How Alchemy Is Bringing Blockchain To A Billion People

What is Alchemy? 

Building web3 applications is hard. Before 2017, developers and founders building decentralized applications (Dapps), like NFT marketplace OpenSea, all faced the same problem: they didn’t have access to reliable, scalable infrastructure and developer tools. 

Founders had to build their own tools from scratch and run their own blockchain nodes. But this wasn’t reliable or scalable. As soon as Dapps started experiencing too much traffic, the nodes weren’t able to support it. 

That’s why Joe Lau and Nikil Viswanathan co-founded Alchemy in 2017. Alchemy is the web3 development platform that makes it easy for developers to build web3 apps. Their mission is to bring blockchain to a billion people—Adobe, Binance, OpenSea, and thousands of other projects are already using Alchemy’s API and development tools to build and scale their Dapps. 

“The better tools you have, the more powerful applications you can build,” Joe Lau said in our recent Web3 After Dark Twitter Spaces. “If you have a pick and a shovel, you can only build a mud hut — but if you have power tools and cranes, you can build skyscrapers.” 

How are web2 companies entering web3? 

Alchemy is seeing developers use their platform to easily build exciting Dapps. For example, Royal used Alchemy to create a marketplace that allows music fans to own their favorite songs and earn royalties for every stream. 

“Before Royal, artists could only monetize by working with companies like Spotify or a label, and they end up getting a tiny cut of the royalties that the music brings in,” Joe said. “But now Royal is able to connect the creator to their fans directly, let the fans support the creator, and also share the upside that the creator is making.” 

Adobe is also using Alchemy to integrate NFTs into their Behance website which gets over 160 million monthly visits. Behance is a designer community product, and now designers can issue NFTs for their design work. 

As more Web2 giants enter web3—such as Starbucks launching their new NFT loyalty program without even using the term NFT in any marketing materials—it’s likely that the public will start using web3 tech without realizing they’re using it. 

What does the Web3 Venture Scene Look Like? 

Alchemy Ventures & Partnerships was started in 2019 by Paul Almasi (it launched a week after Joe and Nikil called Paul about this idea multiple times while Paul was on vacation). They’ve already made about 40 investments and have $20 million earmarked for this initiative. 

On the venture side, Paul has seen valuations decrease: seed stage companies could have a valuation of $10 to $20 million; pre-product $20 to $30 million; post-product $30 to $40 million; post-product with traction $50 to $70 million. Rounds are also taking longer to close because investors are extending the due diligence process. 

“The less obvious trends in the ecosystem that we’ve heard from developers is that they need a lot of help with incubation,” Paul said in our Twitter spaces. “The investors that have been helping web3 founders haven’t been able to provide as much product insight and hand holding to build this customer company, and that’s something we really want to help fill the gap for.” 

Is Web3 Dead?

While retail hype for crypto, which is often ahead of technological advancements, has died down since 2021, the bear market has not stopped the web3 development community from growing and building. 

“If you look a layer or two deeper — past the prices, past the vanity metrics — I actually find that the developer ecosystem is quite strong,” Paul said. “We have seen a 3.5x increase in active developers and a 10x growth in the last 12 months on the Alchemy platform.” 

Alchemy is nurturing the community by investing in affordable education that will encourage more developers to build in web3. At Alchemy University, they have free tutorials and courses (over $3000 in value) that help developers get accumulated with the ecosystem.

Alchemy is investing in affordable education because they believe it will create a virtuous cycle for the blockchain ecosystem. Better education leads to more developers; more developers will lead to more apps created; more apps will lead to more investments in infrastructure; better infrastructure will lead to more developers. 

“Platforms like ourselves are investing in infrastructure and things that make it easier for people to build their applications,” Joe said. “This in turn drives more investment into infrastructure, and the ecosystem and the technology continues to get better. Over the next couple of years, we’ll come out of this bear market with a lot more applications, a richer ecosystem, and a healthier industry in general.” 

What web3 problems still need to be solved in 3-5 years?

Paul believes there are three major categories of problems that brilliant developers can tackle. 

1. Make web3 data more human readable
2. Build more automations and abstractions 
3. Bridge the gap between blockchain and the physical world

Make Web3 Data More Human Readable

“This could look like using natural language processing for intent based search for on chain data,” Paul said. “So you can think of it as like the Google for Web3 data.” 

As crypto enthusiasts onboard the crypto curious, they also need to build integrated product experiences that are easy to consume. Crypto wallets, for example, could have a more integrated experience. Today, wallets typically require customers to go to a different platform to buy tokens, another platform to swap tokens, and another to get yield on the tokens. 

Build more automations and abstractions 

Developers want to build products as quickly as possible. “We can create SDKs, for example, that help developers create web3 games or marketplaces not from scratch but from a higher level up the stack,” Paul said.

Today, it’s also difficult to automate onchain events and connect them with off chain data points. “While it’s easy to pull in arbitrary data like prices and weather, it’s difficult to pull in data from a private sandbox like Uber Eats or your AWS console,” Paul said. 

Bridge the gap between blockchain and the physical world

For example, buying concert tickets and getting NFTs which grant you access rather than getting a pdf emailed to you. 

Or “connecting the banking world to NFTs and potentially taking loans out, using NFTs as collateral,” Paul said. “These are all things that need to be solved at the infrastructure level and my hope is in the next five years some really talented folks will come in and solve these issues.”