Bybit's Web3 Cuts: Innovation Lost or a Chance for Sustainable Growth?

The news hit the crypto-sphere like a rogue transaction: Bybit, a major player, is pulling the plug on several of its Web3 services. Notice of the shutdown dates are posted, some as soon as April 28th, others by May 31st. Whether this is a strategic masterstroke or a broader fumble that sidelines the very communities Web3 pledged to create new opportunities for remains to be seen. The official line is a “strategic repositioning,” a refocusing on their core products. When I hear cost-cutting, you can already smell the retreat.

Is Profitability Trumping Financial Inclusion?

Let's be real. As with any ambitious startup, Bybit needs to find a sustainable business model to start generating profit. The crypto market is a harrowing and volatile beast, and surviving means making the hard choices. The targeted nature of these cuts especially hurts. We’re only referring to Web3 services, the exact type of tools that have the power to democratize finance, especially in developing countries.

NFTs open thrilling new portals for artists from developing countries. They can do this because they’re able to bypass typical gatekeepers and connect directly with a global audience. Decentralized finance (DeFi) has the potential to give people access to loans and other financial services that they have long been excluded from by the traditional banking system. This is the promise of Web3, the promise Bybit was, at least on the surface, trying to deliver on.

Now, they're integrating Avalon's Bitcoin yield product. Is this a bad thing? Not necessarily. That would be a welcome step in the direction of creating more stable, accessible financial products. Is it the beginning of a move away from the deeper, more radical, transformative potential of Web3? Will Avalon's Bitcoin yield product integration lead us to a future of more stable and accessible financial products? Or will it send us hurtling in the opposite direction — away from Web3’s truly innovative and transformative potential?

Could There Have Been a Better Way?

The timing and breadth of these cuts are suspect at best. Was there really no other option? Could Bybit have taken a less abrupt approach, phasing out specific services or products instead of sweeping cancellations? Which were the most promising projects that were left to die too early? Given just a little more intention and effort, they could have grown these projects into significant value creators.

Given how closely it follows X2Y2’s announcement to shut down its NFT marketplace, this shutdown stings a lot. It's like watching a gardener rip out seedlings before they have a chance to grow, all because the initial harvest wasn't as bountiful as expected. We should be grateful for reasons like this, but we should ask ourselves, is this indicative of a larger trend? Are other platforms going to follow suit?

Who Pays The Price Of This Pivot?

Here’s where the social democratic leaning comes in. Each such decision carries serious real-world implications, but these implications are often felt most acutely by the most vulnerable. What of the users, particularly those from emerging markets who depended on these Web3 services? What is going to happen to the numerous artists who have developed their livelihoods through the Bybit NFT marketplace? How do we account for people that leveraged DeFi platforms to legitimately gain access to underbanked financial services?

It's not about being anti-profit. It’s about calling for a better, more equitable, more responsible, and inclusive approach to innovation. We want to ensure that all communities are able to access the benefits of Web3. Not if it’s only available to early adopters and rich investors.

Bybit's silence on the matter is deafening. Cointelegraph’s subsequent request for comment went unanswered, leaving a dangerous vacuum filled with speculation and concern. The speculation surrounding a purported $1.4 million dollar token listing fee – which Bybit has publicly rejected – does nothing to help relieve the appearance. We can’t forget their alleged $1.4 billion hack from February – possibly one of the triggers for these budget-slashing moves.

Avalon’s Bitcoin yield product that the integration would bring is a band-aid. The vision for this integration is a new era of more affordable and inclusive financial solutions. It does not go far enough to fix the key problems that remain.

The catch here is that we are calling for companies like Bybit to be held accountable. We need to hold them accountable by demanding transparency, responsibility, and a commitment to financial inclusion. Whether you’re in emerging markets or not, we can help you join us. Here's a call to action: Let's advocate for a more inclusive and sustainable approach to Web3 innovation. Let's encourage Bybit and other crypto companies to work with regulators and community stakeholders to develop responsible frameworks for innovation. Time to take a deeper look into collaborations with on-ground local organizations to foster Web3 adoption in emerging markets.

This isn't just about Bybit. The future of Web3 is a fascinating conversation. Will it truly deliver on its promise to give power back to people and local communities around the world? It’s making sure that the great things that we’re creating through innovation aren’t destroying the progress we’re making toward social equity.

This isn't just about Bybit. It's about the future of Web3, and whether it will truly live up to its potential to empower individuals and communities around the world. It's about ensuring that innovation doesn't come at the expense of social equity.