The next stage of Web3
How The Graph, 3box, Unlock Protocol are laying the bricks for web3
|Brian Flynn||May 10|| 5|
NFTY is a newsletter about the latest trends and stories of crypto & gaming. Each week, I analyze the latest trends and happenings of how the story is unfolding.
The past month in crypto has seen more development activity than ever before. This includes:
The launch of several DeFi products: FutureSwap, tBTC, Compound governance, Curve, Balancer, Zapper.
The launch of some of the biggest smart contract protocols: NEAR and Solana
So the question that everyone starts to ponder is: what’s next? I believe we’re about to see an explosion of web3 applications being born from the Middleware layer of Ethereum. Here are 3 projects that will drive this movement:
The Graph is one of those projects that developers can’t live without. It powers dozens of the most popular applications including sites like Uniswap.info, Pools.FYI, Rainbow Wallet, and many more. Providing a way to index on-chain information and retrieve with a simple API endpoint is a powerful way to quickly build decentralized applications without having to write any line of solidity.
3box & Ceramic Network
At first glance, 3box might seem dull to the average user, but the possibilities of 3box expand much wider than what exists today. You can use store any piece of data attached to an address directly inside of a 3box profile without so that other projects can read from it with the 3box API. All without spinning up your own server. This provides a way to share off-chain data between projects in a modular & composable way. I’m even more excited about Ceramic Network (3box’s new storage protocol) which will make it easy to have digital resources be interoperable and shared between applications, regardless of what blockchain it’s on. Imagine being able to read data from Ethereum and rewarding users on NEAR if they link their Ethereum and NEAR accounts together under a single 3ID.
Before cryptonetworks, subscriptions were historically the best way to align incentives between users and companies. If the user wants to use the product, they pay for the month. If they don’t, they cancel. In crypto, this is the opposite: users pay one time fees for access. Enter Unlock Protocol. With Unlock, users can (soon) purchase a subscription using any ERC20 currency that the developer specifies. That means projects can start to monetize their own projects with a programmable subscription before they think to introduce their own token. If the developer is thinking of creating a token, Unlock will make progressive decentralization easier because incentives will have already started to become aligned.
What’s next for web3?
We’re on the brink of the next stage of web3—and I believe that has to do with interoperability instead of composability. Interoperability gives developers the ability to read and write data across protocols, creating entirely new applications that weren’t before possible. On Ethereum, a lot of the interoperability that will exist will be strictly around decentralized finance—so the ecosystem will stick with building blocks like the Zerion DeFi SDK to make it easier financial holdings/data across these applications.
But the more interesting picture comes with new smart contract protocols with higher scalability. With blockchains like NEAR and Solana, transactions and finality will be fast giving the user an experience that feels similar to Web2. Computation will be cheaper, allowing for more interactions on-chain. With more interactions on-chain, there will be more transactions, and we can then start to read data from applications with potentially hundreds of millions of transactions per day.
And we’ll need those middleware protocols like Unlock, 3box, and The Graph compatible with these new protocols to help establish new business models, new identities, and easy ways to share data across applications.
I’m excited for the next wave of applications that aren’t about NFTs or DeFi. It’s coming.