1) The document discusses the size and growth of the global and Japanese Web3 market in 2021, noting that the Web3 market is now comparable in size to traditional Japanese economies. 2) It provides an overview of protocols, infrastructure, applications, and secondary markets in the Web3 stack and ecosystem. 3) The document outlines initiatives in Japan to build up the local Web3 startup ecosystem, including a co-working space near Tokyo that is attracting Web3 startups, creators, investors, and corporations.

1. Protocol
Infrastructure
Application
Secondary Market Ancillary Service
Web3 Market overview
[Global & Japan]

2. Web3 Market size
Accelerating by NFT booming, blockchain-based economy: Web3 has been real in 2021. Web3 global market is
already comparable to Japanese traditional economies.
2
Crypto asset
• Total market cap of top 10 assets recorded
all time high $2.5tri (290tri) in Nov2021.
(Comp.: Total market cap of top30 stocks in Japan
was 250tri.)
• Market grew +176% in 2021.
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NFT DeFi
• Total trade volume of top 10 market was
$24bil (2.7tri).
(Comp.: Digital B2C EC market in Japan was 2.5tri.)
• Monthly volume grew+5,438% in 2021. (Jan
to Dec)
• Total market cap recorded all time high
$174bil (20tri) in Nov 2021.
(Comp.: Total market cap of top3 mega bank in
Japan was 18tri.)
• Market grew +650% in 2021.
Crypto asset market cap 290tri
Stock market
in Japan
250tri
NFT trade volume 2.7tri
Digital B2C EC
market in Japan
2.5tri
DeFi market cap 20tri
Top 3 banking
service in Japan
18tri

3. Protocol
Ancillary
Service
Blockchain
Web3 Stack
Compared to Web2, Fat Protocol, protocol capturing value, is unique point in Web3 by token and open source
structure. Monopolizing is difficult. Liquidity, community and composability are moat in Web3 products.
3
Service classification example Product example
Crypto asset
exchange,
NFT market place
Stable coin,
DeFi, NFT game,
Web3 SNS
Wallet, ID, Security,
Certification, Dev tool,
Storage
NFT Lending,
NFT mint and
ops API,
NFT asset
management,
Web3 mark-
eting,
DAO tools,
Analytics
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Infrastructure
Application
(incl. Primary Distribution)
Secondary Market

4. 4
Web3 Chaos map in Japan
Japanese Web3 market started catching up in late 2021. Regulation issues made innovative startups and
entrepreneurs go outside Japan. Japanese government has started discussing to change regulation in 2022.
* Including project originated in Japan or by Japanese founders and now based outside Japan, and foreign project having office in Japan
Protocol
Infrastructure
Application
Secondary Market Ancillary Service
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5. Web3 Upcoming service model
Web3 is still fragmented. There are some profitable service model, such as DeFi and NFT market place, but
very limited. Variety of products come and go in a rapid growing market.
5
NFT x DeFi NFT aggregator Community management tool
Gateway, Notification Builder NFT rental
• NFT rental service between NFT holders
and NFT users
• Demand on GameFi and blockchain
metaverse is growing.
• NFT is getting used for event ticket and
community participation right.
• Consulting or development API products
for brands and IP holders that entry to
Web3 fields
• NFT minting and market place builders
have increased since last year.
• Demand of NFT community operation and
enhancement tools is increasing.
• NFT related community operation or
marketing products
• Varity of products, such as access
management for NFT holders on Discord
or push notification for specific NFT
holders, have released.
• Community led organization is a key
feature of Web3 products.
• Many types of DAO management tools
such as treasury management, voting,
token distribution are getting popular.
• Aggregating and providing NFT related
information such as trading stats among
NFT collections or market places and
blockchain
• Demand of NFT aggregator is growing by
rapid growth of NFT market.
• Mix of NFT and DeFi
• Several NFT lending products, that users
borrow crypto asset against their NFTs as
collateral, raises tens of million dollars.
• Other new concepts, such as NFT staking、
NFT trade mining, etc. are coming.
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6. Initiative for building Web3 ecosystem in Japan
Web3 startups, creators, influencers, media and corporations have gathered at MIRAI LAB PALETTE close to
Tokyo station. Attracting VC/CVC now, three elements of startup ecosystem are getting ready.
6
Role model
Talents
• Web3 startups, creators,
influencers, media and
corporations are
gathering.
Capital
• Web3 sourcing manager of
CVC of the company that
operates MIRAI LAB
PALETTE is there.
• Many VCs register PALETTE.
Place
• Open innovation and co-
working lab MIRAI LAB
PALETTE is located in
Otemachi Building attached
to Otemachi subway
station.
Block 71
• Government led startup ecosystem in
Singapore
• Providing office and collaboration
space for startups and
VCs/accelerators at discounted rent
• 260 startups and 25 VCs/Accelerators
there as of 2016
• Managers of investment vehicle of
government there
Projects registered in PALETTE
PALETTE NFT club
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