The Web3 ecosystem is often regarded as the next infrastructure of the internet. However, nearly 10 years after the release of the Ethereum white paper, we have very few mainstream applications running on that infrastructure, writes Jesus Rodriguez in an opinion piece on Coindesk.
Meanwhile, he says, we continue to see the emergence of new infrastructure building blocks everywhere: L1, L2, and L3 blockchains, rollups, ZK layers, DeFi protocols, and many others. While we might be building the future of the internet with Web3, there is little doubt that we are overbuilding the infrastructure layer. Currently, the ratio between infrastructure and applications in Web3 has no parallels in the history of technology markets.
Why is this happening? Simply because it’s profitable to build infrastructure in Web3.
Web3 defies some of the conventional market adoption patterns in tech infrastructure, creating both a rapid path to profitability and unique risks for its evolution. To explore this thesis further, we must understand how value is typically created in infrastructure technology trends, how Web3 diverges from this norm, and the risks posed by overbuilding infrastructure.
Under the headings of Building Without Adoption Feedback, Extreme Liquidity Fragmentation, Inevitable, Increasing Complexity, Limited Developer Communities, and a Widening Gap with Web2, Rodriguez explores some of the perils of going too far too fast.
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