Web3 Infrastructure Q2’22 Revenue Report

Key Insights:

• A number of Web3 infrastructure protocols are generating consistent revenue by providing useful services inside and outside of the Web3 ecosystem. The services range from storage to computation to wireless data transmission.
• As the bear market deepened, Web3 infrastructure revenue declined only 10%, indicating strong demand for these protocols’ services despite the 76% overall valuation drops.
• Although Web3 protocols may appear overvalued on a revenue basis, current valuations are more attractive than in Q1’22 given the potential total addressable market for each sector.

The Web3 industry is often criticized for not having any real use cases that go beyond its circular economy. This is just not true. Several Web3 infrastructure protocols provide useful services inside and outside of the Web3 ecosystem. They offer services including decentralized storage, compute, and wireless data transfer to both Web3 users and non-crypto native participants. End users pay fees to utilize these services, generating revenue for the protocols.

Over the last quarter, the total crypto market cap decreased 59%, from $2.1 trillion to $860 billion. In the Web3 infrastructure sector, fully diluted valuations declined 76% QoQ, from $63 billion to $15 billion. Despite the harsh conditions, Web3 infrastructure protocols continued to function and generate revenue uninterrupted.

In Q2’22, Web3 infrastructure protocols generated $5.7 million in revenue. Excluding Filecoin, which accounts for the majority of the revenue, the remaining Web3 infrastructure protocols cumulatively generated $470,000 in revenue over the last quarter. This is a 10% decline compared to Q1’22.