DApp Revolution : An Investigation into the Nature and Business Models of Web 3.0 Decentralized Applications

Abstract

In the early days of the internet, the main offered usability were read-only websites. The first generation of the internet, web 1.0, consisted of Encyclopedia-type sites where users could take part of content but not contribute in any way. Web 2.0, the next generation, has for many years now offered users the possibility of not only reading, but also writing. Users taking part in the content creation, on sites such as Wikipedia, have rapidly increased the amount of content, interactions, and value created online. The rapid growth has been accelerated by companies using platform business models (platforms), establishing themselves in the middle of the interactions to act as facilitators and lower barriers between users. Despite not performing any of the actual value creation, the platform business models enable the platforms to keep a lot of the value while keeping costs very low. Now, we are at the dawn of the new web 3.0 generation. One of the main technologies of this generation is the blockchain technology, which enables decentralized and transparent solutions. The blockchain movement has been viewed as quite ideologist, often claiming to give the power back to the users. While web 2.0 platforms monopolize the value created online, despite most of it being created by users, web 3.0 allows users to not only read and write, but also own. The technology has led to the development of a new type of interaction facilitator: the decentralized applications (dApps). This thesis investigates how the nature and business model of dApps compare to web 2.0 platforms. How are they similar/different? Starting off in a simplified version of the Platform Revolution framework, the focus lies on seven models: network effects, openness, architecture, monetization, governance, launch, and metrics. After testing the models on four dApps, we find that all the models need to be considered for dApps as well, but in adapted versions. Based on the considered blockchain characteristics, there is also a need to add two additional models: decentralization and tokenization.