Web3 is everywhere. And where it isn’t, it soon will be. Unlike simple price speculation, there is a truly valid FOMO (fear of missing out) when it comes to building a Web3 platform or adding Web3 functionality to your existing Web2 platform. There have been many great ideas—some incremental and others completely disruptive. Like the tech spikes of the past, everyone wants to get in on the boom and establish themselves as successful pioneer.
This is a great dream and has already changed the lives of more than a few people. However, before you jump in with both feet, it’s important to take a moment and ask yourself a few key questions that can help provide perspective and understanding of the process and give you a better idea which route to take.
What problem are you trying to solve?
Can anyone create a Web3 platform or add Web3 functionality to their app/website? Sure, with the right resources. Should anyone pursue this? Probably not just anyone, but there are certainly a lot of business cases and applications where Web3 functionality can be profitable and valuable.
Before you start, ask yourself what problem you would be solving by adding Web3 functionality. If you don’t know enough about Web3 to even take a guess, then you probably need to educate yourself on what Web3 is (and what it is NOT), what key benefits it can provide, and most importantly, will your revenue projections outweigh the cost of development and maintenance.
In terms of key benefits, there are certainly many. That said, some of the key attributes that most use cases rely upon are Web3’s immutability, ability to create a permissionless/trustless environment, create the possibility of borderless financial transactions, gamify behavior through token rewards, utilize a token as the native currency of the platform, and even use tokens for decentralized governance. From these attributes, there have been countless use cases made for finance (both centralized and decentralized), games, fundraising, supply chain, social media, and more. It has been shown through examples and completed implementations that most Web2 platforms could benefit from at least one of these attributes.
Taking a deep dive into your current platform (or a planned platform you’d like to develop) is critical to find what use case or use cases would offer you true benefit, then hone the idea so it fits your vision and business plan.
Development costs from the ground up
Once you have a great idea for Web3 development and you’ve analyzed enough estimates to see a rough idea of the possible returns, it’s now time to look at the costs. For a variety of reasons, including scarcity of skill resources, complexity, potential revenue gains, etc., developing a Web3 platform is incredibly expensive—and there are a number of different costs to consider.
According to estimates from Techgropse, a very basic application for Web3 can cost $60k to $80k USD. A more project focused analysis of the resources and time shows that the key skill sets—a blockchain developer, frontend contractor, and security auditor will optimistically take 22 weeks and will cost around $115k—again, for a basic Web3 development. Note, this does not include the time to develop the business plan, whitepaper or technical docs, marketing, and community building needed for a successful launch. With Web3 developer costs reaching up to $100 per hour, any project can skyrocket.
This calls back to the problem being solved and the need for you to nail down exactly what that problem is and have reliable data showing that your customers (or perceived new customers) will pay to have that problem solved.
One of the more appealing options, especially for those who have an existing Web2 platform, is to focus on exactly what you want out of Web3 and find an efficient way of making that happen. For many businesses, a key feature that requires the least amount of infrastructure investment would be working to accept crypto as payment but then also be able to easily offramp it (convert it to currency). This covers a huge amount of opportunity for businesses wanting to make their way into Web3 but want to start with low-hanging fruit.
For functionality like this, some platforms that are focused primarily on developers understand the Return on Investment (ROI) equation that must come out positive for Web2 and even Web3 platforms looking to add functionality (many Web3 platforms can utilize tokens, but offramping is either difficult or impossible). FLUUS, for example, has created an easy-lifting Widget and API that creates a simple integration. For this use case, it completely changes the business model and aligns it more with joint success between it and developers. Because it’s done nearly all the work, it will run the API without any firm costs, using a revenue share model instead. For platforms that are confident that their users want basic Web3 functionality, this strategy is appealing to many as there is little upfront investment. While there is revenue sharing, this only happens if the platform is also making money, further offloading risk (and if the popularity explodes, the platform still rakes in a lot of revenue). More platforms should be offering this type of model for those platforms who are development/investment averse, which would bring more and more platforms onto Web3, strengthening the entire ecosystem.
Upgrading your platform to Web3 functionality may very well be a great idea. There are a lot of use cases and success stories, but you first have to know what your use case is. From there, it’s critical to analyze the expected returns, then weigh them against the development costs. Alternative solutions for basic Web3 on- and off-ramping exist and are significantly cheaper, relying instead on revenue sharing as a way of betting on your success (and taking on the risk if your Web3 never takes off). In any case, if you can find the right use case at the right ROI, Web3 may very well be in your platform’s future.