How Web3 is Driving Changes in Mobile Communication

The landscape of mobile communication is currently dominated by free-to-use apps accessible through platforms like the App Store and Google Play. Meanwhile, Web3 communication platforms like Vedoo are pushing the boundaries of what’s possible. In this article, we’ll examine the current state of mobile communication and explore the future role of decentralization in shaping new mobile communication economies.

From Premium to Freemium in No Time

A look at the price drop of apps in recent years quickly shows how the flood of new apps in the App Store led to a race to the bottom. From a premium price of $9.99, the price dropped to just $0.99 within a few years or became free altogether.

The freemium model had stolen the premium crown. With no entry barriers, it was a clear decision for most users to switch to free apps. Suddenly, premium apps that demanded an upfront payment had to switch to a different monetization model. As users flocked to free offerings, developers and providers soon realized they had to pivot or perish.

Freemium is Here to Stay

For mobile communication apps in Web2 and those powered by Web3, removing the upfront payment for a higher number of downloads has become the standard business model. Today, 90 percent of apps in the App Store and Google Play follow the freemium path as the quickest way to user acquisition. The motto "scale first, monetize later" holds true more than ever.

Whether it's apps for video chats, messaging, or social networking, eliminating payment hurdles makes initial app installations and subsequent in-app purchases much faster. This is currently the preferred route to market. But there is an exciting new development on the horizon.

Web3-Powered Apps Offer Additional Value

As blockchain technology advances, there is a growing group of users who want more than just great apps. They want real rewards for their efforts—digital collectibles they can keep, use, trade, or sell.

These factors, along with the real possibility of generating revenue, will entice traditional developers to experiment with Web3 apps and encourage more Web2 developers to explore Web3 integrations.

However, it's important not to be too hasty; while the mobile communication ecosystem has reached a maturity level—with around 3 billion people regularly using mobile communication services—sustainable and engaging apps based on Web3 are still rare. According to the latest Blockchain App Report from DappRadar, approximately 791,474 active wallets were used with Web3 apps over a three-month period. This number indicates that the industry is still far from maturity for developers and providers and shows explosive growth potential.

No Fun in the App Means No Long-Term Gains

The reason this hasn’t happened yet is that most Web3 apps have so far prioritized financial dynamics and the acquisition of often dubious digital assets over utility. While this worked well during rising markets—with speculators and value creators willing to put in the effort to make quick money—users and other stakeholders left the field and took their liquidity with them during falling markets.

Something had to change.

Vedoo co-founder and CEO Benas Baltramiejūnas said:"The problem with many Web3 apps is that they were not created with the user experience at the core. The economic structure came first. As markets changed, Web3 projects and everything associated with them left those who believed in them disappointed."

"At the same time, the problem with the current Web2 model is that even with truly engaging and immersive apps, the focus is on aggressively monetizing the existing user base. It’s a one-sided business where the IP owners and app stores reap the actual rewards, and users get nothing of real value. That said, I think we are now at a turning point."

The Beginning of Digital Content Ownership for Users

He continued: "In traditional mobile apps, the centralized processing of data means that all assets exist on the developer's servers. There is no real ownership of digital collectibles by the users and no easy mechanism to sell or trade these assets. But that’s about to change."

"Other frameworks are emerging where you have an enjoyable user experience and balanced digital economies where users are stakeholders in the system. If the user network is structured correctly, developers, users, and other user groups can be rewarded in ways that benefit everyone. Some participants may not even actively use the app but remain crucial to the network's functionality and success and should be rewarded for their contribution."

Users as Stakeholders

With decentralized networks like Vedoo, where mobile apps powered by Web3 are comparable to the best on the market, the main difference is that users become stakeholders with proportional ownership and voting rights, measured in V-Coins. These tokens are fairly and automatically distributed to all participants in the user network via their wallets.

Benas added: "When we compare current Web2 and Web3 apps on a comparable basis, it will become clear over time that it’s better for a growing number of people to be a user with ownership backed by the blockchain. The network-driven ownership effect means that greater user acquisition and faster scaling become possible, which is attractive for investors, developers, and user communities."

Ownership to Foster New Paradigms in Mobile App Publishing

According to a paper by the Mutuality in Business Research Team:"Psychological ownership is the feeling of possession over a target—an object, a concept, an organization, or another person—that may or may not be supported by formal ownership. Individuals invest in the target of ownership as an expression of who they are and what they belong to."

Transferring this idea to the world of mobile apps means that feeling invested in the target of ownership, supported by the possession of secure assets of real value, is most likely to drive the transition from Web2 to Web3 in mobile app publishing.

"It will take time and probably start with light integrations that bring the two technologies closer together, like a slow fusion," Benas said. "The real challenge for mobile app publishers is to avoid the debate between Web2 and Web3 altogether.

"In reality, good apps are good apps, and bad ones are bad. Web2 apps can be powered by Web3, but it requires cross-thinking actions. Web3 is the infrastructure beneath the surface that allows digital ownership, among other things, to become a widespread reality. Web2 developers can benefit from this.

"That's the goal, and we will soon reveal much more about how Vedoo will provide this new level of service, supported by Web3, for developers, self-publishers, and their users."