What is Web3/Web 3.0?
Web3 is a name given to a range of peer-to-peer technologies, like blockchains and distributed file systems (e.g. IPFS), that are used to build modern decentralized apps (dApps). It lets users not only create and consume content, but also participate in the ownership of the content they create.
Its predecessor was the centralized internet, known as Web 2.0, which was fueled by the emergence of social media platforms and gave users the ability to interact with each other. As a result, content was not only generated by companies, as was the case in Web 1.0, but also by individual users. Web 2.0 imposed new challenges, however. A limited number of large companies, like Google and Meta, control the majority of traffic, but users do not benefit from the monetization of the content they generate for these companies. Web3 solves these challenges by being built around four core principles:
What are potential use cases?
So, what can Web3 be used for in the real world? Below we’ve listed a number of different use cases:
- Decentralized Autonomous Organizations (DAOs): DAOs are decentralized communities managed collectively by their members. Decisions are based on proposals and votes by the members. They provide the possibility to collaborate safely with strangers and commit funds to work jointly on a project. An example could be DAOForest that tries to save endangered species, plant trees, and fight climate change.
- Decentralized Finance (DeFi): DeFi refers to an open and global financial system that is accessible to everyone with an internet connection and managed in a completely decentralized way, through smart contracts. An example of a DeFi protocol is Aave which enables users to lend and borrow cryptocurrencies.
- Decentralized Science (DeSci): DeSci proposes to open up science by utilizing decentralized research institutions and funding bodies. To achieve this, DeSci utilizes DAOs where researchers can apply for funding. VitaDAO is an example that collects funding for longevity research.
- Blockchain Games: By utilizing Web3 principles, games can create more personalized economies where players actually have ownership over their in-game items. These items could even be sold in the real economy for fiat currency (e.g. Euro, USD). An example for such games might be Axie Infinity or Splinterlands.
- Metaverse: The idea is that people experience the internet immersively through digital worlds, instead of just watching it through the computer screen. Individuals would be able to move around as digital avatars and interact with each other. Different companies are already working on it, such as Facebook—which has even changed its name to Meta.
- Creator Economy: Web3 offers creators such as artists or musicians several advantages. They can sell their digital content directly to consumers without having to rely on third-parties. In addition, they can utilize royalty payments or use smart contracts to track secondary sales and receive constant royalty commissions. An example of a decentralized marketplace of NFTs might be Unique.One which enables creators to sell their art.
At MVP Factory we believe that building the most compelling products will decide who wins the next internet era, attracting the best developers and entrepreneurs. Decentralized networks can better align the incentives of all participants and will be able to attract the best people to work towards a common goal.
Innovation drives growth, and there is a ton of innovation happening in Web3 at the moment. The culture is young and vibrant, reminiscent of the early days of the internet with small communities playing around with new technology—it’s like the new cool underground club in Berlin that everyone wants to visit. The potential is still unclear, but at MVP Factory we’re enthusiastic about it and look forward to seeing new and experimental communities building the products that will form a more decentralized future.