a aN cies The Blokhaus EViesten ices: = ee * is are oe reoR ee a cg eee es future and help your organization pursue new opportunities. Maybe you've already taken the plunge into Web, or pethaps you've been looking at last year's headlines, and you'e just trying to figure out what the hell happened. Should you tell your CEO not to touch the space with a 10 of 100-foot pole? Or is it Finally time to test the water, now that the tourists are getting out of the pool? You already know what Seer We may not be psychics, but we know how to read the room - so here's what we think you should know, Ce cee eee ee mae ee ene Chet ce Ce ean reer eta!Contentsblockchain techgamingfashion + luxuryconsumer goodsarts, music + entertainmentsportsRt. es communitiesgovemment+ regulationWhats the answer to Web3, the metaverse, and everything?ICYMI: see enealicenl cme getting good.Blockchains are about to become rea Ln now the conventional wisom about blackchains nee been that they canbe sealable, of decentralized, but not bath. Biteoin Ie ‘currently chugging along at 7 transactions per second (TP), with Ethereum net doing much better st 27 But some of the newer biockchais Ike Algorand and Solana are already boasting TPS inthe thousands, and have made steady improvemonts over the yoo, as scaling solutions become more proven and sophisticated Now, massive milestone of T millon TPS is within reach, withthe ‘dovelopmant teams working on Cardano,Tezos, and Polkadot “announcing plana for 1M TPS in 2028. Polkadot ooking to sohieve ths through something called ‘asynchronous backina’ while teams inthe Tezos and Cardano ecosystems are building out Layer 2 ‘soltions, which are methods of taking some ofthe heavy iting ay from the Layer blockchain. Cardano does this using its own Scaling solution, Hydra and Tezos via ‘smart rollups:Anote on The Merge’ 2022's least interesting blockchain news. Did you hear about tho Etheroum Moras? was eaiy the most talked-about technica event inthe blockchain space act year, but honest tous, perhaps the least interesting, While Ras areat to fee the biggest smart-contractblockchan nally transition from the ‘Costly Proof of Work consensus mechanism ra the vacly mare ‘energy-aficientProot of Stake tk Ethoreum along time o get there. As far a wate concerned, "The Merge’ was an exercise in Playing catch-up. Rv slo notable that while blockchaine ke lgorand, Cardano, Cems, Polkadot. and Tezos already use some version of onchain governance, Ethereum insists on upgrading the ‘ld-fashioned way, via offchain governanceOur take? The tech is giving us reasons to be optimistic about Web3. Significant technological dovelopments across major blockchains fre Erloging Web8 closer to malnatream adoption. Not only are ‘major smart-contrac blockchaine much more capable naw than they were even a year ago theyre als ar more energy aici ‘The adoption of Proa-of Stake consensus mechanisms mears that ‘environmental conscious brands and consumers ale have ‘several Blackchains they can choose from, including Tezos, Solan, and row Ethereum, without compromising efforts to reduce ther Carbon footprints, a tDespite growing pains, the promise of DeFi Sie elUl@laelayIf something seems too good to be true, it probably is. Tha dieam of bacoming rch trom some speculative tokan that people have barely head o san alluring one, and has ed to many people inthe cryptocurraney space ust chucking maney at projects tnd hoping forthe best. Lets be honest, a large porvon of the Secentralized finance (DeF}) space has been empty hybe, promising increible yield and payots based on shaky eanomics and Unsound fundamental. But the tue promise of DeFl, asa revolutionary, altonative financial system. cutsid ofthe control of Intermediates ike financial institutions and governments, stil, worth geting excited about. The Def applications we've seen fomerge so far have barely scratched the surface ofits potenti.Friendly reminder - the FTX calamity was NOT DeFi. Some skeptics point to the colpse of ‘pone wrong, wasn’ FTX wasnt decentralize aan example of Defi east but Powerful blockchains will enable real, valuable, DeFi applications. Soar, scalabilty contains have prevented the davelopment of fobust Dei patforms that cen actully standup t tredtiona ‘nancial insttion. We hopeful that ar muliple biockshains ‘achieve the milestone of millon transactions pee second (TPS) 9 ‘the year to come, this potenti il be fly realized, ana blockchain technology wil start to compete with tracitona financial networks like VISA and Mattrcar {na blockchain. What the FTX debacle was, was a standard, ran-of ‘her, wadtonal isneileatasttophe just another example of 8 company that became insolvent ue to centalizad mismanagemert. 08 (Qiee using the chartabe term mismanagement: here, panding tbe results ofthe investigation ita former FTx CEO Sam Bankman- Fraud, er Fred),Gaming + Webe3: A'willthey, wont-they drama.Gamers don't want to hand © © over more money. ‘Gaming platforms like Sandbox, Unity Technologies, Roblox, and XS yOur bet? Web3 gaming turns the corner in 2023 and becomes hot-hot-hot \Viebs technologies can enable ownership of in-game items in ‘exciting new ways offer exclusive access and benefit, unlock interoperability of items between games, and more. To succeed, ‘game develope ill ned to further improve the use experince ‘and iterate Webs in way that focuses onthe players rather than just enabling adevona layers of microtransactions. We expect 2023 oe the yea that gaming becomes the biggest area af innovation in Web3, as both players and developers start to recognize the powar of blockchaintachnolagy to add ta th game | ‘experience, not over complicate. Were exited to see what the ‘gaming industry dreams us Play-to-Earn is NOT it. [NFTconnected games need to hook payers with moe than ust the possibilty of making money. You may have heard of Axia infty. = So-called lay-to-ear” video game which garnered alot of mainstream attention and VC funding when twas launched in 2018, Dixie Infinity was once pred as an NFT gaming success story, but the economies (ety nomics?) ofthe came attracted serutiny Se peop asked the qverton whats the vale being created by players in the game, and whe spaying frit? Concerns were aso Falsed when i emerged that a otf players. especialy inthe developing word, were using isolalyas source of income, not enjoyment itera. games should be fun and empowering they ‘houldet fee ike a jab.The metaverse has enormous potential (if done right).The metaverse doesn't have to heres ne escaping th afore the sei cial realty that many of us Imagine silly realized, ut the metaverses increasingly coming into focus as bigh-ausity content becomes svalabla and viual realty hardware Becomes more convenient ond stops making us seasick). This fntcipated wosrables expected from Google, Ap age ap. nthe meantime, Gen Zs defining and experimenting wth the numerous metaverse environments that exist today - theyre making Iiends on VRChat, building magial kingdoms in Minera ‘nd roleplaying their best lives in Rblox.The metaverse is like social media, circa 2008. Let's get it right this time. Inthe lat 2000s, many brands were late to adapt to social media, and quickly found themselves behind the curve Brands inthe 2020s should learn fom that experience and start thinking about the metaverse now setting up teams ond puting resource in pace ‘that will hep them enter this uncharted verity. This tl become Imperative as the purchasing power of Gen Z, the metve {generation continues to grow. 4 2072 tudy showed that ‘amore enand twice as much tine hanging out inthe metaverse {than in eal fe, and its there that they choose to cultwate their Identities nd socal connections. The metaverse will let fashion get cooler and weirder. most enticing aspect ofthe me Vd of pure imagination for boundaries and diferentate themselves, Top brands are racing tebecome fashion icon in the metaverse and embracing a new fer. of design - whore virtual garments can be made to leok eat tnd eve ve In any way the designers choose, or tansform y- Alongside purely digital goods, so-called "phyaital 2 coming tthe fore- the pating of physical products ital counterpart or virtual experience. Last year saw Tiffany create a unique set of highly coveted CryptoPunks rose gold pendants followed by the launch ofits fst NFT collection, Called NFTif orang the frst tangible link betwoon NETS are fine Jewelry The collection tld et in 20 minutes wih a mint pics of SOETH, generating $12.5 milion n revere,Web gives communities new ways to engage with what they care about.Web3 lets fans own a piece of ‘Consider the world of sports, where being aan means being invested in everthing frm physical merchandise othe performance of 3 favorite player, to proof of attendance ata ‘championship inl, and even moments rom a classic game that can be replayed and shared, Web technology allows brands to cer Customers true ownership over experiences that might previously have boen ephemeral or ecatered across various Web? platforms {er forgotten in shoeboxes, in the atic) n particulate past couple ‘of years has coon major sports brand explore the idea of fan Paticipation via eajtalcolactbles, which ere unlocking richer ‘xperences than the physical wading cards fold The NBA In particular has emibraced Webs, launching various activations Including @colection of dynamic NFTs that change In appearance based on player performance. Is nts! basketball Other heavy hitters inthe sports word including FIFA th NFL, NHL. MLS, the ‘Austalan Open, Manchester United Football Club, and Formula havo al launched ther own digital colecibie.Brands take note: In Web3, communities rule. The rise of social media gave consumers a voice, and now Webs: ‘ives them a platform to take contro and elect change. ‘Consumers are more poverfulnow than ever before and theyre ineressingly inclined ta dump brands that dort align wth thei value. fs important for brands to reach these crypto-cutious ludiences in places where they act ‘what theyre saying. smart brands wi ‘management. align thamsslves with thelr customers, and Follow thet lead when developing new products and services. Communities want Web8 to reflect their values. ‘A central promise of Web3 is that ts decentralized nature wil shift power back into the hands ofthe people that use it, rather than ‘centralized entities ike tech componies, Webd is steady ensbling ‘communities to find new ways of organizing around shared causes, Including through DOs decentralized autonomous orgnizations AOS can be created for almost any purpose from fan communities toactvam. For example, Uta DAO has donated over $7 millon to suppor Ukranian cheitis, war rele, and evacuation eons, and UnicornDAO, co-founded by musician and activist Nadia Tolokonnikova, eles funde or human right effort around the work: In aklitin othe new organizing paradigm of DAOs, entre industries are rowiting the rules and e-defining ther business ‘models on Webs platforms. nthe digital art community, artsts have banded together to ereato a more equitable revenue modal. puting pressure on NET marketplaces to enable them to earn royalties from future sles oftheir work. n responce to atts’ concern, major FT platform OpenSea developed a contract which biocks NFTS om being sold on platforms that don't pay royalties to creators, and NFT rminting patform Manifold hos made teary fr artist to write ‘Sistom smart contact. Already, som crests including fenowned English tat Oamien Hist, have writen thee own srnrt ‘contracts, blocking ther art from being sold on n-royalty platforms.We see Web in your future, go out and conquer it.In the future, the tech details won't matter, various protocols that underpin our experience ofthe for now it's til unclear which Blockohaine wll prevail ‘hart brande wil take a thoughif approach, and vet the varout ‘ptions to find the eombination of technology and vais that best Signe with theiidentiy.The good news? Web3 is about to get a whole lot easier. In the ature, no one willbe wondering, 'sm Lon the blockehsin right ‘how?’ The tech will ust work While we havent yet arived a tue \Web3 - a completely new eration ofthe Internet underpinned by Secentralized technologies -the end-user exper altho timo. Startup, dovelopors, brands, artists and cr allindusries are designing seamless user experiences people into new, decenvralizes spaces. When it comes to Web3. marketing, brands should go back to basics. | brand-new space ike Webs creates new challenges when it comes tomarketng, but new opportunities, oo, arands should target the audience that wil ring the most value othe initiative, and not shy away from: cope personalized marketing campaigns. After Slit doesat matter how many tes a sports fan sees the name of Bicetehain ora Webs product emblazoned on race cars or soccer stadiums if they dont understand what to ‘do with it. Whether youre launching a new Webs spplieation oa sute of digital collectibles, start withthe customer, latent their needs, and work backwards from there. And don’ tine simply in trms of single campaign Webs provides undue opportunities for long-term customer sngagoment, through every aspect of ther journey. This ust the ginning ofthe conversation 08 ‘etuolwsasmrdgontnonn epi hoe About Blokhaus. Blokhaus i a marketing agency and product lab, born in Webs witha focus on emerging tech We ext to help brands and Companies navigate the word of blockchain technology, and Incorperate Webs int their business strategies. Our teams made up of Web focused marketer, tachnologit, designers, and blockehain community members rom al over the world Webring diverse experiences and specialties tothe table, from consumer electrons, tobi tech, to paiies, 0 fine art ta media to crypto snd more