Using the concepts of decentralized design and decentralized infrastructure, Web3 is an open-source technology that allows consumers to create and own digital assets. The infrastructure is built on top of a permissionless blockchain network. Unlike traditional networks, Web3 is resilient and persistent. It is also anchored in cryptography, which gives users a new type of trust. Web3 is a new form of internet that focuses on consumer empowerment, rather than on intermediaries.
Web3 crypto projects build resilient peer-to-peer decentralized applications. These projects are funded by cryptocurrencies and are part of the vision for a decentralized internet. Unlike traditional financial institutions, Web3 payment infrastructure is powered by independent digital asset owners, who pay a fee to the liquidity pool. This decentralized fee structure allows multiple parties to validate transactions. Tokens are created on existing technologies, but they can also be created without participating in Web3 infrastructure.
Web3 also offers a new form of trust, which is based on proof of ownership. Instead of relying on traditional financial institutions, individuals can directly manage their assets, making them more resilient and secure. The digital assets can be in the form of cryptocurrencies, NFTs (nonfungible tokens), or pure fiat financial transactions. Smart contracts are used to programmed these assets. These assets are verified on a distributed blockchain network, and they can be transferred directly through the blockchain.
There are a number of Web3 projects that are creating cryptocurrencies, including Steemit, which allows users to earn tokens for posting social media content. These tokens can be promoted to consumers and can be used to incentivize desired behavior. Other projects include Filecoin, which uses open-source technology that is resistant to censorship. It distributes data among multiple storage providers. It also uses the Graph protocol to facilitate governance, which has been dubbed the Google of blockchains. The protocol has been incorporated into many industries, including virtual reality entertainment.
Some of the Web3 crypto projects are developing decentralized social media platforms. These platforms aim to improve artist-fan interaction, while at the same time allowing creators to better monetize their content. Web3 social media platforms are also seeking to develop alternative revenue streams. In 2022, Web3 companies raised $13B in equity funding.
Another Web3 project, Unslashed Finance, uses smart contracts to pay out Web3 users who are affected by hacks, smart contracts, or exploits. The company raised $2M in a seed round in 2021.
Web3 crypto coins have the potential to become a major force in the future of the internet. A recent industry report by DappRadar found that Web3 crypto coins were resilient. It also notes that a growing number of early-stage venture capital firms are setting their sights on crypto deals.
The future of the Internet is unclear, but the Internet has already evolved to the point where some firms are struggling with the shift from centralized platforms to decentralized infrastructure. For example, financial firms are grappling with the impact of the metaverse, which provides opportunities for financial services. However, the decentralization of resources will also transform the nature of finance. This means that firms like Coinbase can no longer lock in monopolistic positions.