Web3 technologies are revolutionizing the way everything works on the internet, with more companies getting ready to jump onto the trend —but how can we simplify Web3 to make it even easier for emerging companies to jump onto the trend?
Techopedia spoke with Ava Labs’ head of Korea, Justin Kim, to find out how Web3 is simplified.
About Justin Kim
Justin Kim was an investment banker in Mergers & Acquisitions, where he was responsible for finding and strategizing business opportunities across the industry. Believing that the future of finance is in blockchain technology, Kim pivoted into the cryptocurrency industry during his graduate studies in San Francisco.
His first experience in crypto was building NFTs and marketplaces for games.
In January 2023, Kim joined Ava Labs as the company’s head of Korea and software developer for the Avalanche blockchain. He described the opportunity as “an exciting new chapter in the same vein, with so many opportunities across the industry, from finance to gaming [and] infrastructure”.
Efficiency and User Engagement the Key Benefits in Simple Web3 Adoption
Kim explained that Web3 is the next phase of innovation that combines both technology and mindset into one unique area. With Web3 utilizing blockchain technology and fostering peer-to-peer interactions, companies could achieve trustless transactions and promote user ownership of data and digital assets, making openness and innovation a key mindset within Web3 adoption.
“Every business faces challenges. Web3 can be a part of the solution to many by improving efficiency and inviting new people from different age groups or geographies… a lot of our business operations today require handling paperwork and dealing with middlemen.
“Digitalizing and tokenizing a lot of that process will save time and decrease costs for certain businesses.”
Moreover, Kim highlighted that user engagement can be very noticeable in retail businesses with additions such as loyalty programs and gaming, where users can own what they accrue through their usage and engagement if Web3 is to be implemented.
With decentralized and user-centric platforms, individuals have greater control over ownership and active participation in shaping the digital landscape. In addition, such value-added engagement can create more direct and dynamic consumer relationships and can provide new possibilities for both sides to use data.
Kim pointed out that Ava Labs’ Avalanche, a smart contracts platform in the blockchain industry that lets Web2 companies seamlessly enter the Web3 space, is expecting to see a lot happen in Real World Assets (RWAs) and gaming in 2024 in relation to Web3 integration.
“For instance, financial titans like JP Morgan, Apollo, and Citigroup are testing new financial services possibilities on Avalanche. Highly anticipated AAA games like Shrapnel and Off the Grid are gaining a lot of attention for incorporating Web3 features that could make games more exciting than ever.”
Web3 Simplified: Biggest Misconceptions
A common misconception among businesses wishing to step into the Web3 space is the expectation of an instantaneous transformation where Web3 rapidly replaces Web2.
Kim noted that many businesses feel they need to find a perfect entry to get into Web3 when, in reality, it is more than preferable to start small.
“We would like to call it, ‘crawl, walk, and then sprint,’ where you can start by taking small steps experimenting with little things.
“For example, if your grand vision lies in rebuilding your business on non-fungible tokens (NFTs), you can start with giving out free NFTs that serve as a souvenir with little value and see how your users react. A full-blown NFT marketplace with perfect payment rails can come much later once users feel more comfortable with NFTs.”
In addition, Web3 systems vary in degrees of decentralization, with centralization still managing to manifest, which could further highlight the importance of education.
Kim says the best resource for Web3 education is to hear from existing Web3 businesses and learn about their journey.
Compliance Needs Must Be Met
Kim explained that meeting Know Your Customer (KYC) and Anti-Money Laundering (AML) compliances is imperative for Web3 businesses because — despite the decentralized nature of Web3 — regulatory requirements for customer identification and prevention of illicit financial activities remain crucial.
Adhering to KYC and AML standards and other geographic considerations ensures a legal and secure environment while fostering trust among users, regulators, and the broader financial ecosystem.
At the same time, Kim noted that this could create a lot of potential problems for launching on a public blockchain since public blockchains tend to be general purpose and governed by a fixed set of rules. As a result, each business will need its own unique blockchain to operate and stay compliant.
However, making sure companies implement robust compliance measures not only safeguards against legal risks but also promotes responsibility and transparent operations within the evolving landscape of decentralized technologies.
Businesses Launching Custom Blockchain Adoption to Continue in 2024
Kim noted that the goal of AvaCloud, Ava Labs’ simple, end-to-end solution for on-chain needs, is to let partners focus on their business and not worry about the technical implementations that come with Web3 integration.
“AvaCloud does this by minimizing time-to-market, overhead, and the expense of launching a custom blockchain. There are a number of real-world use cases across industry.
“For one, SK Planet, a Korean conglomerate, launched a fully compliant Avalanche Subnet, which was executed and managed by AvaCloud.
“SK Planet onboarded 220,000 KYC’ed actual users and launched three different consumer applications in Korea, including a loyalty program, K-pop tickets, and e-sports fan rewards on Avalanche for their retail users.”
The launch of platforms such as AvaCloud help push forth the continued trend of Web3 businesses adopting and launching their own custom blockchains tailored to unique business ideas from financial applications and AAA games.
Kim added that real world assets and financial applications will benefit from blockchains with KYC features to stay compliant, and games will require a tailored blockchain with custom fees and the ability to produce smoother, more hassle-free gameplay the further we move into the new year.
“As operators in the space, we are definitely excited to see all the creative ways these new Web3 businesses will apply the blockchain technology and embrace the open innovation mindset as we move forward with greater adoption.”
- Ava Labs Official Website (Ava Labs)