Clifford Chance

Web3 is being touted as the future of the internet – introducing new concepts from the metaverse through to DeFi (decentralised finance) and augmented by other blockchain technology such as NFTs (non-fungible tokens). It also promises greater user participation and online communities that are no longer reliant on a handful of tech companies.

To truly achieve this vision of a "better" internet, attention will need to be paid to diversity, equity and inclusion (DEI) of Web3. Without this focus, there is a real risk that Web3 will simply repeat the challenges that we have seen with the current version of the internet, such as algorithmic bias and the dissemination of hate speech on social media platforms.

Reminder: What is Web3?

Web3 is essentially a new version of the web built on blockchain technology. This means that Web3 products and services are decentralised – this puts more control in the hands of users, creators and decentralised organisations, meaning that no one entity can control it or shut it down. We are already seeing new Web3 products and services emerge, for example:

• Metaverses, such as The Sandbox, which is a virtual gaming environment built on the Ethereum blockchain.
• NFTs/virtual assets, which users can take with them across online platforms and trade on marketplaces such as Opensea. 
• Social media networks and blogs, such as APPICS, where creators are able to own and be rewarded for the content and data they post.
• Various DeFi apps and services that allow individuals to lend, borrow, earn interest and even invest in a syndicate (see Syndicate) without a central bank.

An emerging issue

With the increase in Web3 products and services, some commentators argue that Web3 is looking at a DEI problem. For example, Bloomberg reports that prices for popular CryptoPunks NFTs fluctuated based on race, gender and skin colour, with dark-skinned avatars pricing lower on average than lighter skinned avatars. Similarly, Time Magazine reports women make up only 4-6% of those working in blockchain and crypto industries.

We are all aware of the challenges with the current version of the internet, many of which stem from the lack of representation amongst creators, developers and users. For example, we have seen algorithms on websites and apps that we use perpetuate human bias and result in discriminatory outcomes.  The challenges of tackling the dissemination of hate speech across social media and blogs are also well known.

Without making DEI a top priority, we lose the opportunity to embed DEI into Web3's architecture. This is particularly important as decentralised platforms and member owned communities without central leadership may be harder to alter or change when they have unintended consequences.  

Fundamental barriers

Meta's chief diversity officer, Maxine Williams, said in a recent post that "diverse people shouldn't just participate in the metaverse as consumers; they should be its architects and builders as well".

However, there are fundamental barriers to increasing participation in Web3:

• Capital – many activities in the Web3 require significant capital. For example, current minimum prices for buying virtual land in The Sandbox metaverse is about 3 ETH (~ £3,800 at time of writing), which prices most people out of participation.
• Education – the learning curve for Web3 is much steeper than the current form of the internet, not only due to the complexity with developing decentralised apps but the lack of user-friendly design in Web3 applications.
• Time – as Web3 is still in its relative infancy, there is an endless range of Web3 apps and opportunities to explore. It takes significant time to research the good and the bad – a luxury that those with existing time commitments, such as work and family, may not have.

Adding DEI to your Web3 strategy

As such, forward-thinking business leaders who are wanting to reap the rewards of Web3 should consider how they can embed DEI into their strategy. For example:

• Amplifying diverse voices - Sorare, the player-owned fantasy sports game leveraging NFTs, has recently welcomed Serena Williams as an advisor to its board of directors to  provide strategic advice on women's e-sports.
• Supporting communities – 114 companies now support Unstoppable Women of Web3, an organisation working to provide training and onboard women to Web3.
• Representation matters – beauty brand, Clinique, has recently designed makeup looks for 8,800 virtual metaverse avatars, of which 66% are avatars of colour and 16% have a disability.

For Web3 businesses looking to avoid the pitfalls of the current version of the internet, addressing these fundamental barriers and creating an inclusive ecosystems of creators, developers and users will be key to success.