The value of research in web3

Conceptualising, designing, conducting, and implementing #research in #web3 is challenging. Just like many other domains, it is evolving, but a key difference is the speed at which it evolves. The evolution of web3 is still very much at a nascent stage, and the collapse of FTX, in all honesty, does not instill a lot of confidence. But understanding is key, and critical, in-depth understanding will set up anyone for success who is building in web3. This understanding comes from high quality research.

Quality research helps web3 builders and creators across all stages of their product / venture / company lifecycle, which includes:

• While contemplating or at the initial stages of entry

• Post-entry and while getting a foot in the ground

• Consolidating and gaining momentum

• At maturity, and looking for expansion or diversification

• While contemplating an exit or exiting

Research across the lifecycle increases the ability to use knowledge for impactful decisions, navigating a stage with confidence, have a strong understanding of your #product / service’s strengths and weaknesses, how it interacts with category and wider industry factors, and last but not least, providing you with insights to build optimum #pricing structures, #valuations and #commercial models.

Conducting research in web3 requires a mindset, which is constantly open to #change and continuous #innovation. The whole web3 landscape is like a giant testing platform, where #ideas and products are continuously being tested. A few of them survive these testing dynamics, while many fail. But learnings, #benchmarks, and best practices are developed through these continuous series of successes and failures. A core tenet of web3 research is to be able to chart for success but keeping open lots of avenues for exploration.

As the FTX debacle continues and 2022 comes to an end, confidence in #DeFi is very low. The problem lies with centralized finance, but in the absence of clear understanding and lack of knowledge, #DeFi will take an unnecessary hit. In reality, DeFi is acting mostly as it should, and not producing any significant contagion effects.

This panic in on-chain finance, coupled with the speed of evolution of web3 brings to the fore the importance of quality research. Research will help in reducing this uncertainty, and it will equip builders and creators with the confidence and knowledge to deal with it better, and leverage opportunities that arise. It will equally empower them with clarity to cut through the noise and focus on the aspects that matter.

Whether you are creating a new DeFi business, building tools that accelerate web3 onboarding, building #communities and #DAOs or creating #decentralized apps and services, research will play an important role. A few examples of strategic questions that research can address:

• How do I generate more visibility and awareness about my web3 venture / product / service?

• How do I create a differentiated value proposition and target institutional and retail audiences for my new lending protocol?

• How do I build an engaged community for my new decentralized suite of healthcare services?

• I have just started a DAO and want to understand the best governance models that I can use.

• I want to increase the liquidity of my community’s token by encouraging token holders to use their holdings for a variety of activities

• I run an extensive grant programme, and want to make the whole process of grant application evaluation to allocation more efficient, focused, and beneficial for the ecosystem

These are some of the many questions that require research to arrive at insightful and actionable answers. But identifying the needs for research is just the beginning of the journey. For any kind of research to be insightful and actionable, it needs to have depth and rigour.

In B Labs, we endeavor to position and differentiate ourselves on the comprehensiveness, depth, and rigor of the research we conduct. Whether through our detailed syndicated reports covering key topics of interest, or through our customized work for our clients, we strive to maintain the highest levels of quality in our work.

Our research approach adopts the following techniques / methodologies, and the way they are used depends on their applicability and value for the specific problem we are addressing:

• Qualitative research (1–1 interviews, focus groups, observations, ethnography, online and offline diaries etc.)

• Quantitative research (Probabilistic and Bayesian statistics, On chain analytics, Modeling of tokenomics systems)

• Desk / Secondary research

• Analyzing / bringing together different sources of existing data

• Audit of existing data sources

• Literature reviews

Again, web3 research is different. At B Labs we unlock the power of research with the following objectives in mind (amongst the many):

• Identifying innovation opportunities for web3 products and services

• Laying out #roadmaps for entire ventures or products and services

• Boosting community engagement and participation in web3 communities and DAOs

• Benchmark best practices in governance and treasury management

• Building strong and differentiated #brand value #propositions and #positioning

• Define, map and value the size of a potential market or segment

• Identify efficiency parameters for running a high-performance #grants programme

• Future scenarios in the evolution of specific DeFi domains

• Identify growth barriers and success factors of web3 products and services

• Define and codify data-driven strategic frameworks covering key domains of web3 businesses

• Providing research and proof of market fit through intensive focus groups, interviews, on-chain analytics, and ethnographic techniques

• Analyze community pain-points and governance structures through in depth qualitative techniques

The insights and recommendations we will share from our research will not treat web3 as a “Yes-No” or “Black-White” entity, but as a dynamic platform with myriad possibilities. As web3 rapidly evolves and develops, our clients need to have the solid backing of in-depth research to effectively navigate the landscape and zero down on the opportunities of interest. For example, using our research, a money market #protocol can innovate and expand its capabilities to become attractive to a broad set of #retail users and #institutional#investors. Another example could be of a crypto-focused #VC, who will find value in our in-depth research report focusing on the characteristics, key elements, and evolution of #stablecoins.

Web3 is known for its decentralized, transparent structure, and we seek to emulate it. At B Labs, our research ethos is centered on ethics, value, trust, integrity, and a promise of impact and effectiveness for our clients. We want to cut through the noise, to sharpen our client’s thinking and decision-making, with the aim of positively impacting their business. We believe in the combination of data and creativity, quantitative validation and qualitative exploration, and insights and actionability.

Let’s make this happen. If you have a strategic question that you feel needs research, please get in touch.