Paradigms of Web3 Consumer Applications and Theoretical Considerations for Investment

Web3 consumer applications refer to software applications aimed at consumers that possess Web3 characteristics. Currently, there are three common paradigms of Web3 consumer applications:

1. Utilize the technological characteristics of Web3 infrastructure to optimize traditional consumer application issues.
2. Utilize encrypted assets to design new marketing strategies, user loyalty programs, or business models.
3. Fully serve Web3 native users and address the unique pain points of this group.

Each of these paradigms has its advantages and challenges. For example, the first paradigm can provide extreme privacy protection, but it is difficult to design a sustainable business model. The second paradigm can reduce customer acquisition costs, but it is prone to introducing speculative attributes. The third paradigm can quickly find product-market fit, but has a longer development cycle.

The investment evaluation of Web3 consumer applications mainly approaches from two aspects:

1. Product Operation Data Analysis: Includes user data ( such as active user count, growth rate, retention rate, etc. ) and conversion data ( such as AUM, user spending, etc. )

2. Team Assessment: including technical strength, market sense, and resources

Successful Web3 consumer applications should be able to generate ongoing revenue while maintaining token prices.

The "application factory model" may be a more deterministic business strategy, which involves continuously experimenting and developing various products, with the market choosing the successful direction.

The next successful Web3 consumer applications may emerge in three paradigms:

1. Utilize KOL influence to achieve a cold start
2. Winning the market directly through product strength
3. Business Model Innovation ( such as Sharing Economy Thinking )

The categories most likely to find product-market fit include: Web3 social applications, on-chain trading tools, payment applications, and DeFi products.

Overall, Web3 consumer applications need to balance innovation and sustainability, addressing user pain points while building healthy business models.