Indonesian Web3 Ecosystem Optimistic in Projecting Business Next Year

A young man from Semarang, Ghozali Everyday, became a phenomenon in 2022. In an instant, he pocketed billions of Rupiah from selfie photos sold on the OpenSea platform. Objects based on non-fungible tokens (NFT) have also become the target of digital asset enthusiasts and those who are simply curious.

The NFT euphoria did not last long when benchmark interest rates increased and inflation hit the global market. Interest is decreasing, the value of NFTs and crypto is also decreasing. Collection price Bored Ape Yacht Club reportedly plummeted from millions of US dollars to tens of thousands of US dollars. Not much different, the lowest price for Ghozali's photo on OpenSea is only 0,03 ETH from the lowest price of 0,13 ETH as of 2022.

The volume of crypto asset trading transactions has also reportedly continued to decline over the last three years. Having reached IDR 859,4 trillion in 2021, total transactions fell again to IDR 306 trillion in 2022, and as of September 2023 the value was only IDR 94,4 trillion.

The Indonesian market first became familiar with blockchain through crypto, then expanded to other projects, for example NFTs. Both crypto and NFT tend to be in high demand by the retail segment or individuals. As a traded digital asset, its value is very volatile so it is high risk. As a result, these fluctuations create negative sentiment among the public.

"It cannot be denied, conditions bull market occurred in 2020 to 2022. This is characterized by rising prices, people focus on making millions of dollars overnight through crypto, thus creating a mindset that Web3 products, such as crypto and NFT are speculative assets," said Gaspack CEO Novrizal Pratama when interviewed DailySocial.id.

In this article, DailySocial.id highlights reflections on the blockchain industry and its projections from a number of players and associations.

2024 trend highlights

The Indonesian Blockchain Association (ABI) and the Indonesian Crypto Asset Traders Association (Aspakrindo) stated that they continue to actively encourage blockchain adoption, including in relevant ministries or institutions to address issues at the national level. One of them is the project to create a Central Bank Digital Currency (CBDC), Digital Rupiah. Another effort is education and literacy to improve the quality of human resources.

Asih Karnengsih, Executive Director of ABI-Aspakrindo admitted that the blockchain industry was experiencing a temporary slowdown triggered by fluctuations and changes in market interest. However, this factor is normal considering that this industry is still relatively new.

"The Web3 ecosystem cycle, if analyzed technically, experiences something similar in a certain period. A decline in interest is needed in a cycle to ensure parties in this ecosystem can contribute positively, not just follow temporary trends. This phase is a momentum for technology developers to explore innovation," said Asih to DailySocial.id.

Based on Kominfo data as of September 2023, there are 1.629 companies registered as blockchain technology development companies in Indonesia. Meanwhile, the Association maps the Web3 industry based on the following business models:

Meanwhile, VP of Operations Upbit Indonesia Resna Raniadi estimates that adoption of several Web3 trends will continue even though the industry has turned upside down. According to him, the trend of switching from the Web2.5 generation internet (covering crypto, NFT, AI, to metaverse) to Web3 will continue.

Then, it is said that NFTs will still play a role in the transformation of the creative industry, especially in terms of ownership of digital works of art and other collectibles. NFTs are widely adopted by artists and creators to monetize their work for fans and collectors.

"2023 has provided an interesting picture of world developments cryptocurrency. With the growth of new projects and blockchain adoption, the industry continues to move forward. "Even though there are challenges that need to be overcome, new opportunities and innovations continue to emerge," said Resna in her official statement.

Transformation of creative industries

The association assesses that the main attraction of NFTs lies not only in proof of ownership to ensure the origin of a digital product, but also pintu development of a more transparent digital ecosystem. This is an important element for the arts and games sector.

In line with that, Co-Founder and CEO Arthropology Intan Wibisono said that the use of blockchain can actually help trace the track record and authenticity of a work. Apart from that, NFTs have a role in providing access to a broad market and are not limited by location restrictions. Both are often considered to be the main issues, both for artists and fans of their work.

"Group we are not just about buying and selling transactions, but efforts to protect [the ecosystem] in the long term. There has been no technological disruption in the arts industry, [if there is] the disruption is very complex. That's why we are trying to incorporate blockchain into it marketplace," said Intan when chatting with DailySocial.id.

CEO Gaspack Novrizal Pratama added that the use of NFTs gives artists and creators the opportunity to monetize their work without involving third parties. Most of the sales go into their pockets. "We want empowerment them so that they are not just appreciated as commission artist just."

A number of artists, creators and corporations are starting to use NFTs to utilize their works, both for the purpose of monetizing their works and strengthening relationships with their fans. Based on the report "Statista Digital Economy Compass 2022", there are 1,25 million NFT users in Indonesia, also the 8th largest country in the world. In first position is Thailand with 5,65 million users.

Several artists or creators, musician Isyana Sarasvati released the NFT Mystery collection where the owner can experience the synesthetic space between the audio-visuals of his works. Bumilangit also utilizes NFTs to utilize its universe ecosystem related to films, games and digital comics. Some of those that have been released are 346 NFT units  Gundala and 381 units of NFT Sri Asih.

Blockchain on enterprise

Private blockchainn is a blockchain network whose adoption may not be as popular yet public blockchain. Sentimentally, market understanding of blockchain also mostly refers to products public blockchain, such as crypto and NFT. However, from the demand side, needs private blockchain very large.

Even though, private blockchains and public blockchain have major differences in who can access and participate in the network. Public blockchain open to anyone, meanwhile private blockchains can only be accessed by certain users.

One of use case-it is asset management (treasury management) blockchain-based digital. As conveyed by D3 Labs Co-CEO Tigran Adiwirya, this solution allows companies to track the assets of their subsidiaries, from recording, location, to movement activities. This solution is said to make it easier for companies to carry out audits.

He also believes that blockchain is actually not as complex as people know, because it is basically just a recording technology that is managed in a decentralized manner. Blockchain can also be applied to sectors that are closely related to data needs, for example medical records in the health sector.

"We are at the crossroads between fintech and blockchain, between Web2 and Web3. Therefore, we are calibrating because it is often misunderstood [as a blockchain product]. Call it Web3, not really because there is no crypto element. Adopt the solution on enterprise not as fast as retail. There are factors compliance. Perceive complexity on blockchain is also diverse. "So there must be [players] who encourage the industry," explained Tigran.