Perspective Chapter: eCommerce in the Web3 Era

Abstract

eCommerce merchants anticipate adoption of cryptocurrencies in a vast scale in the coming years. While the concepts of Web3 are being adopted, business leaders and decision makers need to understand key the elements of Web3 and technological constructs behind the evolution of Web3. This study focuses on defining these constructs of Web3 and explain technological differences as compared to Web 2.0. Using extensive academic, industry, and online information, the study defines major characteristics of Web3, show cases early adopters, use cases, and opportunities in the area. Web3 is still evolving and there are many challenges which needs to be addressed. eCommerce businesses who are going to sustainably change the business models or disrupt with a new Web3 business is likely to succeed in the coming years. The findings of this study are also validated with an expert interview.

1. Introduction

85% of American merchants believe cryptocurrency will be a well-accepted payment method in the next 5 years [1]. While enabling an alternate method of payment and accepting cryptocurrency payment as a norm by 2026, these retailers also need to understand the underlying technology changes and impact to the businesses in their respective industries. The terminologies and concepts such as cryptocurrencies, metaverse, blockchain etc. are widely used by individuals and enterprises currently. However, most of them are using it without understanding the relevance in the Web3 world or misrepresenting the concepts.

The World Wide Web or simply known as ‘the web’ is the foundation of what we know and use as internet providing infrastructural support such as the website itself and enable application services such as an email or an eCommerce website, The web has evolved over the years from Web 1.0 to Web 2.0 and now to Web3. Web 1.0 had mainly unidirectional information flow such as the MSN news services provided to users, Web 2.0 involved more user generated content, centralized databases to manage these contents, and like Web 1.0 infrastructural support to these application services. While Web 3.0 was initially envisioned as an internet capable of acting autonomously without human intervention (semantic web), and the machines being capable to acting on a knowledge-centric model by which a better user experience was created [2], Web3 as being used currently is as technological form of advancement to Web 2.0. This chapter focuses on the architecture, application and uses cases of Web3, a concept that is still evolving and focusing on decentralization. However, generally accepted in current industry is Web3 as a natural evolution of Web 2.0 and as synonymously used with Web 3.0 as a terminology. All usage of Web3 (and Web 3.0) in this chapter relates to the decentralized web and not the sematic definition of Web 3.0.

Web3 is a seismic shift compared to Web 2.0 is terms of its nature of decentralized control. Web3 uses de-centralized control and ‘trustless’ security. The de-centralization is commonly known as the blockchain technologies and instead of a central authority to provide trust and security to the services, these technologies rely on distributed consensus. All interactions or transactions are available in the public and can be verified by any of the users. While Web 2.0 relied on providing users with relevant and dynamic content such as the social networks, the focus of Web3 is on applications which have relevance in peer-to-peer networks and programmatic approach to digital ownerships. Even by the usage of peer-to-peer interactions Web3 concept of decentralization is entirely different from distributed computing. The concept of distributed computing is well-researched, and highlighted benefits such as speed of operations, ease of execution, and similar efficiency gains using multiple nodes (or peers) [2]. The major differentiating factor is the centralized control in some manner for the distributed systems while decentralization avoids this central authority. Some of the most relevant applications of Web3 include Decentralized Finance (DeFi), cryptocurrencies, Non-Fungible Tokens (NFTs), and applications or services that fall under the universe of Metaverse.

Businesses and key decision makers need a focused and simple training on Web3 and related technologies. This chapter will look at evolution of eCommerce in Web3 focusing on the elements of blockchain, NFTs, and other arenas opened with a completely decentralized commercial space. While the concepts of Metaverse is gaining momentum, the chapter will focus on the infrastructure, economical elements, and market places these concepts bring in. The evolution of businesses to meet the changing environment, opportunities decentralized eCommerce brings, the challenges, and requirement of an ecosystem will be discussed. Use-cases such as NFT marketplaces, examples of successful businesses, and upcoming areas in the metaverse/Web3 area will be discussed in depth. The chapter focuses on clearly defining what Web3 is and how it is different in terms of what it has to offer, technological aspects, its relevance to eCommerce and how business leaders and executives should think about evolving the current way of operating. Industry publications, literature review and web publications on leading and relevant websites are main sources for this research. An interview with an industry leader (CEO of a Web3 platform company) is also conducted to validate the findings.

The chapter is structured in the following format. Research methodology is briefly discussed in the next section. Web3 is defined and along with the details of most used Web3 terminologies, a basic comparison with Web 2.0 technological elements is provided in the first section of the findings. Details of early adopters and select use cases are provided in the next section. The chapter then looks at the relevance of Web3 and changes it brings to eCommerce business ecosystem. Current known challenges are detailed in the next part. The findings from this study are validated with an interview with an industry expert. The next section covers the details of this interview. Conclusion and limitations of this study are provided in the last section.

2. Research methodology

This chapter explores the concept of Web3, which is relatively a new domain and still evolving in its nature and adoption across digital businesses. Since the nature of the study is perspective on an emerging area, a mix of exploratory research methodologies are used to reveal major structural constructs, which require proper definition and clarification for business and academic readers to understand the concept of Web3. Exploratory research is generally qualitative in nature and explores topics which are not generally researched in-depth. The topic of Web3 also falls under such category of topics due to its inherent nature and recent advancements. Since there are no preexisting knowledge and limited academic research, this study resorts to review of available academic research materials, published online articles, analysis of ongoing projects and eCommerce businesses, and knowledge of the author by participating in actual Web3 projects. Interview with an expert is used to validate the findings (provided in Section 8) and explore areas that require further research.

3. Findings

Based on the literature review, it shows there is no single accepted definition of Web3 and several constructs of Web3 is still perplexing to researchers and business adopters. This would generate challenges in the form of business adoption and developing eCommerce propositions around Web3. Moreover, the technological elements are still evolving, and a clear differentiation as compared to current Web 2.0 technologies need to be laid out. There are available published materials showing areas of adoption and several use cases. Based on the review of materials and available project discussion a basic methodology by which Web3 can be well discussed is as follows.

• Provide a proper definition and clarification on what Web3 stands for

• Clarify from a technological and usability standpoint how Web3 is different from Web 2.0

• Explore relevance for eCommerce, provide details of current domains of adoption and select use cases

• Define areas and users to further investigate the relevance to eCommerce businesses

• Explore current known challenges in adoption of Web3

The subsequent sections of this chapter detail the findings in this particular order.

4. What is Web3 and how it is different?

Web3 can be broadly defined as the digital infrastructure whereby the protocols and underlying technology elements (mainly blockchain) facilitates direct interaction between users and removes the need of any centralized agencies (or trusted intermediaries) to verify users or transactions [3]. Currently there are not many academic works that has studied Web3 in detail or provided a well-accepted definition. Liu et al. defines Web3 as an “era of computing where the critical computing of applications is verifiable” [4]. The three critical infrastructure elements as outlined for Web3 by these experts [4] include:

1. Smart-contract capable blockchains

2. Platforms that facilitate operations that are unable to be executed on the chains

3. Decentralized client applications with inter-operable features.

While using this definition, this chapter attempts to provide an easy-to-understand comparison with Web 2.0 infrastructure so that readers can understand how the concept of decentralization will impact technology elements that will drive the eCommerce business models. Table 1 provided below identifies some of the most used Web3 related terms and their definitions.

Terminology	Definition
Blockchain	A record book or public ledger that records all transactions and contracts in a secure decentralized manner. These records are public and can never be tampered with.
Ethereum and Bitcoin	Two popular blockchain technology networks. While Bitcoin processes transactions Ethereum can also support smart contracts. There are also coins that are used on these networks which are widely used cryptocurrencies
Fiat currency	Regular currencies we use – such as US Dollars, Sterling Pound, or Indian Rupee.
Cryptocurrency	A digital version of the currency in which all transactions are maintained in a blockchain.
NFT	Non-Fungible Tokens (NFTs) are digital assets that can be transacted (created, sold, or purchased). Transactions happen on marketplaces that are built on public blockchain networks.
Metaverse	A virtual reality space in which users can interact with other users (mostly in decentralized manner). Metaverse is a use case of Web3 concept providing realistic eCommerce marketplaces and 3D immersive spaces.
Marketplace	Decentralized networks that connect buyers and sellers directly and do not use a central authority. The marketplace is supported by smart contracts on a blockchain.
Minting	Process of turning a digital file into an NFT on a blockchain and stored in the decentralized database making it impossible to tamper with.
Smart Contract	A programmatic approach to creating rules or contracts that gets executed on the blockchain when called by a user or program.
Gas fee	Cost of completing a transaction on a blockchain. The operators (or nodes) who complete the execution of a smart contract on a blockchain gets paid this gas fee.
Wallet	An application that can access digital assets such as cryptocurrency, NFTs and allows storage, purchase, lending and borrowing on decentralized exchanges

Table 1.

Web3 common terminologies and definitions.

4.1 Architecture and technological difference: Web3 and Web 2.0

Users may only find a small difference while interacting with Web3 applications as compared to Web 2.0 applications. The notable difference will be on the sign-on service. Web 2.0 relies on the centralized platform to verify the user (such as using an email and password), whereas the decentralized applications use primarily a wallet or signer service which connects the unique address of the user (to verify all transactions) on blockchain. Figure 1 below shows the basic architecture of a Web 2.0 application.

Figure 1.

Web 2.0 basic architecture.

The database or the data storage captures all essential data for the application such as consumer information, details of transactions, or any activities of relevance to the business. For an application like a social network, it would include all user details and posts by the users, comments, likes, and so on. The database constantly interacts with the back-end business logic and updates the information. The back end of the application runs the core business services or logic. All actions corresponding to the expected behavior – such as what happens when a new user signup, makes a purchase, or writes a new post is managed by this engine. The front end of the business interacts with its users (normally called the User Interface (UI)) and defines the look and feel along with expected changes to the application interfaces. Users normally interact with the front end using a web-based browser, mobile application interface etc. This architecture helped Web 2.0 applications to evolve as Service Oriented Architecture (SOA), which basically improved the accessibility and providing the basic set of applications (common functionalities) using the inherent technological backbone [5].

Unlike centralized databases and control, Web3 relies on blockchains to build the applications [6]. Each of the blocks defines all the transactions and states and has strict rules on how it is transitioned in the next state. No central entity controls these blocks, and it is always maintained by multiple anonymous nodes on the internet. Like the backend logic of the application, developers create smart contracts – the logic that would run on the blockchain defining the state changes such as a transaction logic for transfer of a cryptocurrency from buyer to seller (wallets). Figure 2 describes the high-level architecture for a Web3 application based on the author’s understanding of how Web3 applications currently work. The users interact very similar to a regular Web 2.0 application, however there are no central entities to verify the users and users generally use a signer service like MetaMask or Coinbase wallet service that connects users to the applications front end.

Figure 2.

Web3 basic architecture.

Since the blockchain is public and state machines, anyone can deploy their smart contracts and hence it all works on the same shared public blockchains. The virtual machine executes the code on the blockchain to execute the code. The virtual machines are normally termed Ethereum Virtual Machine (EVM) as Ethereum is the blockchain that supports transactions and smart contracts. All related blockchains such as Binance or Polygon uses the same Ethereum blockchain as the architectural backbone. Hence, unlike the Web 2.0 application backend program, the method by which the logic is executed on Web3 applications is entirely different. However, the front end or UI remains almost the same. But the way in which the front end communicates with the blockchain is different. The services are provided by nodes that help front end interact with the blockchain and they are called the providers. Once the provider helps the front end connect to the blockchain, the application can read the current state of the blockchain and gives permission to write (make any changes) to the blockchain. These changes are signed in public by the application. By this process it ensures these transactions are captured and later cannot be refuted by the signing entity and this process runs without the requirement of a central entity to verify these transactions. As a summary, Web3 application will include an access layer (like a wallet or Web3 enabled browser), a use case layer (the front end or application such as a marketplace of decentralized financial service), an infrastructure layer (provider, virtual machine to run the logic, communication enablers etc.) and finally the backbone protocol layer (underlying blockchain).

There are other details specific to blockchain on how the signature process happens, how nodes accept each of the transactions, file storage within the blockchain etc. which are more technical in nature. Business leaders and Web3 users need to understand only the basic difference in technological infrastructure to identify new business opportunities, requirements to modify existing business operations, and understand the need to develop an ecosystem for users to directly interact with each other.

5. Early adopters and select use cases

Since the central entity does not own end-user information or does not even require the end-users to provide more information than necessary (like connecting their smart wallets) businesses does not require special methods for data privacy. The inherent nature of blockchains safeguards applications and users from hacking and other fraudulent activities. The wide-spread adoption of cryptocurrencies has augmented the swift progress of Web3. Some industries because of its inherent nature and acceptability of peer-to-peer transactions have become early adopters of Web3 applications. At the same time, Web3 has resulted in emerging concepts such as the creator economy and Decentralized Autonomous Organizations (DAOs). This section covers some of the notable use cases and industries of adoption. The examples also bring clarity to some of the terminologies currently being used synonymously with Web3 which are use cases, for example metaverse.

5.1 Decentralized finance

One of the industries with wide adoption of Web3 and having application of peer-to-peer transaction is financial services. The decentralized application in this sector is called Decentralized Finance of DeFi. DeFi is an alternate economy making use of public blockchain for financial transactions [7]. DeFi in conjunction with cryptocurrencies has led to more transparency, reduction in transaction fees, and more importantly can avoid intermediaries such as banks and clearing houses. Use-cases of DeFi itself varies across asset management, lending, derivatives etc. across the financial services. However, peer-to-peer lending and cryptocurrency-based transactions (across borders) are the widely used ones. All cryptocurrency projects broadly fall under the DeFi category and some of the new projects include POLYGON, SOLANA, CARDANO, CHAINLINK, AVALANCHE etc.

5.2 Decentralized autonomous organizations

An interesting aspect of Web3 adoption as compared to Web 2.0 adoption in early stages is not due to the characteristics of User Experience (UX) or ease of use from a front-end perspective, rather it is because of the blockchain features. The decentralized feature of blockchain initiated the idea of collective governance without a centralized authority and one of the best use-cases of Web3 is the DAO. Any governance parameter is dependent on the consensus of DAO members and smart contracts are used to replicate votes of DAO members this form of on-chain governance has gained relevance with Web3 adoption. Few of the notable examples include Uniswap, Decentraland, American CryptoFed DAO etc. [8].

5.3 Metaverse

Metaverse is one of the broadly used terminology in conjuncture with Web3 and is sometimes referred synonymously with Web3. However, metaverse is a boundless virtual world or a three-dimensional internet representing the real world as close as possible. Metaverse and the experience of the virtual world can be provided using Web 2.0 or Web3 features. Metaverse focuses on user experience and uses many of the Web3 feature applications. Creator economy (NFTs), peer-to-peer transactions, decentralized control, and multiple other features are applied to enable realism in the metaverse. Retailers providing virtual experience of the shopping, virtual real-estate experience, and projects such as the one from Meta (Facebook) to enable real life experiences on the web all fall under the category of Metaverse. Relevance to Metaverse in Web3 comes from the digital content it has to offer creating a marketplace for NFTs and smart contracts which are deployed on the Metaverse for peer-to-peer transactions. The virtual or augmented reality projects apply the concepts of Web3 in its transactions it is likely to be considered as the most accepted use case of Web3.

5.4 Creator economy

The creative industry including creators such as developers, artists, musicians, photographers, etc. uses Web3 for monetization opportunities. The creators can directly sell their artwork to interested buyers without any intermediaries. Web3 based businesses for creators focus on the artists and by enabling payments, licensing, intellectual property, storage, ownership, and digital asset management on the blockchain develop a value-based economy for the artists [9]. The digital assets are called the NFTs, and smart contracts are used on blockchains to track ownership of the NFTs. Any secondary sale of NFTs also result in monetary benefits to the creators. NFTs can also be used to incentivize community members, provide special access to events, offer exclusivity, and even provide business services. Marketplaces such as opensea (opensea.io) and foundation (foundation.app) are well used NFT marketplaces directly aligning buyers and sellers. NFT collections are also released by big corporations such as Coca-Cola, Adidas etc. for their branding, business activities and charity.

5.5 Blockchain gaming

Gaming on blockchain develops a new level of experience for the gamers. The next generation games provide play to earn opportunities, ownership of NFTs (such as for gaming avatars, skins etc.) and allow players to earn, lend, and trade financial assets such as cryptocurrencies or game specific tokens. This also develops monetization opportunities for the creators. The applications of Artification Intelligence (AI), Augmented Reality (AR) and Virtual Reality (VR) is extended by blockchains to create an economical environment in addition to the leisure benefits gaming provides [10]. Axie Infinity, Mobox, Upland etc. are blockchain based gaming platforms gaining attention.

5.6 Other areas

Multiple other areas of adoption of Web3 include real estate, remote workspaces, social media, digital infrastructure, privacy management, asset management and so on as explored by practitioners in the current Web3 space [11]. Other novel areas of application ranges from net zero (carbon emissions) tracking, automotive sales through immersive web experience, actual contracts being replaced by smart contracts, healthcare treatment, and treatment planning on metaverse and so on. The common features that make the use cases relevant are the decentralized governance, public record of transactions, and ability for any application to access, verify, and record transactions to the blockchain.

6. Relevance of Web3 in eCommerce

Any new advancement in technology creates two paths for existing businesses, a sustaining path, and a disruptive path [12]. The sustaining path include adoption of the new technology but maintaining the core business model while the disruptive path leads to an entirely new business model – either a new solution being provided to the user or disruption in the manner products or services are being delivered. The adoption of Web3 can also be analyzed using a similar framework. Value creating economies, removal of the need for central authority, and improved security and trust opens multiple opportunities and challenges to the existing business models. Like the Web 1.0 to Web 2.0 transition where most of the heavily used platforms and services suddenly lost significance, it is likely to see a similar transition with current eCommerce platforms.

Technology-enabled live shopping improves customer satisfaction and engagement in virtual and augmented reality as compared to regular online environment [13], which is a good case of how eCommerce business adopts a new technology to provide better experience. For example, a retail fashion store does not stop selling clothes, but the way consumers can try out the products without being at a physical store is an entirely new way of selling. NFT marketplaces, such as opensea (opensea.io) or foundation (foundation.app) has created an entirely new artist-centric business model dismantling the regular agency-centered art business models [9] – including art galleries who generally takes a large part of the proceeds. This is an example of disruptive change. NFT itself created a market size of over $20 billion in 2022 and is expected to reach over $211 billion by 2030 with a growth rate of 33.9% year or year [14].

Even though not a Web3 example, let us take the example of YouTube and Patreon. In YouTube, content creator must wait for the audience to watch the content and monetization is a function of elements such as watch time, physical location of viewers, ads being run etc. The monetary aspects are not known while something is being created. However, Patreon as a platform guarantees a revenue based on already subscribed users who are willing pay for the content from a particular creator. What eCommerce focused businesses need to understand is that the consumer base and the solution they find accessible are evolving. With Web3, solution providers gain advantage in multiple forms – such as avoidance of transaction fees, cost of implementing trust, lesser requirement of intermediaries to solve problems, accessibility to a global market, and lower risk of fraud.

Major retailers have applied the concepts of the virtual and augmented reality currently in their online businesses. However, most of these advancements in user experience does not currently use Web3 features. The retailers can easily implement options such as all virtual buying experiences including smart contracts and crypto payments etc. Similarly, Web3 has opened avenues for marketplaces (such as the ones for NFTs) for buyers and sellers to interact directly. Even though these marketplaces are centrally controlled (marketplace itself being owned by a single commercial entity), they avoid multiple other intermediaries and charge only limited transaction fees as compared to the legacy markets for these industries, like the art galleries. Similar opportunities exist for multiple industries ranging from agriculture, healthcare, oil & gas, travel & transportation and so on for the stakeholders to interact directly.

Another use case to apply new business would be to provide differential experiences. Ranging from concerts and sports events to application of Metaverse in complex healthcare procedures are some of the areas where these concepts have relevance. Overall, business which rely on their online presence must focus on either sustainable change as well as the new technologies opens up a wide variety on opportunities to eCommerce businesses.

7. Challenges in Web3 adoption

Analysis of currently available details of development and deployment of Web3 based applications highlights few major challenges that may impact adoption of these technologies. Even though not exhaustive some of the known challenges are listed below based on the author’s experience working on Web3 projects and available online/expert sources.

7.1 Evolving standards

Smart contracts are the backbone of Web3 based applications. There are multiple standards for representing ownership of fungible and non-fungible tokens on blockchains. There are multiple organizations and individuals working to improve, optimize, and reduce transaction fees (gas fees). We can evaluate changes to a few of the standards over the past few years. Ethereum Request for Comment 20 (ERC 20) refers to a scripting standard within Ethereum blockchain for fungible tokens (like currencies) and ERC 721 is a standard for non-fungible tokens. ERC 721A is an extension which allows multiple minting at the same time (an extension of ERC 721) to reduce gas fees. There are multiple other processes and standards evolving to optimize this space, such as lazy minting where the creator pays the gas fees and makes the artwork an NFT only when there is agreed seller and so on. The uncertainties and changing technological infrastructure would impact eCommerce platforms and users would expect the latest standards to be implemented and there are multiple studies calling for standardization of standards for the ease of use [15]. Web3 programming and standard adoption would be an ongoing requirement for all eCommerce initiatives in this space.

7.2 Centralization in the decentralized world

Even though the governing principle of all Web3 platforms is decentralization, the eCommerce platforms tend to still act as a centralized platform. For example, NFT marketplaces such as opensea (opensea.io) or foundation (foundation.app) stores all user details, NFTs and any associated transactions on their platform. Other platforms like wallet providers and exchanges also have ‘centralized’ control on users. The inefficiencies in the current Web3 architecture is causing the inevitable centralization in the decentralized Web3 world [16]. This can create any of the Web 2.0 related issues such as fraud, ownership issues, and centralized control of users. Moreover, most of the DeFi platforms allow users for decentralized transactions and apply a platform fee and perform their centralized control. While the underlying principles are strongly decentralized, each of these eCommerce initiatives still show a varying degree of centralized control and can be resolved only with platforms with total decentralized user networks being created (that can identify users without the requirement of a centralized agency).

7.3 Institutional adoption

A significant challenge posed for the blockchain is its energy inefficiency. Multiple miners (nodes) are running and consuming energy in a non-optimal fashion. There are studies showing negative impact on energy consumption and carbon emissions from increase adoption of blockchains [17]. This will continue a major challenge in adoption majorly for large corporations and individuals with environmental conscience. However, technological advances such as Proof-of-Concept (PoC) to Proof-of-Stake (PoS) (PoS being a consensus method allowing users not to spend as much energy as needed in the PoC stage) will improve the energy consumption [18]. Ethereum blockchain is moving to PoS stage in September 2022 which is expected to reduce energy consumption and hence significant gas fees reduction. If there are positive technological advancements, agreed standards, and governance mechanisms, we will see an improved adoption from an institutional perspective.

7.4 Public acceptance

Technological acceptance is a well-researched topic in the overall internet and overall Information Technology and Information Services (IT/IS) areas. There are recent studies [19] that have adopted this area research in the advanced technological areas such as augmented reality which may be very relevant in the metaverse and overall Web3 context. Perceived positive impact, novelty, ease of use, informativeness, usefulness, and enjoyment are some of the highlighted determinants of acceptance in the context of this study. The determinants might be a good start point for eCommerce businesses to analyze their service and check user acceptance.

7.5 Lack of an ecosystem

A business ecosystem (from a solution creator perspective) requires partners or providers of technology, ready to use applications or Software as a Service (SaaS), platform providers, legal and governing methods and so on. However, none of these areas have achieved significance maturity in the Web3 space mainly due to unavailability of talent, specialized tools, and even agreed standards as mentioned above. There are studies which highlight the importance of a business ecosystem with complex business environments and helps organizations with self-organization, emerge, co-evolve and adapt [20].

8. Validation of the findings

Most of the findings in the research are based on project experience, academic research, published online materials, and research reports. To validate the findings, identify any possible misrepresentations, and explore additional research areas, an in-depth interview was conducted with Vignesh Ramaswamy, CEO of Canvas, a Web3 startup with focus on creator economy and has personally gone through the entire journey from inception to launch of the company including securing of a good investment. The summary of the interview along with a comparison with the details explored in this study is provided below (Table 2).

Question	Response	Analysis
What is your role in the Web3 space?	An engineer turned media explorer and been building products for creative entrepreneurs for some time now. With the current startup, Canvas (Canvas.Space), building a micro monetization platform for creators where they can build interactions on any part of their content in crypto, fiat currencies or as NFTs	The respondent has experience in Web3 space as an eCommerce provider and has relevant technical knowledge to respond to the research objectives of this study.
What opportunities do you see currently in the Web3 space?	Creating a safe space for the creative entrepreneurs of today. A space where they are not pulled down by a centralized discovery system, which allows them a fair chance of building a sustainable lifestyle.	Respondent has highlighted one of the areas this study demonstrated as an early adopter in the Web3 eCommerce space.
What is your favorite blockchain or Web3 project?	The overall space of DAO is exciting along with the scope of game theories and personally love the current scope of a project like Polygon or what Meta is trying to accomplish.	DAOs was highlighted as an application area that emerged with blockchains. However, the study did not highlight relevance in this magnitude. Even a creative entrepreneur is emphasizing the importance of governance on blockchain.
Since Web3 is a seismic shift compared to Web 2.0, what is your suggestion to businesses using Web 2.0 as their current solution platform?	Do not force your way into Web3 due to peer pressure. If your current business line or some aspect of your existing plans or a new area which could enhance your overall brand by integrating with Web3, go ahead. Do not rush. You have a lot of time. This space is just getting started.	As highlighted in this study multiple times, the concept of Web3 is still in its nascent stage and evolving. The respondent highlights the importance of proper planning and adoption in the Web 3 space.
Which all domains are likely to be early adopters of Web3 technologies?	Real estate, social media, creator economy, art domain, memberships across domains.	The application areas except membership was discussed in detail. Respondent highlights this key application area of Web3.
With the de-centralized construct and closer touchpoints to consumers –do you think businesses will know about consumers better and improve the overall business models?	At this juncture, it’s too early. There are a lot of pieces of this Web3 puzzle which needs to be solved before we deep dive on this point. But, yes, it has a clear possibility and probability.	The study focused on elements of Web3 in relation with the application in eCommerce. The response from the expert clearly shows aligned in terms of what eCommerce business may achieve by Web3 adoption.
How will business broadly use Web3 technologies?	Enhancing security layers, interactions and in fact credibility	Enhanced trust provided by public ledgers in the blockchain is a critical element highlighted in this study.
How do you think a business ecosystem will evolve in the web 3.0 space – deciding on the technology, partners, regions of operations and especially end-user acceptance?	It’s going to take a while for the business ecosystem to evolve in this Web3 space. As we all know, the partner ecosystems, including technology, SaaS and other capabilities are getting developed as we speak.	This response is also inline with the challenges highlighted in this study.
Will the technical aspects of different public blockchains impact adoption of one of the other and if so, which public blockchain/s is/are probably going to drive Web3 business for the future?	Yes, it will. It has a higher probability of creating confusion to people who would adopt to one of them. Now, the way a blockchain like Ethereum has driven the creative business with NFTs, I am sure, there will be multiple projects which could coexist and set the road ahead globally. More like front runners, but with enough scope for everyone entering the space.	Acceptance of a particular public blockchain or a project was not well discussed in this study. A possible extension of this study can be analysis of specific blockchains, projects or technological elements.
What role does standards play for smart contracts and how having different standards will impact businesses? Do you see consolidation happening?	The rule of business is standardization. Any domain, for ease of governance, it will be good to have some skeleton. Personally, I do not have enough data points to converge on the consolidation now.	The standardization as mentioned is highlighted by the respondent as well. However, it does not seem there will be consolidation yet on the evolving standards.
What do you think are the major challenges impacting Web 3.0 based technology adoption?	Newness & complexity of the technology Sea of companies, terms getting thrown around, which creates confusion for people who are genuinely interested in being a part of this.	This study has attempted to clarify some of these challenges and provided inputs to business owners and key decision makers to better understand Web3 space and the applicable terminologies.
How do you think known issues as such energy efficiency, scalability, and efficient de-centralization of blockchains are going to be addressed?	I truly believe that we as humans always will figure solutions to anything through innovative ways. The challenges around energy efficiency, scalability is indeed critical, but a lot of us in this space are already aware about the challenge and are trying to come up with solutions. I am confident about some pathbreaking innovations which shall happen soon.	The response on energy efficiencies of blockchain and the related processes are inline with the expected efforts in the Web3 space and energy conservation.

Table 2.

Interview based validation.

Overall, the interview helps in understanding the focused findings of this study are inline with the thought process of experts in the area. However, the responses also show there are many areas unexplored in this study and provides scope for future research. Moreover, availability of more experts in this area may have helped to converge the findings of this study. It is suggested as a future research opportunity to explore the subject of Web3 from the perspective of industry experts from multiple industries and geographies adopting Web3/blockchain elements in their respective businesses.

9. Conclusion and limitations

Web3 adoption is expected to shape eCommerce business future and findings from this research shows a clear path and the application areas of Web3 concepts. While certain industries may have an inherent advantage due to the peer-to-peer nature of the business and have resulted in early adoption, the technological advancement through blockchains and smart contracts have resulted in entirely new business areas such as creator economy covering NFTs, DeFi using cryptocurrencies, new decentralized governance such as DAOs, and so on. It is important for eCommerce businesses and stakeholders to learn and apply these technologies in the backend as most successful businesses would evolve to adopt to Web3 from the current Web 2.0 technology stack. As the research finds, there are still evolving standards and similar adoption challenges in the industry which are actively been worked upon and researched. From large corporations to new startups will keep bringing changes in the overall outlook of Web3, but the benefits and overall defining features of Web3 such as decentralized control, public verifiable information, and ability to operate on transactions on the chains are going to stay and the benefits are going to improve (such as speed and cost of executing the transactions). It is hence imperative as a business leader and decision maker to understand these technological advancements and apply to their respective businesses.

Limited empirical research in Web3 is a major drawback while performing a detailed analysis on trends and opportunities Web3 bring in. This study used available academic research, industry reports, online published information from credible sources, and discussions with experts to derive the findings. Unavailability of multiple respondents to this study as expert respondents is another limitation of this study. Author acknowledges these limitations and there might be areas uncovered within each of the sections. However, the intention of this study is to provide business leaders and decision makers with an easy-to-use guide on Web3 technologies. The use-cases highlighted, and areas of research are all possible new research areas by its own which can be explored by other Web3 researchers.

Acknowledgments

Author would like to thank Vignesh Ramaswamy, CEO of Canvas.Space a Web3 platform supporting creator economy for the in-depth interview provided on his perspectives on eCommerce adoption in the Web3 space. Author would also like to thank his employer EXL Service (NASDAQ: EXLS) for supporting his initiatives in the Web3 space.