The Web3 ecosystem can be broadly divided into three: 1) the use case layer—comprises user-facing decentralized applications (dApps) and projects; 2) the access layer—comprises dApp browsers and wallets to hold the tokens required to interact with the Web3 ecosystem; and 3) the infrastructure layer—comprises the blockchains (layer-1), scaling solutions (layer-2), and developer tools required to build applications on the blockchain. 

Overall, over 60% of all the startups in this industry were at an early/seed stage as the industry continued to focus on developing user experience and the technical infrastructure needed to bring Web3 to the masses. As a result, the infrastructure layer also accounted for the most number of startups within the Web3 ecosystem. Most disruptors across the use case layer operate as decentralized autonomous organizations (DAOs), where holders of the application’s native token are able to vote on strategic and operational matters of the project.

Incumbent activity was seen across the access and infrastructure layers. In the former, established cryptocurrency exchanges such as Coinbase and Binance are offering Web3 wallets and dApp browsers to engage with the Web3 ecosystem. The infrastructure layer had the most incumbent activity. This was notably among Big Tech companies such as Microsoft and Google, who provide the required infrastructure and tools such as nodes for developers to build Web3 applications.