As crypto and blockchain technology gain more attention among regulators, many are asking, “What are some use cases for the industry beyond making money?” all in an effort to define why it exists in the first place.
To help keep track of these use cases, Polygon Labs last month released The Value Prop, a database of the various ways web3 can be implemented. The company now has 430 total projects across 42 use cases and nine verticals, Polygon Labs exclusively shared with TechCrunch+.
Polygon Labs has been working on an initiative to provide regulators with this type of information. In June, the company wrote in a blog post that it built the database to show various ways web3 can be used in order to answer some of these questions.
Often, when people think about crypto, they immediately associate it with “get rich quick” scenarios. Just think of meme coins pumping (and later dumping) and the hype around NFTs.
The 2023 Economic Report of the President looked at blockchain technology and even reviewed three use cases: Walmart Canada and using blockchain technology with its supply chain; decentralized wireless network Helium; and NFTs and virtual real estate. The takeaway from the report was that those have “demonstrated only limited, if any, economic benefits so far.” But it also acknowledged that proponents still claim that the technology could find productive uses in the future as companies and governments continue to experiment with it.
This is something that has been stressed in the past by regulators in D.C. when talking about crypto or blockchain technology during hearings. Polygon’s database could potentially help them keep track of nonfinancial use cases in an easier way.
“People have seen some of the less than great applications of blockchain technology,” Rebecca Rettig, Polygon’s chief policy officer and legal officer, told TechCrunch+. “This is meant to be a broader educational tool, not policy specific. Obviously we want policymakers, too, but it’s used all over as an educational tool to turn the tide to understand what blockchain really does.”
Polygon Labs hopes the database becomes an “open and transparent” way for well-seasoned industry players and people outside the ecosystem to get a greater understanding of blockchain technology and how some businesses are using it.
But it’s not just new startups that are tackling various web3 use cases. For example, Zero Waste Foundation is building a “proof-of-environmental-work” protocol to track waste and encourage recycling. Warner Music Group launched an accelerator program to onboard musicians through the blockchain and decentralized applications on Polygon’s layer-2 blockchain. And the Cofund aims to combine real estate investments with blockchain technology. They’re all included in the database as well.
While this is just a handful of companies using the technology, it could potentially clear the way for other startups — both inside and outside of the ecosystem — to follow their lead or implement similar initiatives. Providing these instances could help accelerate adoption and innovation.
With all that said, capital flowing into the sector fell for a fifth consecutive quarter to $2.34 billion in the second quarter of 2023, according to PitchBook data. The decline could be attributed to a handful of elements, including regulatory headwinds in the U.S., lower valuations resulting in smaller checks, and opportunistic entrepreneurs leaving the space as the crypto market continues to be down from all-time highs. The crypto industry is in a need of a shakeup to revive funding inflows; bringing in outside investors and new businesses could help turn things around.
In the long-term, Rettig expects nonfinancial use cases to proliferate more rapidly than financial use cases. “It has happened in prior bear markets as well, as people emerge with new ways to use the technology,” she said. “The deep interest in it from not just major brands but non-crypto companies — we’re going to see more interesting and impactful nonfinancial use cases in the next six months to a year.”