The Crypto Insider Report #13: The paradigm shift in Web3
Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors.
More and more investors with seniority in "traditional" tech, people who have seen Silicon Valley grow and change the world, are starting to talk publicly about Web 3 and the new valencies it throws at the market. I watched a few weeks ago and reviewed the other day on a plane the podcast in which Tim Ferriss spoke with Naval and Chris Dixon. I ended up with four pages of notes and so many thoughts that it takes hours of walking just to put them in order.
Given that we see crypto & blockchain becoming a hot topic not only for the big brands (Adidas, Pepsi, Nike, Budweiser) but also for the colossi of the big 4 (those who haven’t watched the video with Brody from Ernst & Young - it's here), the bigger chapter in the future histories written about this period will be called web3. In order to be a defining concept that encompasses all the important aspects, it needs to have a "bigger-than-life" air and a revolutionary attitude.
The balanced and cerebral attitude always brings more added value in a discussion, but there are moments in history when emphasis and madness played an existential role in the transition from one stage to another. By default, most people are conservative and don't like the changes that come with the unknown and new potential dangers, so a handful of people need to force the paradigm shift.
And it's not easy because there's always a gazillion of valid arguments for why the status quo is better than what's next.
This is where the role of web3 builders comes in, who, by their technical and misfit character, often end up doing what they think is important and not what would sound good to the masses. This makes adoption difficult, no doubt, but also enhances it in the long run by paving the way with hints and useful and attractive products.
And speaking of our role, after all, I think that the most drastic change from web 2 will take place here: if for Facebook or Twitter, the presence of Zuck and Jack at the top of the pyramid was seen as essential to the success of the companies, in the future, bootstrappers will write only the first chapter.
We will have to get used to the idea that we will leave our "baby" from the stages in which they barely walk on their feet so that others, a community that adheres to the mission, take them to the kindergarten and then to school on the long road to adulthood. 0xMaki did their duty at Sushi, and now they’re trying the same thing at Tokemak. Andre Cronje likewise. And there are many others like them. It's not superficiality or the desire to capture all the upside because most bootstrappers (unlike tech companies) leave over 60-70% of the value on the table; it's the desire to use your knowledge and creativity in the most productive and fun way possible.
Web3 will definitively change the entrepreneurial mindset.
Take care,
Vlad
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The first steps in crypto: What Is Web 3.0?
To better understand Web 3.0 and what sets it apart from the Internet we know and use, we must first look at Web 1.0 and Web 2.0.
Web 1.0
Called the Static Web, Web 1.0 was the original internet that offered access to limited information. In the 1990s, the websites were built with static HTML pages, so they only displayed information, with users being unable to change the data.
As a result, there was little to no user interaction, and the first internet was more like a one-way highway where only a select few created the content, and the information came from directories. Web pages were designed for information consumption and served from expensive servers.
Web 2.0
That started to change toward the late 1990s. In the following years, Web 2.0 made the internet more interactive. Mobile, social, and cloud were the three core layers that led to the rise of this new Web.
Known as the Social Web, Web 2.0 enabled the development of interactive platforms such as Facebook and YouTube due to advancements in web technologies such as HTML5 and Javascript. This allowed for user-generated content and made it possible to distribute and share data between various platforms and applications.
What Is Web 3.0?
Even though the current internet generation has changed things considerably, it has drawbacks, such as centralization, surveillance, and exploitative advertising. Here is where Web 3.0 comes in.
The third generation of the internet is aimed at being an open, intelligent, decentralized internet. It is thus also referred to as the Decentralized Web, where data will be interconnected in a decentralized way. Internet applications and services will be powered by distributed ledger technology, with the most common one being the blockchain.
Also, AI and machine-learning algorithms will play a crucial role. The aim is to use them to provide faster, more relevant data to end-users. That is why Web 3.0 is also called the Semantic Web.
Websites using AI should have the ability to filter the available data and provide the user with the information that it finds appropriate. The aim is for AI to enable machines to interpret the meaning behind the data, that is, their semantics, and, therefore, deliver considerably smarter user experiences.
Advantages of Web 3.0
The first steps toward Web 3.0 have already been taken, with decentralized infrastructures and application platforms being the focus for many developers and internet users. Here are some of the benefits of Web 3.0 as we envision it now:
Decentralization – Web 3.0 will have no central point of control, which will displace centralized tech giants and enable individuals to regain ownership of personal data. Decentralization and blockchain technology will thus change the way data will be used and monetized, with the individual being the one in control of it.
Greater information availability and interconnectivity – given the decentralized nature of Web 3.0, larger data sets will be available, which means there will be more information for algorithms to analyze. This will further help the individuals get more accurate information that will cater to their specific needs.
Increased browsing efficiency – the developments we’ve seen in the last few years have made search engines better at showing relevant results. However, some of the systems used, such as the social tagging systems, can still be manipulated. With Web 3.0 and smarter algorithms, AI should be able to filter even manipulated results and provide users with unbiased data.
A personalized internet experience – by applying semantics in the Web and enabling machines to decode meaning through data analysis, Web 3.0 will deliver a personalized internet experience. For example, by leveraging smarter AI systems, Web 3.0 can improve advertising and provide users with ads that are useful and relevant to their needs.
Conclusions
Large corporations and centralized repositories have dominated the internet, leaving individuals with reduced control. Web 3.0 aims to change that by making the individual a sovereign. Its decentralized protocols will enable individuals to connect to a new internet generation where they will not only own their data but will also control who profits from their time and information.
Furthermore, the use of smarter AI algorithms and machine learning will ensure a more relevant user experience.
Animation of the day: Avalanche explained with animations.
For more animations: Cryptomatics
Tania
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The Altcoin Pulse
1. The first set of parachains (Acala, Moonbeam, Parallel Finance, Astar, and Clover) is live on Polkadot.
2. Polygon's proposal to launch Uniswap v3 on its own chain has been approved. The launch will come with a $20m fund to boost liquidity and adoption.
3. Terra ranks second in a top of the Total Value Locked (TVL) on different chains. The growth was based on Terraswap, an AMM with +75% in TVL over the last 7 days ($1.9bn), and Anchor Protocol, a savings / passive income protocol, with +20% in TVL over the last 7 days ($7.2bn).
https://thedefiant.io/terra-defies-selloff-surges-tvl-binance/
4. ConsenSys has released a report on the trends observed in DeFi in Q3.
https://consensys.net/blog/news/trends-in-defi-economy-a-snapshot-of-q3-2021/
5. Several future token releases and listings, and other events.
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Interesting Headlines
1. The first NFT drop from Adidas.
https://www.theverge.com/2021/12/17/22843104/adidas-nfts-metaverse-sold-bored-ape
2. BitDAO, a decentralized asset manager, and Mirana Ventures, a crypto investment firm, have formed EduDAO, a DAO addressed to the students of a group of universities in the US-UK-China that will deal with the promotion of grants and R&D initiatives in the crypto field.
https://decrypt.co/88588/bitdao-forms-dao-harvard-oxford-student-groups-fund-crypto
3. Bitwise has launched a blue-chip NFT index fund for accredited investors in the US. The index contains 10 major projects in the arts & collectibles segment, including CryptoPunks, Bored Ape Yacht Club, VeeFriends, or Cool Cats.
https://cointelegraph.com/news/bitwise-launches-nft-index-fund-for-accredited-investors
4. Last week's glitch on CoinMarketCap shows the usefulness of a decentralized oracle like Chainlink for blockchain projects.
https://finance.yahoo.com/news/coinmarketcap-glitch-creates-swathe-paper-111743313.html
5. Dune Analytics, a project focused on crypto data analytics, raises funds in a funding round that values the company at $1bn.
6. 99% of the total volume traded by BTC was by >$100k orders in Q4 (institutions and whales). Comparatively, the orders of these entities represented 97.5% of the total volume in Q1 2021 and 58% in 2017.
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Tweet of the week:
Elon's tweet about cognitive biases. It is worth reading, printing, and hanging on the wall.
Business book of the week: Difficult Conversations: How to Discuss What Matters Most by Douglas Stone. About the importance of emotional intelligence and how to have conversations that matter so that the best outcome is reached.
Youtube clip of the week: Speaking of Naval -