The advent of Web3 has enabled innovation and change that extends far beyond cryptocurrency trading and NFTs. With the potential to become a major force for social impact, Web3 technology enables blockchain-based projects to solve real-world problems and make a difference.
Innovative Web3 Columns arose to help address some of the pressing issues facing communities and society at large today.
GameFi has become one of the fastest growing segments of the Web3 industry, accounting for about half of blockchain usage based on January 2023 data from DappRadar. Combining gaming with finance to create new ways to generate income Through Play-and-Earn (P&E) gaming, the GameFi movement has become most popular in Southeast Asia, as financially disadvantaged communities play NFT games as a way to earn extra income. More than 23% of the population of Vietnam and the Philippines has been reported to have participated in P&E Games, a region where the minimum monthly wage is only US$300.
Taking a step to create social impact even further, the Digital Entertainment Assets (DEA) company that operates the popular PlayMining GameFi platform, is also redirecting its platform profits for social good. They participate in various charitable initiatives such as an ongoing agricultural project in the Philippines and a recent food campaign in Indonesia organized in collaboration with YGG SEA, the Southeast Asian branch of Yield Syndicate Games.
The Japanese national newspaper recently published an article focusing on the potential impact of artificial intelligence and Metaverse games on society. DEA Co-CEO Kozo Yamada said gameplay can “contribute to solving social problems” and explained how anyone, regardless of financial means, can easily borrow NFTs to get started in P&E games and share the income earned with owners. According to PlayMining, through their ‘scholarship scheme’, more than 9,300 NFT borrowers have earned more than $4.7 million from their top game JobTribes since December 2021, which some said supports their daily living expenses.
DeSci: Decentralizing Science for the Social Good
The Web3 space is also seeing a rise in DeSci (Decentralized Science) projects, where blockchain-based solutions are being used to solve some of the problems plaguing modern science such as finance, publishing, and copyright. The academic research industry has been stymied by a funding model that mainly supports widely publishable research with time-limited grants. This “publish or perish” pressure results in most research being focused on short-term projects that fuel media hype rather than less interesting work that is more important to society.
Blockchain-based funding models and IP-NFTs give DeSci the opportunity to turn this paradigm on its head by promoting fairer representation and empowering self-sustaining scientific communities.. A major driver of DeSci fundraising is Gitcoin, a platform that has enabled developers to raise nearly $73 million in funding for open source projects since 2017. Gitcoin uses squared funding, a system that uses a pool of assets to match community donations in a way Mathematically sound and democratic. Gitcoin founder Kevin Ooki explained that squared funding is “a way to push grant programs from a central grantee…to your peers in the ecosystem,” equating each grant with the level of respect you have in the community.
Once scientific research is funded, it can be directly tokenized as IP-NFTs, allowing NFT holders to get rewarded for licensing intellectual property.
DeFi and Ethical ReFi: “We [Web3] world”
Decentralized finance (DeFi) has become one of the most widespread uses of Web3 technology, with projects innovating to create new P2P financial products and services. Many DeFi projects target underprivileged communities in an effort to help these people access financial services through their mobile phones that they can already use in their daily lives.
However, DeFi has also faced criticism for numerous pumps, dumps, scams, and rugged pulls in the space. Ethical DeFi was created to address these concerns – by marrying the principles of Islamic finance, which prohibits unethical and exploitative business practices, to core principles of blockchain such as transparency and immutability.
Leading ethical DeFi platform MRHB.Network launched in December 2021 and is open to both the halal and ethical communities. Their offerings currently include a crypto wallet that blocks immoral currencies and protocols, an anti-NSFW NFT marketplace, and a decentralized commodity exchange where users can partially obtain gold and silver (gold and silver tokens) redeemable from leading Australian bullion trader, Ainslie. MRHB is also benefiting from quadratic funding in its decentralized charitable platform (DePhi) which is set to launch this year.
A much newer movement running parallel to the DeFi space is Regenerative Finance (ReFi), which focuses on creating blockchain-based value estimations for natural assets such as forests and oceans, based on their use as carbon sinks. This provides financial resources to companies and individuals looking to reduce their carbon footprint by regenerating natural environments. Notably, Gitcoin is also a major player in this industry – in September 2022 alone, it helped nearly 1,500 public goods projects raise nearly $4.4 million in funding in just 15 days.
While 2022 saw a number of failures that crashed the markets leading to a prolonged crypto winter, it was also the year that social impact movements and projects began to be taken seriously as a force that could make a real societal difference in the world, which will hopefully lead to continue to grow.
Subsequent Web3 innovations such as GameFi, DeSci, DeFi, and ReFi in solving real-world problems made their first appearance in Coin Edition.