The trends set to shape Web3 in 2023

Written by Dusan Stojanovic, Kelly Choo, Frank Desvignes, Fredrik Adolfsson, Beatrice Lion, and True Global Ventures General Partners.

While 2022 started bullishly, the entire tech sector quickly found itself in a bear market, but Web3 was hit especially hard in the latter half of 2022. While this year has started positively, it still remains to be seen how 2023 will pan out.

As an investment firm covering 15 countries in Asia, North America, and Europe, we feel well-placed to make some predictions on which megatrends will stand in the year ahead.

Image credit: Timmy Loen

1. Last year’s winners to keep on winning

The companies that emerged as winners in 2022 will grow stronger this year. We believe that investing in secondary shares of these later-stage companies or buying from shareholders who are in distress presents investors with good value.

It’s the right time to search out these opportunities and find companies that will help grow the industry tomorrow.

Last year’s winning Web3 unicorns are going to be stronger than ever. In every crisis, companies die and give market share over to the survivors, who consolidate via M&As at discounted valuations.

Web3 market leaders will help sustain the entire ecosystem, which will form a much stronger community than in Web2, where the market leader takes all.

2. Centralization is dead, long live decentralization

We see three winners in decentralization for 2023: self-custody, decentralized finance (DeFi), and Bitcoin.

Continued uncertainty after the Luna and FTX fiascos as well as the lack of transparency surrounding both incidents have provoked a short-term flight to self-custody, which refers to users having control over the safety of their own crypto wallets.

Companies like Ledger and Trezor in the hardware wallet sector benefited from the trend, as did other secure custody solutions, whose sales grew up to 300% in Q3 2022.

“Not your keys, not your coins” isn’t just a snappy saying but also a megatrend for the next five years.

As transparency will be key, centralized custody needs to adapt to survive.

The heart of DeFi are decentralized autonomous organizations (DAOs), protocols, and projects like MakerDAO. With the collapse of non-transparent, centralized organizations, real DeFi ventures will shine.

3. Consumers will demand to own their data

4. Open metaverses become mainstream

5. Decentralized AI in Web3 to gain real user traction