The web3 and cryptocurrency investment arm of the prominent venture capital firm Andreessen Horowitz (a16z), a16z Crypto, has released its “State of Crypto” report. In addition, A16z Crypto has also introduced its new State of Crypto Index. The said report highlights how vital web3, blockchain infrastructure, and price-innovation cycles are for builders in a bear market.
In a blog post, a16z’s Daren Matsuoka, Eddy Lazzarin, Robert Hackett, and Stephanie Zinn stated,
Our 2023 report aims to address the imbalance between the noise of fleeting price movements– and the data that tracks the signals that matter, including the durable progress of Web3 technology.
Overall, the report reflects a healthier industry than market prices may indicate, and a steady cycle of development, product launches, and ongoing innovation.
The index, an interactive tool, tracks the cryptocurrency industry from a technological angle instead of a financial one. To add to its strength, the index takes into account the “weighted average monthly growth of 14 industry metrics” (considering the volume of verified smart contracts, the transacting wallets, etc.). In short, the index exhibits the innovation and adoption rate of web3 in one chart.
Crypto isn’t just a new financial system, it’s a new computing platform. The State of Crypto Index is an interactive tool that tracks the development of the next internet. The index reflects the forces of innovation and adoption that drive crypto’s market cycles.
Significantly, the index in question inculcates various innovation and adoption parameters, such as active developers, inclusion of cryptocurrencies in academic research, and decentralized exchange (DEX) volumes. Notably, repugnant data points, such as bankruptcies, blockchain hacks, or regulatory enforcements, aren’t included in the index.
Further, in the report, a16z presented the progress made so far in the state of crypto today. The venture capital firm noted the number of builders entering web3 is on the rise. With the academic research also increasing, the products being launched plus the key infrastructure are also getting better, a16z noted. As for the market cycles, a16z noted that the “price-innovation” cycle still continues, and that the “internet needs web3.”
