The world witnessed a frenzy early this year with web3. It showed the amount of innovation taking place in this segment. At the heart of all this user engagement lie decentralized applications that are powering the web3 ecosystem. A good chunk of the present influx of users, however, try decentralized applications mainly due to the hype. To not much surprise, those coming to check out the ecosystem’s applications are staying to use them.
From finance to art, web3 developers have been creating all kinds of decentralized applications that mirror the use cases of their web2 counterparts. Unlike their web2 counterparts though, decentralized applications are turning out to be superior in several ways. Singlehandedly, they are the reason why web3 has blown up.
Decentralized applications, commonly referred to as dApps, run on blockchain networks like Ethereum. They function autonomously thanks to the execution of the smart contracts that they’re built over. Smart contracts are essentially open-source code that removes the need for human intervention. The workings of these applications, therefore, become totally decentralized.
Decentralization being an inherent concept in these applications is bringing changes to the current state of the web. Collectively, all dApps forming the web3 ecosystem are aiming to derail the tech giants of today that are monopolizing the web.
dApps can be looked at as an ethical alternative to the applications existing in the current web landscape. For example, applications like Instagram and Uber can be created and deployed on web3 infrastructure. The difference? These applications do not follow shady practices like the web2 ones.
All dApps are community driven. The profits they generate are via dApp economics relying on native crypto tokens. Of course, the value is reflected through user satisfaction. This is what differentiates web3 applications from their web2 counterparts. Driven by maximizing profits, web2 applications put their own interests before that of their users. This has led to users looking for alternatives that are being fulfilled by dApps.
Replicating web2 applications to offer better products is one thing. However, the web3 developer community is bringing about new innovations that web2 is yet to see. dApps are fitting into every section that web2 operates in. With their unique offerings, they are attracting new users to the web3 ecosystem.
Decentralized finance, for the past few years, has been bringing about major changes that web2 financial companies are yet to offer. Traditional finance has limited itself to services and products like lending, borrowing, and insurance just to name some. However, DeFi on web3 is a whole different ballgame.
Of course, services and products like those of traditional finance exist. But newer and crazier ones like swapping and yield farming are becoming the investment norm on web3. They generate returns that are astronomically larger than those given by traditional finance. Decentralized Exchanges like UniSwap are highly popular for the DeFi services they offer, allowing individuals to invest without the need for any intermediary.
Although DeFi applications were one of web3’s first breakthroughs, web3 extends beyond finance. Moreover, the need for a new iteration of the web came from certain social media start-ups growing to become monopolies by harvesting user data. Web3 social networking dApps give the power back to the user, like preventing censorship and allowing the free flow of information to everyone.
Besides, web2 companies have been raking in billions of dollars through the efforts of their users. The users and creators who are contributing the most to these platforms’ growth are getting paid pennies on the dollar. dApps and their reliance on blockchain native tokens will change the incentive structures. Creators can now get paid generously by their audiences through crypto tokens. Sapiens, for example, is a truly open web3 ‘social protocol’ that offers newsfeeds and posts curated by its user community. It does away with collecting user data for better-curated feeds, a pretext used by web2 social networks to harvest data for unethical reasons. Moreover, it uses various native tokens to remunerate curators and creators for their efforts on the platform.
Another facet of web2 known for muffling the creator economy is music streaming. Music artists have constantly dealt with the predatory practices followed by record labels and distributors for decades. On top of all that, music streaming services entered the picture and negatively impacted the music industry. Their business model does not prioritize incentivizing artists, offering very less pay. This makes it impossible for smaller artists to make a living off their music.
Audius, a web3 music streaming dApp is bringing changes to the exploitative behaviors faced by artists. Through their native payment system, Audius lets the fanbase reward their favorite artists for their creations. Artists can expect to bag larger revenues as compared to what they presently do with music streaming applications operating over web2.
Like streaming applications that make use of complex algorithms to provide personalized music suggestions, browsers too function similarly. They offer relevant search suggestions and results, and advertisements by collecting as much user data as possible. However, since they are the gateway to access the web, most users normalize such practices as a trade-off.
Web3-based browsers like the Brave browser are absolute privacy-focused offerings. Users can interact with the web without their data being collected by the browser. Moreover, Brave’s features include ad blocks, private searches, and others to prevent websites from tracking user habits and behavior. Brave, however, does allow for the integration of first-party advertisements if the user wishes to see them. Of course, there’s an upside to this — the user gets paid in Brave’s BAT tokens for viewing the advertisements.
Needless to say, the list of web3 analogs in the application context is growing and bound to be endless. dApps can replace any regular application on the web now, not just web browsers and social networking platforms.
With this, the web3 ecosystem is getting bigger each day. It has to do with the utility people are finding in dApps which are in constant development. The web3 developer community has been making great advancements in bringing about dApp innovation. Moreover, web3 protocols are offering original use cases that weren’t possible with web2 applications. A great indication, if not obvious already, that web3 dApps will take over from their web2 counterparts.