Network Effects, Moats, & the Business of web3
web3 with a16z crypto
Competition and Cooperation in Web3 Platforms
In Web3 platforms, there is a mix of competition and cooperation among various players. Core infrastructure is entirely comprised of platforms, fostering collaboration between entities like wallets, NFT trading platforms, and users. The integration process is faster and smoother due to the abundance of public APIs. New entrants and substitute products can easily appear, creating a threat of network migration to competitors known as a vampire attack. While vampire attacks promote healthy competition, community cohesion acts as a defense mechanism. The complex dynamics of Web3 offer a fine balance between competition and collaboration, with network effects playing a crucial role in shaping the ecosystem.
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