By Amardeep Devadason, SVP and head of global brand solutions at RRD Go Creative
We are witnessing a revolution in the world wide web, as Web2 transitions to Web3, the real to the unreal, centralised to community. This emergence of a new web, built on Blockchain technology, is creating an open space where the entire ecosystem of creators and consumers can participate, bringing with it never-before potential, innovations, and adaptation. And for marketers, it is a veritable greenfield opportunity, free of the constraints of traditional, business-centric web structures.
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Web3 promises to establish a more decentralised, secure, and transparent marketplace, one in which users have greater control over their data and can interact with each other without the need for intermediaries. This means they will have the flexibility to opt-in or opt-out of targeted advertising, potentially harkening the end of third-party tracking and compelling brands to move towards more privacy-compliant marketing practices. In this environment, the next logical step for businesses is to embrace Blockchain technology as a first step to effectively using the Experience Internet to create value in an Ownership Economy.
Companies across retail, gaming, banking, IT, and entertainment have already staked a claim to this space, offering Web3 solutions or backing Web3 solution providers. Meta, for example, is applying for trademarks that cover crypto tokens, wallets, and crypto exchanges applications; Google’s cloud unit has created a new Web3 unit to support Blockchain developers, while Microsoft is mentoring Web3 start-ups. The potential for Web3 to disrupt business and life is limitless and nowhere is this more apparent than in the Middle East and Africa (MENA) market.
Middle East and North Africa: the next frontier in Web3 economy?
Belying its small size, MENA was one of the fastest growing crypto markets in 2022. This bullish activity in an otherwise lukewarm global market is a ringing endorsement of the region’s desire to embrace innovation and lead the charge in the next stage of digital economy evolution.
Doubling down on its commitment to diversify from an oil-based economy, MENA is showing great urgency in attracting Web3 solution providers by investing in infrastructure, improving awareness, and establishing a clear regulatory framework. Governments and Central banks have already laid the groundwork to foster digital communities and enable the secure trading and buying of crypto across the GCC. The Dubai Government has even announced a Metaverse Strategy aimed at making it one of the top 10 Metaverse economies in the world. If this strategy succeeds, the Web3 sector would have contributed $4 billion to its economy over the next five years and supported 40,000 virtual jobs by 2030.
In a similar show of intent, Saudi Arabia celebrated its National Day in the Metaverse, while the Central Bank of Bahrain (CBB) issued regulations licensing a Blockchain-based crypto exchange called, ‘Rain,’ which allows users to buy, sell, and store cryptocurrencies.
What to consider when migrating from Web2 to Web3
Businesses and marketers in the Middle East that are keen to cross the bridge from Web2 to Web3 have their work cut out for them. At the very outset, they need to have in place:
- Data Storage: Change from simple data storage to decentralised data storage using Blockchain. Ownership of this secure and immutable data will always be with the user.
- Payment Gateway: Migrate to a Web3 library that interacts with the user’s wallet, request the user’s approval to interact with their assets, and allow them to interact with the deployed smart contracts. This decentralised currency will be the user’s doorway to DeFi (decentralised finance), Blockchain-based crypto apps, NFTs, and peer-to-peer (P2P) trading.
- User Flow: User interaction is much higher in Web3 than in Web2, with the user digitally owning the content and the tokens; therefore, it is important to make the platform easily navigable.
- Customer Focus: Enhance customer journeys by offering immersive experiences with Web3 and accurately analyzing customer experience across all touchpoints.
Since Middle Eastern countries have more open regulations and simpler legal frameworks, these transitions will be easier to achieve. For instance, Dubai’s free-trade zones (FTZs) are facilitating the growth of a virtual assets ecosystem while the Virtual Assets Regulatory Authority (VARA) is handling the licensing and regulations of the sector, making Dubai the first and only jurisdiction in the world to have an independent regulator for virtual assets
What’s next in Web3 in MENA?
Although governments are pulling out all the stops to create a favourable investment environment, MENA lags behind the major markets with just 14 per cent of the global market share. To compete more effectively, stakeholders have to make a more concerted effort beyond establishing favorable regulations. Importantly, there needs to be greater participation from value-added communities, and businesses that do not adapt to this community-based approach will risk getting left behind.
The good news is that Web3 companies in the region are already taking rapid strides in this endeavor, with Arts DAO, the largest NFT and Web3 community in the Middle East, providing hard wallet solutions for its members. With continuing improvements in infrastructure, public-private partnerships, and regulatory advantages, the MENA region is well-positioned to become a global Web3 hub and in due course, be counted among the movers & shakers.