention to the traffic that is spontaneously driven by consensus. .