Web3 Buzzwords & Social Trends To Watch
By Anju B Nair, Sr. Technical Content Writer, Kerala Blockchain Academy
Disclaimer: Web3 do not synonymous with Blockchain. It amalgamates different technologies, becoming a catch-all term for a new, better internet. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to return control in the form of ownership to the users. This article explains Web 3 from a blockchain perspective, and the examples listed in the article are for information purposes only. Kerala Blockchain Academy does not endorse them for any motive.
While the buzzwords of Web3 have received a lot of attention and hype, it is now the time to understand what they really mean and why they matter. Let’s dive into Web3 space and identify how the catch-all-term can become something of social good. Let’s gather the societal trends that have contributed to Web3, calling it the pivotal necessity of the future.
So before we begin, let’s get to the origin. Everything started with a simple question- how can we most effectively work together towards collective outcomes?
This question is as old as time. Given the complexity of human coordination, this question has been perpetual throughout human history. Nearly every organization, enterprise and market constantly checked for solutions, be that the democracy or the technological innovations that catalyst the ability to coordinate. Though it extended a great help in the formative period, it now seems to suffer from severe setbacks of centralisation. For instance,
We are tired of being the product. The powerful technological businesses have gained too much control, with disastrous repercussions for privacy, advertising, misinformation, censorship, and lack of competition. We are the product because we are the users; we must exchange our data for services, and mega-platforms have discovered a lucrative niche as the middlemen.
Government distrust has risen. Around the world, there is an increasing amount of mistrust and discontent with many governments; just in the United States, “poor public trust in the federal government has persisted for nearly two decades.” Many people now have a growing mistrust of their governments, institutions, and media due to political polarisation, authoritarian administrations, and corruption.
Wealth inequality is growing. Now, 71 percent of people on the planet live in nations where economic disparity has increased. World wealth inequality has only gotten worse due to a lack of social mobility and access to financial services and technologies. Many of us are searching for ways to ensure our financial stability as the wealthy gain richer. We, therefore, need to be beneficiaries of the wealth generated by internet tools and services rather than being the product.
Why Web 3?
Web3, the nearing iteration of the internet, strongly emphasises decentralization. Here, decentralization is the transfer of authority from a selected few into many people's hands. Decentralization is based on the core values of equality, diversity, democracy, and the wisdom of the public. With the help of cutting-edge technologies like blockchain, smart contracts, and cryptography, Web3 intends to promote greater decentralization at every point. Several buzzwords surround Web3- DAOs, NFTs, crypto, stablecoins, DeFi, DApps — describing different categories of decentralization via blockchain. Why Blockchain- Blockchain will act as the underlying technology enabling Web3 to provide a distributed database allowing a secure, transparent record of transactions over a distributed network of computers that no single person controls.
The Progression
Web3, right from inception, has experienced popularity. Stakeholders from numerous industries have become interested in Web3’s rapid expansion. The venture capital group Andreessen Horowitz is putting $7.6 billion into Web3 experiments. Around $1 billion is kept in the coffers of several DAOs. Legislators worldwide are also paying attention; in the US, numerous states have introduced DAO laws, federal senators have proposed DAO-related proposals, and even the White House has issued an appeal for the responsible development of digital assets.
The above image illustrates the existence of Web3 applications at various stages of the Gartner Hype Cycle. The featured themes are immersive experiences, including decentralized identity, the metaverse, non-fungible tokens (NFTs) and Web3. Let’s get to some of them.
DAOs, which enable individuals worldwide to coordinate together in unique ways, are one of the more intriguing uses emerging from Web3. The term “Decentralized Autonomous Organization,” or DAO, refers to a large class of coordinating experiments. To make it easier, DAO can be considered a “community-led entity without a central authority”.
Under the framework of DAOs, typically, a group of people often band together with a shared mission, pool their resources, and leverage blockchain and smart contract technology to make and execute collective decisions.
When you take a closer look, from an ideological standpoint, DAOs are most akin to member-run, member-operated, and member-owned cooperatives. Each member is economically incentivized to contribute to the organization’s success. According to current estimates, 10% of the world’s employed population is engaged in cooperatives, one of the earliest forms of collective human cooperation. DAOs share many cooperative ideas, but the only difference is they leverage the blockchain technology of Web3 to provide effective, safe, and autonomous instruments for governance and coordination.
That said, it is also essential to quote that the DAO works differently with different missions and governance frameworks for different decentralized autonomous practices. Today there are DAOs for almost any mission humans can coordinate and organize around.
Similarly, the NFTs…
NFTs are Web3’s favourite technology. Assuring complete asset ownership in a cheat-prone market, the blockchain application soon created a fanbase. The artists can produce and exchange digital assets in a decentralized, trustless manner by utilizing blockchain technology and smart contracts. It provides a platform for artists to express themselves and share their thoughts with the world, allowing them to emerge around shared goals and ideals.
Before the NFT model, the world was introduced to corporate social responsibility (“CSR”). The initiative occurred when the businesses noticed customers sought a deeper connection with brands. The relationship with customers, however, ended there because there was no bridge to help those consumers. Beyond the marketing and transactions, any connection existed to the secondary market or community. NFTs sparked a shift in how people view sustainability and social responsibility. For instance, many NFT-related projects are creating road plans that describe how they want to use their NFTs to add value to society and enhance the environment. For instance, Apocalyptic Apes, a Bored Ape Yacht Club spinoff, aims to help clean up the planet via ocean cleanup and carbon offsets. Similarly, Typical Tigers, a smaller project, focuses explicitly on funding tiger rescues following the instructions provided by their holders. These NFT projects starkly contrast conventional corporate structures solely concerned with shareholder value and profit.
Regenerative Finance (ReFi)
Regenerative finance is a new approach to finance that seeks to promote sustainability, social equity, and environmental regeneration. Blockchain technology is being increasingly used in regenerative finance because of its ability to facilitate secure, transparent, and decentralized transactions without the need for intermediaries. The goal of regenerative finance is to create a financial system that sustains itself and regenerates and strengthens the communities and ecosystems it serves. Blockchain technology can also be used in regenerative finance to create a transparent and decentralized financial system that supports regenerative practices. For example, a regenerative agriculture project could raise funds through an initial coin offering (ICO) or by accepting donations in cryptocurrency. While there is still much to be explored in terms of how these two fields can work together, there is potential for them to create a more regenerative financial system that supports the health and well-being of both people and the planet.
Here are some ways in which blockchain is helping in regenerative finance:
- Transparent and auditable transactions: Blockchain technology enables transparent and auditable transactions, which can help to increase trust between parties. This can be particularly useful in regenerative finance, where there is often a need to ensure that funds are being used for their intended purpose.
- Decentralized Finance (DeFi): Decentralized finance (DeFi) is a growing area of blockchain-based finance that aims to create a more inclusive financial system by eliminating intermediaries. DeFi platforms can provide access to financial services for the unbanked or underbanked and can also help reduce costs and increase efficiency.
- Tokenization of assets: Blockchain technology can enable the tokenization of assets, such as real estate, commodities, or even carbon credits. This can unlock value in assets that might otherwise be illiquid or difficult to trade. Tokenization can also facilitate the creation of new financial instruments that are aligned with regenerative finance principles.
- Impact Investing: Impact investing is a growing area of finance that seeks to generate positive social and environmental outcomes alongside financial returns. Blockchain technology can help increase the transparency and accountability of impact investments, attracting more investment into the sector.
- Carbon Markets: Blockchain technology is being used to create carbon markets, enabling the buying and selling of carbon credits. Carbon markets can help incentivize the reduction of greenhouse gas emissions and provide a new source of revenue for regenerative agriculture and forestry projects.
ReFi Projects: KlimaDAO, Climate Collective
The above is a small percentile of Web 3 trends that are emerging. The concept is still in its infancy, and many experiments are constantly explored for more inclusiveness.
In brief, Web 3 is the next phase of the internet, where decentralized technology such as blockchain is integrated to create a more open and transparent digital environment. With this new technology comes new social trends shaping how we interact online.
- Decentralized Social Networks: Decentralized social networks are social networks built on blockchain technology. Any single entity does not control these networks, and users have more control over their data and privacy. Some examples of decentralized social networks are Mastodon, Steemit, and Minds.
- Crypto Communities: Crypto communities are online communities that revolve around cryptocurrencies and blockchain technology. These communities are often very passionate and have a strong sense of community. They also provide a platform for discussing and sharing information about cryptocurrency and blockchain technology.
- NFTs: Non-fungible tokens (NFTs) are unique digital assets stored on a blockchain. NFTs can be anything from digital art to music, often sold in online marketplaces. NFTs have created a new way for creators to monetize their work, and they have also created a new market for collectors.
- DAOs: Decentralized Autonomous Organizations (DAOs) are organizations that are run on a blockchain. They are often used for decentralized decision-making and governance. DAOs provide a way for people to unite and make decisions transparently and democratically.
- Web3 Gaming: Web3 gaming is the integration of blockchain technology into online gaming. This allows for more transparency and fairness in gaming and new ways to monetize and reward players. Some examples are Axie Infinity and Decentraland.
Footnotes:
[1] Evolution of Web3: https://medium.com/blockchain-stories/evolution-of-web-76d38463e9c0
[2] Web 3 and Blockchain: https://medium.com/@kbaiiitmk/web-3-0-through-the-lens-of-blockchain-26abbe439a98
[3] Non-Fungible Tokens: https://medium.com/@kbaiiitmk/nfts-how-do-they-work-fbf4cfc2ec9c
