India is on track to lead Web3 adoption by 2027. A report by Hashed Emergent shows that India hosts over 1,000 Web3 startups across finance, infrastructure, and entertainment. India is home to almost 12% of all crypto developers worldwide, making it the second-largest developer base after the United States.
The study estimates that India will take the top spot by 2027. The Web3 startup ecosystem in India has secured over $3 billion in funding since 2020. In the first nine months of 2024 alone, the ecosystem attracted $462 million in investments, an 82% growth from the previous year.
Most investments went to Web3 infrastructure businesses. Data from the crypto exchange CoinDCX indicates that 45% of retail portfolios in India feature blue-chip cryptocurrencies. Lysto, a gamer’s network, projects that India’s gaming industry will reach $9.2 billion over the next five years, with Web3 gaming emerging as a key contributor.
India is also leading in crypto adoption based on onchain metrics, followed by the US, the United Kingdom, China, and Nigeria. Several central and state government initiatives support Web3 growth, focusing on use cases like land registry, digital certification, and supply chain management. Leading layer-1 and layer-2 ecosystems and a young developer population are driving innovation and growth.
However, the Indian Web3 ecosystem faces challenges such as speculative perception, a pro-blockchain but anti-crypto government stance, tax inequities, and political perception. These issues present significant hurdles but also opportunities for future growth and innovation in the sector. India’s developer prowess is globally renowned.
Having dominated the Web2 space for major information and technology companies, Indian developers are now driving innovation across multiple Web3 domains. India has become a hub for prominent projects such as Polygon, CoinSwitch, Biconomy, CoinDCX, Sentient, and Transak. Investors globally, including Accel, PeakXV, Lightspeed, Kalaari, and Elevation, have shown confidence in Indian founders, contributing significantly to the funding pool.
The report highlights that crypto adoption surged in 2024, driven by Gen Z and Millennials, with the 27-40 age group leading new token investments. Notably, 35 percent of the crypto investor base is Gen Z. Central and state governments in India, along with large and mid-sized companies, have been embracing blockchain technology for various use cases.
In government initiatives, blockchain has been adopted for land registry, digital certification, and supply chain management, creating 84 million records across 20 divisions, six products, and seven states. Additionally, the government’s central bank digital currency (CBDC) initiative has amassed five million users with the participation of 16 banks. India boasts 4.76 million open-source developers, ranking higher than Brazil, China, Indonesia, Japan, and Mexico, with expectations to surpass the US by 2028 to have the largest developer community.
India’s booming Web3 startup ecosystem
According to the report, 45.3 percent of Indian crypto developers are engaged in code contributions, while 29.7 percent and 22.4 percent are involved in bug fixes and documentation efforts, respectively. “Almost 85 percent of Indian developers are under the age of 27.
This is the opportunity. Their skills and experience will shape the future. For all L1s and L2s out there, you cannot miss India,” said Sharanya Sahai of Hashed Emergent.
While regulatory barriers such as the lack of a pro-web3 policy agenda, high tax rates, and limited ‘real-world use cases’ perception act as challenges, enabling sandbox access and establishing accelerators for the Web3 sector, along with a robust regulatory framework, can provide opportunities for growth and innovation in India’s Web3 ecosystem. India’s Web3 industry leaders have gathered in Bengaluru to discuss the digital renaissance driven by blockchain-based fintech. On Wednesday, December 4, Web3 venture capital firm Hashed Emergent launched the two-day headliner event of India Blockchain Week 2024 in the country’s tech hub.
This marks the second edition of IBW, which made its debut in 2023. Leadership teams from leading crypto, DeFi, and blockchain firms are attending the event, engaging directly with India’s esteemed Web3 developer community. Key topics include the urgent need for security solutions to prevent incidents like the recent WazirX hack, as well as a deeper understanding of self-custodial wallets and their potential drawbacks.
Discussions on self-custody wallets have intensified in recent months, fueled by a series of hacks, particularly those targeting custodial crypto exchanges. These wallet providers allow users to retain control of their private keys instead of storing them within the provider’s system. In one of the event’s first panel sessions, CoinDCX CEO Sumit Gupta, Mudrex co-founder Edul Patel, and Bitgo COO Chen Fang addressed the current limitations of self-custody wallets, agreeing on the challenges that still need to be overcome.
“If you can handle self-custody, and you understand all of that, always move funds from custody. That’s the ethos with crypto. That’s the ethos around the blockchain.
The problem is that a lot of people don’t know how to use it. Much more crypto has been lost for life by self-custody mistakes than hacks that aren’t inside jobs,” Patel said with Gupta and Fang in agreement. The need for increased education and awareness around crypto and Web3 was also a key topic of discussion across panels.
Industry leaders emphasized that until more people understand the challenges behind the much-hyped solutions in Web3, new entrants should approach with caution. Among the key highlights, the “Trump effect” on Bitcoin—driving its value close to $100,000 (roughly ₹84.7 lakh)—has sparked excitement within India’s Web3 community. The recent departure of Gary Gensler as chair of the US SEC has also fueled optimism about crypto’s growth in the US, with hopes that this positive shift will extend to other countries.
Under Gensler, the SEC had clashed with crypto giants like Binance, Kraken, and Coinbase, drawing criticism for stifling sector growth. Later panels will feature representatives from Web3 firms such as Polygon, Supra, Aptos Labs, Monad, Astar Network, and Pi42, who will engage with stakeholders, investors, and developers in the Web3 space.
