Web3 is taking the business of “being a channel” to the next level

This, my friends, is the effect of a “decentralized base value layer” fostering a widely distributed business economy.

It will be an eye-opener what great heights can be achieved when we function on a system whose fundamentals are not centrally managed.

To explain, I will be focusing on one industry and that will be “banking” with a touch of the trade ecosystem as we explore some functional examples of what crypto will offer on a much larger and high value-generating spectrum.

Uber, Airbnb and Online Malls

Imagine if I stopped you on a very hectic day and said: I run a “sign board” company and make millions of dollars and would want you to quit your job and come co-manage it.

You'd probably feel like smacking the shit out of me but… This is exactly what these companies above are: sign boards or let's use a more fancy name “channels.”

Let's look at numbers:

Uber

As of July 2024, Uber's market capitalization is approximately $151.34 billion. In terms of revenue, Uber generated $37.2 billion in 2023, marking a 16% increase from the previous year.

The revenue breakdown for 2023 includes $19.6 billion from ride-hailing, $12.1 billion from delivery, and the remaining from freight services.

While this company has made several experiments that would cause it to come close to “managing” a number of vehicles to be used by drivers on its platform, it largely operates as “a channel” connecting people in need of a convenient ride and car owners looking to monetize their ride and time.

Generating a revenue that makes up about 24% of your market capitalization is quite the performance.

Airbnb

As of July 2024, Airbnb's market capitalization is approximately $93.18 billion. In terms of revenue, Airbnb generated $10.24 billion over the past twelve months (TTM), reflecting a continued increase from $9.91 billion in 2023.

Airbnb reportedly charges hosts(property owners) 3% per booking and charges the guest a service fee of around 14% of the booking subtotal and just like Uber, they are simply a channel generating billions yearly.

Do I really need to go into online malls? Amazon dominates that space and there is absolutely no need for details there.

Sidenote: the interesting thing about these businesses is that in a way, they are sort of like an advertising/promotions platform and just as Google, once one cracks the code, it's not so easy for competitors to copy and catch up.

Channels of Web3

Have you ever asked yourself why people constantly develop things like “non-custodial wallets?” like WTF?

What's in it for these guys if they don't even control our assets but build all these free and cool features that makes our experience navigating the world of crypto smooth?

Well, that's the thing about the business of being a channel, it often seems like “charity” from a distance.

By using a specific wallet(which is typically a frontend) to access your assets, you're selling your attention to the company behind it. They may not control your assets, but they can put you in a spot to “organically” discover third-party products and services which are effectively “advertisements” and other times, services of their own.

They may not charge fees for deposits or withdrawal as they'd need to be custodians to do that, but they can build in-app tools that generate income for them.

Uber, Airbnb, think of them within your crypto wallet and much more.

So where does banking and trades come in?

As we know, crypto is decentralized finance, there's no need for physical banks to hold currencies and all that traditional shits.

But that doesn't mean that banks won't exist within crypto. Crypto wallets are effectively banks providing “secure access” to your assets. In addition, they offer flexible tools or call them features to facilitate “trades” with your crypto via their interfaces.

Fees may not exist on the first layer as that is the “chain layer” and only miner fees exist there, but a step forward and these businesses could deploy micro-fees structures that will generate billions of dollars revenue yearly.

The fundamental design of crypto with blockchain technology makes way for an economy fuelled by businesses of “channels.”

Traditional banks could be rekt if they don't evolve and web3 channels would become powerhouses for businesses while holding managing rights to zero assets, virtual or physical.

Great times are ahead for the business world.