The Web3 Stack: Web3 Primitives

As the Web3 space continues to grow, contextualising the various technologies has become an increasingly demanding task. In this series of articles, we will start with a high level overview of the various concepts and eventually arrive at the use cases which various Web3 protocols are trying to solve.

This article focuses on the various Web3 building blocks that can be mixed-and-matched to create novel Web3 specific use cases. Given the composability of Web3 primitives, the categorical distinctions are more of a guide helping to frame the various technological use cases. The articles are divided into 3 levels of increasing detail:

L1 — Overview

An overview of the different layers and how they enable Web3 functionality through building on top of each other:

• A Macro View

L2 — Concepts

The key concepts within each layer that informs business and technical decisions. This highlights the different categories of Web3 technologies:

• A Conceptual Framework

L3 — Implementations

Understanding the difference between various protocol/standard implementations and how they relate to each other. The focus will be on Web3 lego blocks and its affects on value flows:

• Transaction Settlement
• Assets
• Web3 Primitives
• Optimisers (WIP)

Metaverse

Virtual worlds where users have the freedom to form personal networks and take ownership of digital assets. Metaverse resources are owned by the user and increasingly interoperable standards enable such resources to be portable across Web3 dapps. As more real world assets are tokenised, open access to Web3 value rails discourages any arbitrary distinction between reality and virtual economies.

• Avatars: A digital identity twin that represents a user in a particular metaverse and is capable of being manipulated by said user. This usually takes the form of a digital avatar model which can be customised by the user. As the ecosystem matures, avatars can be increasingly transported across multiple multiverses.
• Virtual: Metaverse native assets which avatars are able to interact with. Ownership of such virtual assets are fully secured on-chain which enables novel virtual economic relationships to form based on the social value of each item. Examples of such items can range from a virtual fashion accessory for the avatar to more abstract things such as a Metaverse currency.
• Extended Reality: The merging of reality and digital worlds. Amongst the key concepts is the extension of real world objects and experiences into the metaverse. This increasingly immersive hybrid experience dissolves the virtual boundary between reality and the metaverse.

Gaming

Structured virtual environments with clearly defined goals and gamified play-to-earn economic incentives. The differentiating factor for Web3 games lies in the ownership and portability of in-game assets. Players are able to hold in-game assets in the form of tokens which can be used across multiple gaming platforms (or even DeFi Dapps) that utilises the same token standards. The opportunity for yield has resulted in the creation of guilds that are able to generate yield through optimising certain aspects of the play-to-earn gaming experience.

• GameFi: Abbreviation of Game-Finance whereby in-game assets, from in-game currency to fashion skins, are tokenised thereby enabling in-game assets to exist outside the specified gaming environment. This transferability enables novel cross-game use cases to emerge as well as the tradability of in-game assets outside its original platform.
• Yield Guilds: Guilds lower the barriers to entry to GameFi by enabling in-game assets to be rented out while also providing additional support (training, connections, etc.) to players. As most games require upfront capital to be able to participate fully, guilds enable capitalists to finance the gaming experience in exchange for a fee.

Cultural

Cultural assets and experiences that grant symbolic opportunities and advantages that are beyond economic means. By digitally representing cultural markers as tokens, it enables more efficient social coordination based on ownership of such markers. Value generated by cultural primitives can span across economic, social, and cultural dimensions. Provable ownership of such assets enables participation in various value flows as defined by the specific social group.

• Assets: Tokenised on-chain assets which hold significant cultural value. Due to the transferrable nature of cultural assets, economic incentives usually play a significant role in determining the relative utility of a cultural asset across various social groups.
• Experiences: Commemorative NFTs which are usually minted to a user based on their participation in a particular event. Given their experiential nature, such NFTs are imbued with significant cultural and social value as it facilitates connections based on shared experiences.

Decentralised Social

Digital identity technologies which enable users to own their own digital identities, social content, and social graphs. By decoupling data ownership and social media service provision, users are given the power to determine how their personal data is handled and shared. Such technologies provide users with the ability, right, and power to craft digital personalities specific to their social context. Decentralised social opens up the a new form of decentralised coordination based on identity.

• Social Media: Protocols which specialise in the sharing of social media across social networks. By combining social media hosting with decentralised social graphs, social media protocols are able to specify its distribution according to user consent.
• Messaging: Communication focused protocols that built on top of decentralised identity to enable direct messaging between peers on the network.
• Creator: Protocols that focus on the publishing of user created content. While content is user-owned, such protocols provide significant value add by optimising the end-to-end user experience, from creation to distribution.
• Identity: Base identity infrastructure which enables decentralised proof of identity (i.e. you are who you say you are) and the verification of peer-to-peer claims (i.e. who said what about me). Such protocols are able to create and modify user-owned identity and social graphs.

DAOs

Decentralised Autonomous Organisations (DAOs) are collectively-owned, blockchain-governed organisations working towards a shared mission. Governance rules which define organisational processes are defined in smart contract code. DAOs usually implement a smart contract that acts as a treasury and also defines spending rules based on governance votes. Currently, the majority of DAOs implement a one-token-one-vote system. DAOs have become increasingly popular as a means for communities to propose and vote for proposals which will act as decentralised directives for the core team to build towards.

Decentralised Finance

Financial services made possible through smart contracts on a public blockchain. Critically, DeFi services are defined by open participation by anyone with a wallet as users always maintain ownership over their own funds (i.e. no custody). Coordination in the DeFi ecosystem is largely based on overcollateralisation so as to minimise any liquidation and market risks.

Due to the EVM general programming capabilities as well as token standardisation, DeFi apps provide significant composability thereby resulting in many novel use cases. As this sector is particularly complex, please refer DeFi Ecosystem: Primitives and Technology Stack for a more in-depth look.

Privacy

On-chain privacy tools that enable the obfuscation of transaction details. Unlike privacy focused chains or runtime environments which natively supports private transactions, these solutions are implemented via smart contracts on the host chain. In addition to the increased economic security guarantees, this on-chain privacy design also allows such tools to be integrated with other Web3 primitives to execute private arbitrary smart contract code.

Infrastructure

Many Dapp use cases are contingent on having reliable and timely data. While Ethereum is able to efficiently handle the compute and networking requirements, the same can not be said for data storage and its retrieval. Moreover, as Dapp use cases continue to expand, many applications require access to off-chain data. By optimising data handling and storage costs, these solutions enable various use cases to be delivered in a secure and more cost effective manner.

• Data: Data related services ranging across the spectrum of the data lifecycle: sourcing of reliable off-chain data; indexing of on-chain data; smart contract data feeds.
• Storage: Solutions targeted at addressing the resource intensive memory requirements of EVM blockchains. By creatively extending on-chain storage capabilities, such solutions are able to provide a more resource efficient form of data storage while still maintaining data security and reliability.

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