The loudest conversations around Web3 in 2021 were about NFTs — applications built on top of blockchain infrastructure. But conflating Web3 with NFTs is like conflating the internet with a single website. The more interesting story in 2022 isn’t what’s being built on Web3. It’s the infrastructure being built beneath it.
And that story looks meaningfully different from the speculative headlines.
Web3 as Infrastructure, Not Hype
The global Web3 market is valued at approximately $3.2 billion in 2022, with projections for continued growth. But that number isn’t primarily driven by NFT speculation — it reflects genuine, sustained investment in decentralized protocols that could fundamentally reshape how the internet is architected.
The Web3 vision at its core is architecturally compelling: an internet where users own their data, where intermediaries become structurally unnecessary, where tokenization enables economic models that weren’t previously possible. These aren’t fringe ideas — they’re serious technology propositions being worked on by serious engineering teams across the world.
The question worth separating from the hype is not whether decentralized infrastructure has merit — it’s how mature that infrastructure currently is.
The Honest State of Web3 Infrastructure in 2022
What becomes clear when examining the technology stack closely is that Web3 infrastructure, for all its promise, remains genuinely immature across three critical dimensions:
- Scalability — Layer 1 blockchains like Ethereum still struggle with throughput and transaction costs at scale. Layer 2 solutions are progressing, but the gap between current capacity and what enterprise or consumer-scale applications would require remains significant
- User experience — Wallet management, private key security, transaction confirmation flows — the UX of Web3 applications in 2022 is roughly where mobile internet was in 2005. The technology works, but it doesn’t yet work easily
- Regulatory clarity — Across virtually every major market, the regulatory framework for blockchain-based assets, protocols, and applications is still being written. That uncertainty shapes what can be built and how it can be deployed commercially
The gap between the vision and the current reality is substantial. That’s not a reason to dismiss the space — it’s a reason to be precise about where in the stack the genuine opportunity sits right now.
Why Infrastructure Beats Applications in This Cycle
There’s a useful historical pattern that applies directly to this moment. In every major technology platform cycle — the internet in the late 1990s, mobile in the late 2000s — the infrastructure layer matured before the application layer could scale. The companies that built foundational infrastructure during those early, uncertain periods captured disproportionate long-term value, even when individual applications came and went.
The same dynamic appears to be playing out in Web3. With application-layer maturity constrained by infrastructure limitations, the more durable strategic position in 2022 is at the infrastructure layer — Layer 1 protocols, Layer 2 scaling solutions, decentralized data and storage, and identity frameworks.
Infrastructure enables others to build. Applications depend entirely on infrastructure being ready. In a cycle where infrastructure is still catching up, that dependency is both a constraint and a roadmap.
The Selective Exploration Principle
For technology leaders navigating Web3 investment decisions, the framing worth considering is deliberate selectivity — focusing on applications with demonstrable utility rather than speculative potential, and prioritizing infrastructure understanding over application-layer bets.
That doesn’t mean avoiding Web3 entirely while infrastructure matures. It means understanding the stack well enough to distinguish between what’s genuinely ready for production use and what requires another 2–3 years of foundational development before it can deliver on its promise.
The organizations building that understanding now — even without deploying significant capital — will be far better positioned when the infrastructure catches up to the vision.
What This Means for Founders Building in Web3
The strategic positioning question for Web3 founders in 2022 is worth thinking through carefully. Infrastructure builders — those working on Layer 1 improvements, Layer 2 scaling, decentralized identity, or data availability — are in a structurally stronger position than application builders whose success depends on infrastructure maturity that doesn’t yet exist.
The useful frame: infrastructure enables others to build; applications depend on infrastructure being ready. In a market where the foundation is still being laid, the closer a product is to that foundation, the more defensible its position.
Where do you see the Web3 infrastructure stack making genuine progress — and where does the gap between vision and reality still feel widest? Let’s keep learning — together.
harish.balasubramanian 
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