Web3 Entrepreneurs: How to Thrive In The Current Market
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In July 2022, Vitalik Buterin gave the keynote address at the Ethereum Community Conference 4 (EthCC) in Paris. While Buterin strongly believes in decentralized finance (DeFi), he stressed that this bear market is a chance to carry the banner of decentralization further.
I sat down with crypto-marketing expert, Arnaud Labossière, for a brief interview. We discussed his take on the crypto bear market and who stands to gain from it.
Bear Markets are an opportunity for builders
The cryptocurrency market as a whole has been in a nosedive since the end of 2021. Throughout 2022, we’ve watched as prices have dropped sharply and project after project has tumbled. Terra, Celsius, and Voyager are some of the bigger names in that group, but many lesser blockchains have followed in their footsteps.
Predictably, the faint of heart have largely withdrawn from the field. However, those with a passion to build the next stage of Web3 see this for the opportunity that it is.
Cryptocurrency isn’t the only place where fortunes can be made while the candles are red.
Facebook, Uber, and Airbnb are household names, and they all made great strides during down markets. Facebook launched in 2004 after the dotcom bubble popped, while Uber and Airbnb were both founded during the 2008 global economic downturn.
With examples like that, Labossière sees similar successes in store for crypto. When asked about the importance of community, he was emphatic. He pointed out that bad fundamentals with a strong community behind the project can lead to success, whereas anything good without the community is doomed to failure.
“Everything is a community. Even Bitcoin has a cult-like following … with its own code, influencers, gurus like Max Keiser or Michael Saylor. The success of a project depends on the community … and the project has to value, empower and respect the community to last.”
He went on to point out that Do Kwon’s public missteps on Twitter contributed to Terra’s fall from grace. And other leaders in the crypto space have faced the same kind of fallout when they disconnected from their community.
Bear markets are also for innovators
It doesn’t take an innovative mindset to know that a bear market equates to sale prices. However, the investors who weren’t chased out of the market tend to flee to the safe harbors of blue chip coins like Bitcoin and Ether.
Labossière reminds us that countless other opportunities are emerging every day, but you have to be on the lookout. There are still tokens going to the moon, ICOs that are being overlooked, and NFT projects that are thriving.
According to Labossière, there are still plenty of challenges though. “FUD is everywhere. And holders prefer to invest time and resources in bluechip tokens rather than uncertain moonshots. But from a crypto-builder perspective, it’s much more profitable to start building during the bear market and capitalize on the next bull.
“Retail money is leaving the space, while institutional money or smart money is massively investing.” And, he’s right. Venture capital firm, Andreessen Horowitz, raised $4.5 billion USD earlier this year for crypto projects. Other, more recent, funding includes $200 million USD going to Limit Break to build blockchain games and $56 million USD for ReadyPlayerMe to develop their cross-game avatar platform.
Keep on grinding
Whether you’re a builder or an investor, one thing is certain. Like so many things in life, you’ll get out of this what you put into it. The bear market is separating the wheat from the chaff. To find out which is which, you have to put in the work.
For starters, do your own research. At the best of times, there are plenty of scams and rug pulls out there, and these aren’t the best of times. Also, continue to educate yourself with crypto trends and web3 technologies. It’s a professional investment that always pays huge dividends.
Anyone can buy bitcoin and HODL. The real victors of this bear market will be the crypto investors and web3 builders who can find the hidden success stories among the wreckage of the failures.
We’re in the middle of a crypto winter. If this is anything like the last one, we still have a way to go. Still, this is a great time to build, and not just in DeFi. Finding investment capital can be a challenge, but that just reinforces the need for a project to be adding value to the Web3 space.
The bear market is just as good for investors as it is for project developers. Blockchains are still running, NFTs are growing, and new projects are coming online.
To stay in the game, you need to do the work. Do the research, find the diamonds in the rough, and reap the rewards. It’s a fabulous space, but also a rough one. As Bilbo said to Frodo,
“It’s a dangerous business, Frodo, going out of your door. You step into the road, and if you don’t keep your feet, there’s no knowing where you might be swept off to.”