Washing Web3 - Bloomberg

The main point of this trade is that, in a frothy market for fast-growing companies, you can sell $1 of the right kind of revenue for much more than $1, and so it is worth your while to create some revenue, dress it up to look like the right kind of revenue and then sell it to someone. But another point of this trade (the one in Step 8) is that in network-effects businesses these things can be self-fulfilling, and a fake business can turn into a real one. 3 If someone is looking to rent a house in an app, she’s going to go to the app she’s heard of; if yours is getting a lot of press for growing quickly and raising lots of money, she’ll go to your app. This trade, as I described it, is basically fraud, 4 and sometimes people do it and get in trouble for it. But there are subtler and far more interesting versions of the trade. Here is a very important one; let’s call it the “Web2 version”: The Web2 version of the trade is central to the story of the last decade in the U.S. tech indu

The main point of this trade is that, in a frothy market for fast-growing companies, you can sell $1 of the right kind of revenue for much more than $1, and so it is worth your while to create some revenue, dress it up to look like the right kind of revenue and then sell it to someone. But another point of this trade (the one in Step 8) is that in network-effects businesses these things can be self-fulfilling, and a fake business can turn into a real one. 3 If someone is looking to rent a house in an app, she’s going to go to the app she’s heard of; if yours is getting a lot of press for growi