The promise of Web3

Serial entrepreneur Frédéric Montagnon is not afraid to lead the way, especially when it comes to new technologies. Self-described as ‘an engineer, not a financial guy’, he was first drawn to cryptocurrency more than a decade ago during the earliest days of blockchain technology’s emergence. He recognised the exciting potential of blockchain protocols, not only for cryptocurrency but for other applications, and has continued to pioneer projects in this space.

Besides maintaining his portfolio as an investor, Frédéric has also founded and run multiple successful companies – cumulatively valued at over $400M – over the course of his career. Now, his attention is focused on Arianee, his latest venture: an NFT platform connecting luxury brands with their customers.

In conversation with Platform Leaders’ Co-chair Laure Claire Reillier, Frédéric shares his vision on the promise of Web3 and his hopes for the future.

Web3 – a movement towards distributed governance

Although the term ‘Web3’ is increasingly inescapable, those without Frédéric’s engineering background might still be mystified by its history, current state and future implications. “From my perspective, Web3 has begun with the launch of Bitcoin,” Frédéric explains. “The first communities working around this cryptocurrency were trying to build a distributed governance for an information system. I think that this is the best way to define what Web3 is about. It’s about trying to transform certain levels and certain layers of the Internet into common property – regaining control over the infrastructure, as a user, and regaining control over our own data.”

When viewed through this lens, it becomes clearer why Frédéric and others see Web3’s propositions as being so radical. “Even before being a technology or a set of architecture, Web3 is a movement. It’s a movement of people who are trying to redesign the lowest of the Internet’s layers and make it available for everyone and governed by the users,” Frédéric says.

History and current state

The movement, as Frédéric sees it, is in response to the current state of how information flows and interactions take place over the Internet. “We have very few platforms that are governing and ruling the Internet,” he says. “This movement tries to rebalance how the Internet works and make sure that, really, we’re getting control over what we use on a daily basis.”

For Frédéric, his experiences founding and growing companies demonstrated where users have control – and where they don’t. He remembers: “I spent probably 10 years as an entrepreneur building systems, but every time that we reached a certain level, a certain size, we were forced to adjust our strategy, depending on Facebook or Google’s strategy.” Like other Web3 pioneers, Frédéric disagreed with this status quo and saw it as a distortion of the original goals of the Internet.

“The very first steps of the Internet were a set of open-source protocol, and probably one of the key factors of the success of the Internet was that it’s an open network,” says Frédéric. “So, you can join the network just by plugging in a new device, and you can be a part of the Internet. But, after a few years, we see that the platformization of the web has just reversed the spirit of the Internet.”

This is when Frédéric and others turned to new structures: “For me, [Bitcoin] was one solution for a new era of the Internet – an era where we regain control over innovation.” The allure of Bitcoin, and by extension, of blockchain technology, was exactly this: a disruption to the centralisation that was becoming an entrenched part of the Internet’s operating principles.

Of course, for some companies, there are major advantages to this data centralisation. “The architecture of the Internet today is [made up of] some platforms with centralised databases – all the calculation, all the computation happens on those databases,” Frédéric explains. “From a technical perspective, that is probably the easiest way to manage information and to make sure that you can provide a service to the user.” But he believes that the advantages of centralised data do not extend to most users. That is part of what Web3 sets out to change.

Regaining control over your data

Many, if not most, Internet users are not as attuned to these dynamics of information provenance as Frédéric is. He describes his previous experience with some platforms: “On all these different platforms, I spent a lot of time, as a brand and as a user, building my connection to other users. But this social graph doesn’t belong to me – it belongs to the platform.” For Frédéric, the inability to transfer his network of social connections off-platform was an unwelcome limitation – and one that Web3 promises to erase.

“In the Web3 paradigm, your social graph is just connections that are represented as NFTs that you can create and share with other users. If you want to [transfer] this social graph into different services, you can do it because it is your data,” he explains.

Significantly, this could transform the way that businesses and brands interact with their customers. Frédéric has experienced this first-hand: “Today, if you are a brand, you are not a core component of the Internet. You’re just at the periphery of some platforms and you pay those platforms to have a connection with a customer,” he says. “You will have to pay again and again to be able to reach this customer.” This could mean that brands feel their connection to their customers is too tenuous for comfort. “Plus, the platform, which is the middleman, would have the choice to redesign the rules [at any time],” says Frédéric. This paradigm means that many brands are reliant on platforms to facilitate the connection between them and their customers – which Frédéric sees as a blocker to innovation.

Whether individuals, small businesses or juggernaut brands, Frédéric believes that users should have sovereignty over their own information. “Today, you have absolutely no possibility to suppress some data. You don’t know, at the end of the day, how your data and how your social graph is used by your platform,” he says. “In the very near future, in Web3, you will be able to control everything.”

Managing data with Web3 technologies

Compared with the current state of data management, Web3 decentralisation would represent a significant shift. “In this new paradigm, the idea is to make sure that every single user has his own data, and every time he has to transact or make a connection to someone or to a service, he decides if he wants to reveal part of the data – and with who and under which conditions.” In order to better enable this at scale, however, Frédéric believes that there is supporting work to be done.

In particular, the ‘wallets’ that are used to store cryptocurrency would need to be expanded to protect other types of information. “We have really sophisticated wallets when it comes to storing value and to trading assets,” he says. “Now we need to also have products to be able to store new sets of data.”

This is where NFTs take centre stage. “An NFT is, first of all, a digital component that is unique,” Frédéric explains. “It’s data. It can be your edge, it can be your ID. It can be the proof of ownership of something. It can be proof of attendance.”

From this perspective, there are many untapped possibilities for NFTs beyond the kind of digital artworks and assets that are currently capturing the popular imagination. As Frédéric clarifies: “All this data can be represented as NFTs instead of being an entry in a database.” What is needed, from his perspective, are solutions for using NFTs for data management. “We need to have more and more businesses and services that choose NFTs as a way to issue data and to share that data with the user,” he says.

Arianee: a ‘connection that lasts forever’

Frédéric’s latest endeavour, Arianee, sets out to enable businesses to choose NFTs as a method for interacting with their customers. “The vision we have is we want to help brands and service providers to issue NFTs, to put those NFTs into the hands of their users and to interact with those NFTs,” Frédéric explains. “It’s everything that a brand needs to enter the Web 3 era.”

As in the Greek myth where Ariadne provides a magical thread to help Theseus escape the maze of the Minotaur, Arianee is an open-source protocol that allows brands to forge ‘a pattern of connection with your customer’, as Frédéric puts it. Using NFTs, brands can create digital representations of real-life assets – for example, a digital version of an item like a handbag or pair of shoes, or a digital passport that represents membership in a community. Because the use cases of NFTs extend far beyond digital collectors’ items, Arianee is helping brands explore the full range of possibilities.

The concept is still new for many brands, but in Frédéric’s opinion, it is a powerful lever for business growth: “There is a first-player advantage to being one of the first brands to issue a lot of NFTs, to recreate all this connection.”

The future is decentralised

Looking ahead, Frédéric sees even more possibilities for platforms within the Web3 paradigm. “In the future, digital platforms will be decentralised. It solves the problem of ownership, digital sovereignty, risk in terms of security and compliance. I don’t see any bad side of just decentralising where the data are stored today on the Internet,” he says.

At the same time, he encourages others to explore the wider potential of Web3 platforms. Frédéric’s advice: “Just play with it and experience it for yourself.”

To go further 

This keynote with Frédéric Montagnon was part of the Platform Leaders event organised by Launchworks & Co on the 7th of June 2022 (full list of speakers and agenda). To watch the full event, play the video below.