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Giant bunnies dressed in trendy outfits located next to cartoon characters with rainbows pouring out of their mouths lined the streets of South by Southwest (SXSW) last year. This is because two nonfungible token (NFT) projects — Doodles and Fluf World — dominate SXSW 2022.
However these projects were nowhere to be found at SXSW 2023, indicating a lack of interest in this year’s NFT. This should come as no surprise. With crypto prices falling, coupled with declining NFT prices and trading volumes, very few projects seem to be focused on digital collectibles. In contrast, SXSW 2023 is ruled by major brands and consulting firms that pride themselves on Web3’s promise.
Brands discuss Web3 strategy at SXSW 2023
Avery Akkineni, president of Vayner3 – a Web3 consulting firm founded by Gary Vaynerchuck – told Cointelegraph that Web3 is moving beyond its new moment and towards strategic implementation, which is why technology has become a hot topic for business leaders at this year’s SXSW. He says:“Web3 technologies have the potential to disrupt many industries, from finance to healthcare to social media, by enabling systems that are more secure, transparent and efficient. This increased interest in Web3 is significant because it signals a shift towards the next age of the Internet, which is more immersive, personalized and user-owned.”
Akkineni adds that he believes every brand should take the time to understand Web3 and strategize for it. “Brands will leverage Web3 in a variety of ways, from creating community-owned channels to implementing blockchain-based supply chain management systems,” he said.
To put this in perspective, Vayner3 and cryptocurrency exchange Coinbase hosted a lunch during SXSW which included a panel discussion titled “Web3 and the future of customer engagement: How brands can stay ahead of the curve.”
Rachel Weiss, vice president of L’Oreal Bold Ventures—L’Oreal’s strategic venture fund—stated during a panel that Web3 enables the beauty industry to allow “beauty ownership.” He says:
“What does Web3 mean for the new creator economy around beauty? What new expressions will be built around beauty using these new technologies? And what is it like to be a fan of a brand? These are all things that I think will empower Web3. And it’s going to put what we’ve created at Web2 on steroids in a new way to engage for the next generation of beauty consumers.
It’s important to note that Bold Ventures recently announced an investment in Digital Village, a US-based startup that helps brands create digital identities and assets in cyberspace. Additionally, NYX Professional Makeup, a subsidiary of L’Oreal, integrated into The Sandbox last year to feature voxel makeup looks on avatars, adding to the concept of consumer ownership.
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But while Weiss expressed excitement about Web3’s potential to transform the beauty industry, David Lee, head of Samsung Next, pointed out during the discussion that the company and Samsung’s portfolio partners are still waiting for a “ChatGPT moment” to overtake Web3. He says:
“I think ChatGPT is an interface that people are just starting to understand, but that’s after years of basic research, marketing and experimentation. I think the same thing is happening right now. We’re seeing a lot of experimentation, especially among brands, to engage in Web3. But I don’t think we’ve found that ChatGPT moment yet.
However, this obviously hasn’t stopped companies from getting involved in Web3 activities. For example, Coinbase has a large presence at SXSW, with a heavy focus on its recently launched wallet-as-a-service, or WaaS, product.
Leonard Law, product lead for WaaS at Coinbase, told Cointelegraph that WaaS is aimed at solving one of the key points for adoption: wallets. Law noted that WaaS was important to feature during SXSW due to Web3’s large presence. “WaaS at SXSW is all about connecting the right technology with the right brands and helping these brands build strong, direct relationships with their customers,” he said.
Law outlines that WaaS makes the process of onboarding a Web3 wallet simple for end users, as a username and password are the only elements needed to gain access to Coinbase’s Web3 wallet. “Simple onboarding will reduce barriers for users to connect, which will open up the Web3 experience to many people.”
A number of official SXSW 2023 panels also focused on Web3 initiatives. For example, there’s a featured session titled “Building the Open Metaverse” which includes a conversation with Timmu Tõke, CEO and co-founder of Ready Player Me — an avatar platform focused on interoperability.
Following the panel, Tõke told Cointelegraph that the metaverse is an important part of Web3 because so many people spend time in virtual worlds. He explained that brands are interested in having a presence in the metaverse. “We’ve seen people make billions of dollars a year selling virtual assets in games, or in the metaverse. Web3 plays an important role because it enables a series of technologies that allow consumers to finally own their virtual assets,” he said.
Small but focused NFT presence
Tõke said that NFTs are likely to play an important role for Web3 platforms to enable consumers to own digital assets. He shares that brands have become cautious about launching NFTs due to current market conditions: “They don’t want to associate their brand with something that is seen as declining in value or popularity. We saw this mindset during market crashes, where a lot of brands told us they liked the metaverse concept but didn’t want to get involved in NFTs.”
Nonetheless, Nicole Behnam, founder of marketing agency Beyond Media, told Cointelegraph that while not many people were talking about NFT at SXSW this year, the community still came together because of the previous NFT hype cycle:
“Community and existing NFT collections still feature events, activations, and panels for holders. We’ve been talking about utility for some time, and we’re finally starting to see which team is following through.
Natasha Hoskins, co-founder of the decentralized social autonomous organization (DAO) Boy’s Club, told Cointelegraph that DAO is interested in how Web3 technology can be applied to real-life experiences. He explained that Boys Club is launching a physical and digital NFT drop with Boys Club Zine, the group’s magazine.
“The conversation around NFTs has matured from PFP [profile pictures] to one around practical, functional utility. It is less flashy and, therefore, less noticeable in noisy environments, but these changes are important for NFTs to become credible integrations into everyday applications,” said Hoskins.
Passion for Web3 regardless of market conditions
All things considered, it’s worth noting that Web3 has such a big presence at this year’s SXSW, given the current market conditions combined with the Silicon Valley Bank collapse that occurred on March 10 — the first day of SXSW 2023.
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Tara Fung, co-founder and CEO of development company Web3 Co:Create, told Cointelegraph that the mood at SXSW eased for the first two days:
“Personally, I find it difficult to be present and engaged as we grapple with questions about where most of our operating capital is and whether we will ever get it back.”
However, Fung noted that on March 12, news broke that Silicon Valley Bank depositors would be protected, which changed the SXSW environment. “We are starting to see more of the euphoria and buzz that SXSW is famous for,” said Fung.
Regarding the crypto bear market, Law explained that developers view bear markets as a great opportunity to build: “This is what continues to drive a lot of excitement in the space.”
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