Adoption of Web3 by established brands exploded last year and major companies continued to launch blockchain projects in 2023. With one notable difference: the locus of activity shifted from Ethereum to the Polygon network, according to data compiled by NFT Tech.
Ethereum was the most popular destination for brands in 2022, accounting for 43% of 241 blockchain projects launched, while the Polygon network had a 23% share. In the first quarter of 2023, Polygon led with 41%, followed by Ethereum with 34%.
Since the start of 2022, 79 brands launched non-fungible tokens (NFTs) on the Polygon network, with 28 of those arriving in Q1 2023, NFT Tech research shows. Decentraland, a metaverse project which operates its collectibles marketplace on Polygon, was the main driver of recent growth with 17 digital collectibles launches by major brands in the first three months of the year.
Skate to Where the Puck is Going
The motivations and range of brand experiments in Web3 span marketing and loyalty programs, improved customer experience and solutions, and existing business problems. Underpinning the trend is the realization that brands need to meet the next generation of consumers where they will be spending more of their time -- online and on-chain.
An increasing amount of consumer spending and leisure already takes place in virtual realms. Virtual platforms like Fortnite and Roblox have 70 million and 200 million monthly active users respectively and gamers spent an estimated $67.9 billion on in-game purchases last year. NFTs and other tokens are poised to enhance those experiences with true digital ownership and self-sovereign identity, giving users a stake and a voice in the digital communities they inhabit.
User experience in Web3 doesn’t have to be confined to the virtual spaces and brands increasingly blur the line separating the real and the digital. Australian Open NFT holders got tickets to see the matches at Melbourne Park, Nike gave CloneX holders discounts on a new line of physical shoes and Starbucks Odyssey loyalty program includes tangible rewards.
Since 2022, some 320 brands launched Web3 projects with 90% of the projects choosing Ethereum Virtual Machine-compatible blockchains, according to NFT Tech data. Ethereum and Polygon accounted for 67% of all activity, a testament to the power of smart contract interoperability, superior tooling and enhanced liquidity offered by the broader Ethereum ecosystem.
The Polygon network has emerged as a go-to place for large companies seeking an entry point into Web3 thanks to its technological merits: fast transaction speeds, low fees and a negligibly-small carbon footprint. The chain is home to over 11 million collectible avatars minted by Reddit users, Starbucks Odyssey pioneering loyalty program and Mastercard’s Web3 artist accelerators. Nexon is building a dedicated gaming blockchain using Polygon Supernets for its MapleStory franchise which has over 180 million fans worldwide.
Securing these and other major partnerships creates a flywheel effect -- brands attract users which in turn attract more brands. The presence of mainstream companies and their customers is also an appealing point for Web3-native applications in decentralized finance, NFTs and blockchain gaming that are looking to grow their user base beyond the crypto-savvy early adopters. These are the early stages of Web3’s evolution toward mass adoption over the coming few years.
About the author: Adam De Cata, CEO of NFT Tech, started his career with Warner Bros at Licensing and Brand Management, where he created and negotiated licensed products in clothing, electronics, food & beverage, publishing and toys, as well as all aspects of brand marketing management within the licensing business. As Head of Partnerships at Decentraland, the world’s first fully decentralized virtual reality platform built on the Ethereum blockchain, Adam established relationships with key global brands. His work touches web decentralized apps development, game design, cryptocurrencies, 3D art, decentralized server applications and networks and new experiences like immersive VR.
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