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B. G., Opalesque Geneva for New Managers: In the internet world, the Web2 era, which started this side of the century, has created much anxiety and complications over data and privacy. Web 3.0 is an alternative that is becoming popular because it puts the internet's power back into the hands of end users. And Web3 companies are becoming a part of many portfolios as they offer promising growth.
Disconnect between market valuations and intrinsic value
The early internet offered users minimal control, limited to reading and writing, according to Evgeny Gokhberg of Re7 Capital. Web3, as an evolution, empowers users with greater control over their data and value in a decentralised, censorship-resistant ecosystem fostered by open-source collaboration. Compared to Web2, Web3 allows for faster innovation and higher profit margins through direct, middleman-free interactions. Although Web3's active user base remains small (comparable to the internet in 1999), its growth trajectory is promising.
Since 2008, Web3 has leveraged existing technologies to build new applications. Currently, there is a disconnect between market valuations and intrinsic value, presenting a turning point for growth-stage companies trading at seed valuations. This liquidity mismatch between private and public sectors offers a unique opportunity before crypto's broader institutional adoption, potentially fostering sustainable growth across industries like gaming.
Evgeny Gokhberg is the managing partner and CIO of Re7 Capital Ltd, a London-based research-driven digital asset investment firm he founded in 2021. He will present his views on Web3 opportunities in the next Opalesque Investor Workshop webinar on 27 November (details below).
With over 14 years of experience in investment management and blockchain technology, Gokhberg has navigated three market cycles, building a keen understanding of market mechanics and the ability to separate signal from noise. In 2021, Re7 launched a DeFi yield-based market-neutral fund, setting a new standard in risk-managed, DeFi-driven yield generation.
Two years later, Re7 launched the Opportunities Fund, addressing a structural gap in the digital asset space by investing in high-potential, post-venture stage liquid tokens. Leveraging proprietary intelligence tools, the fund focuses on thematic secondary market strategies, primarily targeting projects with market capitalizations under $5bn and is colloquially named a 'Liquid Venture'. Since its launch in May 2023 as a USD Cayman-domiciled fund, though the performance numbers express volatility month to month, the Opportunities Fund has more than doubled its NAV by capturing alpha across six macro sectors with some selective private deals capped at 15% of the portfolio.
What Web3 is
Web3 is being touted as the future of the internet, as a blockchain-based web that would include cryptocurrencies, NFTs, DAOs, decentralised finance, and more - basically using blockchain to change how information is stored, shared, and owned. Web3 follows Web1, the beginnings of the Internet in the 90s, and Web2, the era of social media, centralisation, the sharing economy and influencers.
"In theory, a blockchain-based web could shatter the monopolies on who controls information, who makes money, and even how networks and corporations work," according to the Harvard Business Review. "Advocates argue that Web3 will create new economies, new classes of products, and new services online; that it will return democracy to the web; and that is going to define the next era of the Internet." However, remaking the web is a major undertaking, and blockchain faces significant technical, environmental, ethical, and regulatory hurdles. Sceptics say that Web3 is already facing speculation, theft, and privacy problems, and it is veering towards centralisation rather than decentralisation.
But Investors are excited about Web3. This year alone, VCs, PEs, hedge funds and ETF houses such as Brevan Howard, Uncorrelated, Hack VC, BR Capital, ETC Group, VanEck, Morgan Creek Digital, MV Global and Borderless Capital have funded the movement. Venture capital funds invested over $659m in cryptocurrency startups in September, a 3% increase compared to August. And institutional investors believe the digital asset class, which includes Web3 components, is set to become an inevitable staple in their portfolios in the future, what with rising investments, increasingly mature blockchain technology and digital security infrastructure, ongoing efforts to achieve global regulatory clarity, and digital innovations.
The most common Web3 investment options are stocks, cryptos, and NFTs. However, less popular investment methods exist, such as angel investing or buying into a crypto company's IDO (Initial DEX Offering) or ICO (Initial Coin Offering).
Artificial Intelligence (AI) is not considered part of Web3 but the convergence of AI and Web3 presents a unique technological synergy that seems like a match made in heaven, reports fueled.com. The amalgamation of AI's ability to learn, predict, and automate with the decentralisation, security, and user-centric ethos of Web3 is opening up exciting new possibilities.
Upcoming webinar:
Investor Workshop - Beyond Blockchain & Bitcoin: How Re7 Capital Finds Real Value in Web3
In this webinar, Evgeny Gokhberg will discuss:
1. Understanding Re7 Capital's Web3 Tech Cycle Framework: The current state of the crypto market and why we're entering a "golden age" for Web3 investments
2. Re7's approach to identifying high-potential projects in the post-venture stage of growth and insights into investment strategies that set Re7 apart in the market
3. Case studies of successful investments, including Across and Neutron
4. How Re7 proprietary risk rating system and real-time position monitoring allow for smart contracts analysis and over 500 protocols monitored in real-time
5. How Re7 five layers of risk assessment and mitigation safeguard investor capital in a volatile market.
Don't miss this chance to learn how to navigate and benefit from the next wave of Web3 adoption!
When: Wednesday, Nov. 27th at 11 am ET
Free registration: www.opalesque.com/webinar/#uw1
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