Blockchain protocols that provide Web3 services are witnessing a boom in adoption which is driving up revenue for them.
Web3 refers to a decentralized internet for the future, and there are several protocols already operating on it. Unlike Web2 applications that are centralized and largely controlled by tech giants, Web3 developers deploy their code on decentralized blockchains, nodes, or peer-to-peer networks.
They provide services such as decentralized data storage, data analytics, bandwidth, content streaming, and cloud services. Messari researcher, Mason Nystrom, has been delving into some of the more well-known Web3 platforms in the crypto industry. He stated that many of these protocols are gaining revenue through network adoption,
“While Web3 protocol revenue grows, it’s often driven sporadically, peaking and troughing with the varied network demand.”
Nystrom added that as Web3 protocol demand increases, these spikes in revenue should flatten over time.
Growing demand for decentralized web services
Services from tech monopolies such as Google and Facebook are fine for the majority of users but there is growing demand from a more privacy-conscious group of internet users that do not want their personal information harvested by these profit-driven companies.
According to the Web3index, which tracks the performance of the leading Web3 protocols, Arweave generated more network-usage revenue than others in Q3.
Arweave, which offers decentralized data storage using a proof-of-access consensus mechanism, generated $268,000 in revenue for the third quarter. October has also been a good month for the protocol, pushing 90-day revenue up to $418,837.
Filecoin is the second protocol in terms of 90-day revenue with $139,832 generated, and Livepeer is third with $98,789 over the past three months. Filecoin is another decentralized storage network and Livepeer is a decentralized video streaming platform.
The Web3index is still being developed and only lists six protocols at the moment. In addition to the three mentioned above are Akash, a decentralized cloud computing marketplace, indexing and query protocol The Graph, and Helium, a protocol based on decentralized wireless infrastructure.
The Web3index reports on the fees being paid into Web3 networks, “which showcases real usage,” it claims. The total for the past 30 days is $323,640 for the six protocols combined.