From decentralized utopia to casinos, why has Web3 become a capital-dominated speculation paradise?

Author:hmalviya9, founder of @dyorcryptoapp

Compiled: Rhythm Deep

Editor's note: The article explores the process of Web3 gradually eroding from the decentralized ideal by capitalism: it was initially established by pioneers who pursued freedom, Web3 attracted capitalists to settle in due to scarce block spaces such as Bitcoin, and then the expansion of new territories such as Ethereum and technologies such as Layer-2 made block spaces flood and the value declined; although new lands continue to emerge, Web2 users moved in due to complexity and risks, and major players such as exchanges and market manufacturers made profits by manipulating the market. In the end, Web3 deviated from its original intention and became a capital-led speculative paradise.

The following is the original content (to facilitate reading comprehension, the original content has been compiled):

We have two digital planets: Web2 and Web3.

The planet Web3 is quite novel – it was originally established by pioneers who believe in decentralization, freedom and autonomy. In its early days it was a wild, unexplored land, with no rulers, only builders.

But then a bridge between Web2 and Web3 was established. At first, only a few capitalists from Web2 arrived, attracted by the original potential of this new world. They stand aside to observe, analyze the terrain, understand the rules, and identify the most valuable territory.

The first wave of large-scale colonization began with Bitcoin, the most precious country on the island of Web3. This is a scarce piece of land with clear ownership and power belongs to those who understand its fundamental principles.

But once the first settlers took control and accumulated wealth, they began to expand. They found that Web3 is much more than Bitcoin. There is still vast uncultivated land waiting to be shaped. Soon, they surpassed Bitcoin and built new territory—Ethereum, Solana, Polkadot, and countless other fields.

As more land is discovered, the competition to divide new countries is becoming increasingly fierce. Initially, block space was scarce. The earliest blockchains operated under strict restrictions - every transaction requires space, and space is not sufficient. This scarcity gives huge value to block space. Having a small piece of space means having a place in the new digital economy. But as competition intensifies, innovation follows.

 Ethereum transaction visualization 

More efficient ways to create block spaces have emerged. Layer 2 solutions, Rollups, Alternative Chain – Each brings a lot of new land to the Web3 planet. The once scarce goods have become abundant.

Builders no longer fight for limited space; instead, they create endless new lands to meet growing demand for settlement. But the flood of block space has brought unexpected consequences.

 Image source: rollup.wtf 

Things that once precious become cheap. The cost of storage transactions—once a key economic force—has dropped dramatically. The promise is that cheap block space will attract millions of new Web2 settlers, but that is not the case.

People in Web2 hesitate.

They have heard stories of adventurers entering Web3, drawn to the promise of wealth, but swallowed by predators. Some Web2 residents have indeed taken steps and are attracted by the legend of getting rich overnight.

They entered Web3 and hoped to gain a place in the new economy. Many people start by buying small plots of land – various tokens, each promising future value. They trade, speculate, start businesses, and believe that they are in the early stages of the next great revolution.

But they did not realize that Web3 had long been structured by the earliest settlers and the most powerful capitalists. Although the rules of the game have not been written clearly, the people who control this land are well aware of it. As more people on Web2 move in, they are in trouble without realizing it. The complexity of Web3 is daunting.

There are too many new countries, different rules, and scams disguised as opportunities are emerging one after another. Big players control information flow, manipulate the market, raise value, and "pull away the carpet" under the feet of unprepared settlers.

The planet Web3 has become a playground for those who know how to extract wealth from the ignorant. Even though block space is cheaper than ever, adoption rates are still slow. The dream of mass migration from Web2 to Web3 is shattering.

New land promises a seamless user experience, but never reaches the familiarity and convenience that Web2 provides. The extra promise of quick motivation is not enough to impress people – Web2 people have seen too many fellow citizens get burned.

They watched the entire country within Web3 rise and collapse overnight, and wealth gained and lost in the blink of an eye. Ordinary people are hesitant and cannot see through the chaos. However, amidst turmoil, a prosperous trading market emerged.

Web3's real estate—tokens—has become the lifeblood of its economy. Everything is for sale. Each country has its own assets, unique value and commitment to the future. The trading ground is never stopped and open all day, driven by speculation, manipulation and greed.

Some countries have been prospering temporarily and then declined due to a shift in attention. New land is minted every day and sold to the highest bidder, and doubles the profit in the short term. The cycle is endless. And while settlers struggle, the real beneficiaries of Web3 thrived.

The bridge operator—the exchange—becomes the gatekeeper, controlling the flow of assets between Web2 and Web3.

In short: Scammers cheat the liar.

They make profits every time someone comes in and out. Market manufacturers—the hidden power of managing liquidity—make sure every transaction is paid attention to, and it takes a commission from it. Developers are constantly building, not necessarily for innovation, but for creating more land for sale. And what about marketers? They weave stories, create narratives, and sell dreams to the next wave of hopeful settlers.

The dark side of Web3 is that it is no longer truly decentralized. The early free and open digital frontier ideals have been replaced by the cold reality of capital.

The same forces that dominate Web2 have penetrated into Web3. Not only did they settle down, they also reshaped the planet to meet their needs. As a result, the Web3 planet continues to expand, becoming an endless frontier of digital land, speculation and fleeting opportunities.

The true dream of decentralization still exists. The settlers are still coming, hoping to get rich, but in the end, most people leave poorer than when they arrive.

Meanwhile, those who have mastered the system continue to extract, build and control to ensure that the planet is still shaped by them.