We believe Web3 is not just about Bitcoin or crypto finance; it represents the internet of value, an evolutionary upgrade from Web2. As a fundamental shift in data storage and payment methods, Web3’s arrival won’t be as visibly distinct as the transition from PC internet to mobile internet. Instead, it will “arrive silently, like the spring wind that nurtures everything quietly.” So, what is this “wind”? We believe it is the large-scale creation of user data and data assets on-chain, as Web3’s superior user experience revolves around user data.

The core of Web3 is “Own”—ownership. For Web3 to truly be Web3 and not just crypto finance, users must own their data assets, not just financial assets. User ownership of their data is the foundation for better service experiences and personalized services. The internet evolves from satisfying needs to personalized experiences and ultimately to personalized services. AI provides the productivity for personalized services, but large-scale value coordination for these services can only be supported by Web3.

Earlier, I attended a lecture by Professor Zeng Ming on the stages of AI development, which was very insightful (available on the Zeng Ming Academy’s official WeChat account). The professor mentioned that the same framework could be applied to understanding Web3’s development, which I found highly inspiring. Over the past few years, our observations, experiences, and strategies have aligned more clearly after understanding these developmental stages. This framework has not only validated our approach but also reduced much of the associated anxiety.

The professor also provided a definition for native applications (Killer Apps):

1. Fully utilize the unique technological advantages of new technologies;

2. Deliver groundbreaking innovations in user experience;

3. Explore new business models;

4. Offer super 2C services that drive exponential growth in massive user bases.

By this standard, Yahoo, which went public in 1996, was the first-generation internet native application, while Web3 has not yet reached the stage of native applications. Why is it so challenging for non-financial Web3 applications to emerge? The reason might be simple: we don’t yet have enough non-financial Web3 users. No early native application in internet history has appeared out of thin air—they all underwent a long period of popularization, even ground-level promotion, before becoming killer apps. Without AOL’s years of promoting internet users, Yahoo wouldn’t have existed. Similarly, Alibaba, Tencent, and Ctrip all went through prolonged user accumulation processes.

We believe the development of Web3 has a duality: Web3’s vanguard—crypto finance—is progressing much faster, with active addresses reaching approximately 600 million, equivalent to the number of internet users in 1999. This explains why we already see financial native applications like USDT, wallets, and DeFi. However, Web3’s core—the next-generation internet—has far from achieved user popularization. Only when large amounts of user data assets and services around these data assets appear on-chain will users actively choose to use wallets to interact with the internet and Web3 products, marking the true arrival of Web3.

For any technology to integrate into the mainstream economic system, it must rely on commercial applications as carriers. At the current stage of Web3’s development, we need commercial applications across industries to leverage Web3’s core technological features for their own business purposes. By creating and issuing large amounts of data assets on-chain, they can develop new internet business models. In doing so, they will generate enormous commercial value and become the first generation of native Web3 applications.

All internet commerce revolves around data, whether centralized or decentralized. Web3’s commercial applications focus on data-decentralized dApps. The data assets mentioned here include user identities, membership levels, movie premiere tickets, concert tickets, highlights from musicals, the first batch of crowdfunding cards for a singer’s debut, the 5000th like on Akari Sato’s photo album, “Fan Xian’s Smile” issued in real-time during a particular scene of Joy of Life, and various types of attendance credentials. These assets will use NFTs as data carriers, with their original content stored on decentralized storage infrastructures like Greenfield.

We have summarized five core technological characteristics of Web3: 1) Unified ID across the network 2) Value Internet: Integrating the internet and banking networks into one 3) Everything can be tokenized: Finance and data 4) Establishment of comprehensive “live data” across regions and platforms 5) Direct user reach on both informational and value levels

Web3 business applications built around these technological features will have the following five characteristics:

1) Universal Data: Cross-platform and cross-regional data. Data can be tokenized, traded, and authorized for AI models, enabling intelligent user services. On-chain data operations will become highly significant.

2) Delivering the Right Thing to the Right Person: Direct connection between content/product creators and consumers, allowing differentiated experiences and pricing.

3) Value Directly Connected: Embedded financial networks enable peer-to-peer value transfer like information. Settlement and clearing are integrated, and value distribution can be automated and timely through smart contracts.

4) Effective Incentives: With a sustainable and healthy business model, projects can issue NFTs and ecosystem tokens to achieve cold starts and accelerate ecosystem growth.

5) New Organizational Models: The interests of startup teams, shareholders, industry stakeholders, users, and fans can be unified through tokens, reshaping organizational structures across industries. Traditional company structures are no longer the sole option.

We believe that such Web3 business applications align with the current stage of development and represent truly valuable Web3 use cases. China’s internet business and content going global have provided the perfect timing for Web3 business teams. Using Hong Kong as a base also offers geographical advantages. Web3 serves as the best infrastructure for global business, exporting standards with embedded financial systems and self-sufficient functionality.

Our envisioned growth path for a Web3 business application targeting the global market could be as follows:

1) Build a globally unified and fully functional user or fan account system using Web3.

2) Conduct business using NFTs and tokens as carriers, with NFTs serving as various data tags.

3) Fully leverage public traffic while using Web3 tools and various Web2/Web3 wallets to build a private domain system.

4) Quickly establish a comprehensive and real-time updated private domain data system, using data analysis and feedback to better develop the business.

5) Achieve cross-industry and intra-industry data advertising on-chain, offering cost-effective and precise targeting.

6) Provide users with personalized and intelligent services based on their data assets, delivering a product experience far superior to Web2.

7) Enhance product stickiness, achieve effective dissemination and retention, and form a self-reinforcing data growth loop.

This growth path is particularly suited for industries like ticketing, film and cultural content, entertainment creation, and collaborative IP development. Without a Web3-based membership and fan system, the content economy and IP economy cannot unfold effectively. Web3 excels in enabling creators to maximize functional value, generating significant emotional and asset value for fans, supporting IP incubation and co-creation, and facilitating value distribution across the chain.

We have already begun investing actively in these fields. Additionally, we are investing in the necessary Web3 business infrastructure to support such applications, including data chains, intelligent tokens, payments, stablecoins, human resources, and global payroll services. We welcome outstanding entrepreneurial teams to approach us. You only need to focus on your business logic—we can arrange technical teams to handle the rest.

At a time when technology leads application development, this is the most imaginative and opportunity-rich phase for business innovation. When discussing this path with CZ, he emphasized that execution capability is another key factor. Therefore, we highly value the backgrounds and abilities of teams, and we particularly hope to collaborate with Web2 resource holders and leaders to jointly drive the implementation of Web3 business.

Together with project teams, we have analyzed that the core of all internet business lies in data. Whoever helps users create more data will own the moat of future business. Why are companies like Alibaba, ByteDance, and Tencent so profitable? If ByteDance and Tencent were to open up their user data and traffic, how would we compete? The standards we use to evaluate Web3 business applications are:

1) Has the project clearly defined why it is helping users create on-chain data assets? How does being on-chain empower the business itself?

2) How much data assets can be created?

3) How can the data be applied and analyzed to provide users with a more compelling experience (e.g., retention and upgrade incentives)?

4) How can the value of the data be realized? How can it be connected to AI models to reduce costs and increase efficiency?

Web2 has reached its competitive limits, and we need better and more cost-effective data traffic. With Web3’s open on-chain data, application teams can collaborate to share data and drive mutual business growth. We encourage and actively promote project teams to unite. Open Data, Open Business!

Web3 business applications are not the blockchain transformation of years ago, nor simply adding Web3 to traditional industries. Instead, they represent the first generation of Web3-native applications built around on-chain data assets. I haven’t even mentioned token incentives, the core of previous blockchain transformations, because tokens have been overused. While token incentives seem free, they come with a cost—the tokens issued must eventually be accounted for. There’s no free lunch in business. Like Didi’s early commercial model, it ultimately required coordination between the project and VCs to call a stop. Delays in Web3 crypto financial regulation, overuse of token economics, and premature value creation have distracted the industry. Talent and capital have been overly consumed by various true and false financial innovations. Web3 must return to its value essence and basic commercial logic: Can it generate profit? Can it provide internet users with a better experience? When a Web3 business application has real users and wallet addresses, only then should token economies be introduced. This ensures that token holders are not just speculators or bounty hunters. With a robust business foundation, Web3’s ultimate weapon—the token economy—can thrive. Prioritizing data assets before financial assets ensures healthier development. I shared with CZ my hope that every business application token will have the solid value foundation and necessity of exchange tokens like BNB.

Web3’s infrastructure is now advanced enough to compete with Web2 in acquiring user data. For Web3 to ultimately replace Web2, it must hold more user data. As Datadance Chain founder Geoffrey said, “The aggregation of content assets online created killer apps for the PC and mobile internet; the creation of data assets on-chain can give rise to key users for Web3-native applications.” The internet is evolving from aggregating content assets online to issuing data assets on-chain.

Mr. Liang Xinjun asked why AI has developed faster than Web3 in recent years. My answer was that Web3, being inherently tied to finance, makes startups feel like they are working on Wall Street or in Vegas—full of distractions and temptations. AI, in contrast, feels like campus-based entrepreneurship, allowing for greater focus. Mr. Liang observed that Web3 and AI are inherently interconnected. Web3 must also focus on commercial logic and solve business problems—a sentiment I strongly agree with. While AI currently leads, Web3 must catch up. If AI-generated data assets are issued on-chain rather than being siloed in Web2’s data islands, they can form a self-reinforcing loop of commercial value growth. The future of a digital economy based on Web3 and AI is exciting. Professor Zeng’s vision of an explosion in intelligent business over the next decade precisely stems from the combination of Web3, AI, and XR technologies.

Web3 is to internet business what Bitcoin is to finance. Ethereum is nearing its tenth anniversary, and Web3 commerce is just beginning. Participating in the co-construction of Web3 business today offers opportunities comparable to buying $100 worth of Bitcoin in its early days.

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