Web3 is quickly becoming mainstream in a span of a few years due to awareness campaigns and its endless potential. We should note that Web3 encompasses many emerging technologies that have evolved as separate entities, but full-scale integration is yet to take place, which might occur soon. While we have been witnessing how user-ends of the Web3 platforms look, most people are unaware of what happens behind the scenes at the back-end. Learning about basic Web3 infrastructure is a must for any Web3 enthusiast to know about the back-stage action, which is crucial for achieving Web3’s goals. This blog exclusively focuses on Web3 infrastructure and how it powers all its applications to life.
Web3 – A Glance
Web3 or Decentralized Web or Semantic Web is the name given to the internet powered by blockchain technology. Some experts refer to Web3 as a conglomerate of various growing technologies, including blockchains, artificial intelligence, machine learning, internet of things, virtual reality, and augmented reality. While definitions might vary, blockchains host platforms everywhere in Web3, and other facets are used in those platforms. Talking about blockchains, they are distributed digital ledgers that can record transactions that all members of the ledger can verify. Even though the term Web3 was first used in 2014 (and became popular in 2021), its roots can be found in the late-2000s when Bitcoin was released as the first-ever blockchain application.
While the “Dotcom bubble” shed light on how the internet would function in the early days of this millennium, Web2 was called revolutionary as it enabled end-users to participate in the internet. Social networking and e-commerce paved the way for a modern lifestyle that made Web2 a comfortable option. But, terabytes of user data were stored in the centralized servers belonging to giant corporations that benefited massively from using the information they had. Also, incidents of data breaches in the recent past meant that security concerns around Web2 became common among people.
Therefore, decentralization was touted to be the savior for such problems as data would be distributed across nodes (or devices in the physical world), security would be enhanced, and breaching attempts would be fruitless. Early glimpses of Web3 technology brought excitement to a group of individuals, and there has been no looking back ever since. The technology also prioritizes the end-users as it allows them to be actively involved in ventures’ proceedings and earn cashable rewards in return. Such activities are common in Cryptocurrency exchanges, NFT marketplaces, and decentralized finance platforms.
Platforms that Build on the Elements of Web3 Infrastructure
Given below is a list of business platforms that work on the various functional elements of Web3 infrastructure to make it a better place for users.
- Security – OpenZeppelin and Certik.
- Storage – Arweave, Storj.io, IPFS, and Filecoin.
- Analysis – Covalent, Chainalysis, Dune Analytics.
- Communication – XMTP, Matrix, and Swarm.
- Governance – Sybil, Boardroom, Snapshot, and Tally.
- Identification – Spruce, ENS, and Unstoppable Domains.
- Transactions –
- Buy/Sell – Uniswap, Curve, and Set.
- Borrow/Lend – Aave, Compound, and Cream.
- Stake – Lido and Staked.
- Insure – Risk Harbor and Nexus Mutual.
- Market Makers – Amber and Wintermute.
Factors that Dominate the Build-Up to Web3 Infrastructure
- Security – Infrastructure providers should ensure that the protection offered by their solution should not be compromised by any means, as retrieving lost or stolen data over the blockchain is a challenge, although transactions can be traced. While trusted cloud providers such as AWS and Azure are employed today, they bring in the problem of Web3 centralization.
- Decentralization – Distributing data is easier said than done as elements of centralization still exist in today’s Web3 ventures, and central cloud servers are controlling many ventures’ nodes. The world has even witnessed Web3 businesses conducting heists to bring back stolen virtual assets. Hardcore decentralization is yet in a nascent stage, and any business in the future should ensure that transactions are transparent and the involvement of centralized nodes gets minimal. Community participation is essential for this to become possible as the requirement for nodes grows every day.
- Redundancy – With nodes getting distributed across devices globally, the problem of unstable nodes might become common as home-based devices might get shut down for some reason. Such stoppages could lead to service shutdowns, and Web3 businesses need to look for alternative solutions to keep their platforms alive even during peak traffic.
- User Experience – One of the underrated factors in deciding the Web3 infrastructure, user experience for developers on blockchain networks is complicated that dictates the platform quality. Businesses working on Web3 infrastructure should ensure that developing on Web3 is simplified for widespread adoption to become possible.
- Pricing – Web3 infrastructure prices should be predictable via simple calculating mechanisms as ventures need to file annual and quarterly budgets to meet tax regulations. Also, knowing the price eliminates tensions around projects that aim to have extensive features.
- Scalability – While many recent networks say that they have resolved concerns regarding scalability, the problem of not having a huge user base is an issue that could be tackled once their user sizes grow. It is also important to note that with growth in user base, the number of transactions will increase, and they should be catered to quickly.
- Adoption – Web3 programming has grown immensely with special languages such as Solidity, Rust, Go, and Node that can help businesses get on board the virtual realm. Support from existing languages like Python, Java, and C# are still required until the Web3 ecosystem becomes totally self-sufficient.
Henceforth, developing a sturdy and seamless Web3 infrastructure is vital to the growth of the ecosystem. The evolution of user-facing Web3 applications is currently on the rise, and the back-end technology to supplement them should detach from depending on centralized nodes. Blockchain App Factory’s research personnel have been actively contributing to making Web3 truly obedient to all its goals without relying on intermediaries. We have found some success, and we strive to make it better through our development projects for our global clients. Join hands with us if you want to be part of creating the “real” Web3 ecosystem.