Web3 was the talk of the market three years ago. Now, the volume of that conversation has softened to a whisper. But that doesn't mean there aren't opportunities for Web3 to disrupt technology in a number of ways. This digital steamroller may be delayed, but it also looks unstoppable.
The companies building the foundation of Web3 are where I think there are opportunities today, and investors should start by looking at Coinbase (COIN 1.42%), Unity (U +1.33%), and Amazon (AMZN 1.74%).
1. Coinbase
The most obvious Web3 stock is Coinbase because of its exchange and infrastructure business on blockchains. Whether you think the future of Web3 is trading tokens or NFTs, or validating transactions on blockchains, Coinbase plays a role.
Where I think its role in Web3 gaming gets really interesting is the way identity solutions could play a role. Coinbase Wallet and the MPC wallet that lives within the Coinbase app are the most likely places gamers will log in to games. These wallets will hold assets like NFTs that unlock assets in games or show ownership of digital goods.
Let's not overlook the role the USDC token may play in Web3 as well. It's fun to speculate about crypto tokens that could be the mediums of exchange for Web3 transactions, but I think it's more likely that a stablecoin like USDC is what people will use for transactions on low-cost blockchains like Solana. Coinbase generates revenue from the USDC token's interest-generating assets and also owns a stake in Circle, which runs USDC, so there are many options for growth in a stablecoin world.
2. Unity
If Web3 succeeds, Web3 gaming will likely play a significant role. And that's where Unity could be a big winner.
The company makes the game engine that underlies most mobile games nowadays, and serves everything from the console market to Hollywood studios. If Web3 games become popular, it's likely at least some of them will be made using Unity's engine. It isn't the only name in the game but developers and digital artists love this engine for its unique combo of a mild learning curve and high-quality graphics.
The Web3 revolution could open up new monetization opportunities for Unity from smart contracts and NFT sales that could play a role in games built for the blockchain. No matter how you look at it, a new gaming market for Unity would grow its potential market and give it another opportunity to lead in another gaming paradigm.
3. Amazon
Blockchain networks need computing power to validate or verify transactions, and Amazon is one of the biggest validators out there. The Amazon Web Services (AWS) cloud computing service is what many validators and staking solutions use as infrastructure, and that doesn't seem likely to change anytime soon.
According to Amazon, 25% of Ethereum nodes run on AWS, and the platform helps run most major blockchains.
This may not be the demand source that drives Amazon's growth overall, but if Web3 grows over the long term, it will also increase the size of the cloud computing market in which AWS is competing for market share. Thus, the e-commerce giant benefits from the Web3 vision's computing needs in several ways.
Web3's untapped potential
I think we're just starting to see the potential for Web3 to disrupt gaming, payments, and identity solutions that have long been dominated by big tech companies. The online future is personalized and decentralized, giving consumers and content creators more control over the digital publishing process. If blockchains and Web3 succeed in gaining adoption, Coinbase, Unity, and Amazon should be among the biggest beneficiaries.
