Expanding Wealth Gap... Can Web3 Be the Solution? [Hankyung Koala]

Widening Wealth Gap and Its Impact

The expansion of the wealth gap has become an unavoidable topic worldwide. As various indicators show, the wealth gap, which narrowed after World War II, began to widen again after the 1970s, returning to post-war levels. In the case of American society, the asset share of the top 0.1% of households rose from 8% in the 1970s to over 20% in the 2010s. The concentration of asset ownership is one of the key factors exacerbating economic inequality, demonstrating the increasing economic dominance of the upper class.

Wage disparity is also widening. The wage gap, which began to widen since 1979, shows no signs of narrowing. According to the latest data from 2018, the gap between the top income class and the lower class has reached an all-time high. This is not merely an issue of individual income but a structural problem affecting overall quality of life, including education, healthcare, and housing. It is likely that this gap has not narrowed as we look toward 2025.

The concentration of industries is also an important factor in the deepening wealth gap. Companies like Microsoft, Apple, Google, Amazon, and NVIDIA hold the highest market capitalization in history. The fact that most of these companies are big tech shows the difference in added value they create compared to traditional industries. The advent of the AI era is expected to accelerate this concentration phenomenon, as big tech companies expand their market dominance by exclusively utilizing AI technology.

The expansion of the wealth gap across assets, wages, and industries is fueling political and social conflicts. Extreme political forces are rising worldwide, and issues such as refugee problems and border closures are increasing, showing side effects. Historically, when the wealth gap has been extreme, humanity has experienced revolutions or wars. As society leans toward centralized power structures (governments, large corporations, etc.), the history of popular networks (people, individuals, etc.) countering and rebelling against this has repeated.

As history has shown, demands for 'distribution' in all areas, including assets, wages, and industries, will gradually increase. How can we solve these problems? Could the printing press of Gutenberg, which enabled the development of the 'square' during the Renaissance, be reproduced in the 21st century? Could Web3 be the solution to this problem?

Web3 Could Be the Solution to Distribution Issues

Web3 takes a completely different stance from existing Web1 and Web2 not only in terms of technological and philosophical innovation but also from a distribution perspective. The greatest potential of Web3 is that it can fairly distribute the added value created by services to more people, rather than concentrating it on a select few. In Web2, platform operators took most of the value, but Web3 provides a structure where communities and users can share a larger portion.

A representative example is Axie Infinity in 2021. Over 2 million users, mainly in Southeast Asia, maintained their livelihoods by earning hundreds of thousands to millions of won per month through Axie. Axie Infinity presented a new model called Play-to-Earn (P2E) by combining blockchain technology and token economy. While a few game developers and platforms took most of the profits in the traditional game industry, Axie Infinity shared the game's value with users, providing economic opportunities. This allowed many to witness the potential of Web3 services, marking an important turning point in the expansion of the Web3 ecosystem.

Another example is the NFT marketplace Blur. Blur rejected the high fees and centralized business model of the existing number one player, OpenSea, and took an approach that returned more value to users and creators. Blur eliminated fees and airdropped over 50% of its own tokens to users, drawing public participation. Blur built a structure where users could directly contribute to the platform's success and receive rewards, overturning the market dynamics of NFT trading by taking market share from OpenSea.

The Pinnacle of Community Distribution, the Emergence of Hyperliquid

The most noteworthy example is the on-chain perpetual exchange (Perpetual DEX) Hyperliquid. Hyperliquid, a blockchain-based coin exchange (Perpetual DEX), has attracted industry attention with its technology that processes all orders on the blockchain and its community-centered token distribution policy. At the time of the token launch, it announced plans to allocate 30% of the total supply to the community and distribute a total of 70% to the community, declaring no plans for VC fundraising or centralized exchange listing, which were considered industry practices. This bold move and token distribution structure led to community participation, driving the Hyperliquid ecosystem into a virtuous cycle.

The most notable aspect of Hyperliquid is the 70% community allocation, an example not found in existing Web2 or traditional financial industries. For instance, even Robinhood, which gained attention with its innovative slogan, allocated only 1-2% of the total shares to retail investors at the time of its IPO. In contrast, Hyperliquid distributed 70% of the total tokens to users for free, setting a new standard in terms of wealth redistribution and fairness. If Hyperliquid, like Robinhood, allowed trading of both stocks and crypto, which service would users choose? And which service could alleviate inequality from a wealth distribution perspective? Given that most of the ultra-wealthy assets are in stock assets, the answer seems clear.

The emergence of Hyperliquid provides an opportunity to redefine the direction of Web3. It has prompted a reevaluation of the formula of VC investment and CEX listing, emphasizing that community-centered distribution is essential for the success of Web3 services. In the future, Web3 users and the public will naturally demand token or stock distribution according to service usage, which is expected to contribute to alleviating the increasingly deepening wealth gap. Hyperliquid will be a project playing a crucial role at the center of this change.

Can Web3 Be the Gutenberg's Printing Press?

Web3 proposes a new distribution model that moves away from the concentration of wealth centered on existing VCs or major shareholders, sharing benefits with the public. Of course, there are still many challenges to overcome for popularization. Improvements in infrastructure and UI/UX, as well as more user-friendly services, are needed. However, if Web3 overcomes these limitations, it is believed that it can become the 21st-century Gutenberg's printing press.

We look forward to the future of Web3, which can alleviate the polarization intensified by the AI era and provide more opportunities to the public. Web3 is not just a technological innovation but is becoming a tool with the potential to solve structural problems across society.

CrossAngle is…

CrossAngle is the operator of the crypto data intelligence platform 'Xangle'. Xangle creates content to show trends in the virtual asset investment industry based on global virtual asset disclosures, evaluations, and information and data.

▶This article is an external contributor's column introduced to provide various perspectives to cryptocurrency investment newsletter subscribers and does not represent the position of Hankyung.

Reporter Mihyun Cho mwise@hankyung.com