State of Web3
2019 Survey Results
The Web3 vision entails the building of technologies that contribute towards a decentralized Web 3.0.
2019 was a big year for its ecosystem, with a few highlights being the Parity Technologies Substrate development framework and the launch of the Kusama Network.
As the technology launched, projects both new and existing leveraged the framework and built their own blockchains. The age of specialized chains dawned and was met with much enthusiasm.
Katal Chain was one of these projects. Building a standard framework for finance for the Web3 ecosystem, we wanted to create a survey that could provide some insights into where projects building in the Web3 ecosystem are and how close we are to achieving its collective vision.
Key insights of the survey:
- Majority of projects surveyed are very open to collaboration or using services provided by other chains;
- Majority of projects surveyed are keen on open sourcing their work (if not all then parts of it);
- Majority of projects surveyed will attempt to leverage funding available from ecosystem funds and grants;
- Majority of projects surveyed are not building their own wallets or exchanges but instead leverage existing ones.
Table of Contents
- Definition of Web3
- Profile of Surveyed Projects
- Kusama Network
- Polkadot Network
1. Definition of Web3
“Web3 is a meta — it is a set of technologies which taken together can help to create decentralized infrastructures.”- Gavin Wood.
The Web3 Foundation was founded in 2017 in Zug, Switzerland. Its mission according to its founding charter is to nurture and steward cutting edge technologies and applications in the field of cryptographically-powered decentralised software protocols. The term “Web 3.0” was coined by Gavin Wood and refers to a peer-to-peer web that lets you do anything the current web lets you do, but in addition to this involves no servers and no authorities to manage the flow of information.
2. Profile of Surveyed Projects
The following projects participated in the survey:
- Joystream: User-governed video platform.
- Star Mesh: Provides the Web3 ecosystem with cryptographically verifiable and distributed Earth observation data.
- Staker Space: Staker and Validator.
- Acala Network: Cross-chain stablecoin platform based on Substrate.
- Chorus One: Offers staking services on Proof-of-Stake blockchains.
- Plasm Network: Scaling DApps platform in the Polkadot ecosystem. Making core infrastructure for Web3.0. Led by Stake Technologies.
- Dothereum: The Ethereum for Polkadot. A parachain bridge network to import Ethereum state and make it available within the Polkadot network.
- Akropolis: Decentralized and autonomous community economies — lending and pensions made simple.
- KILT Protocol: Blockchain protocol that enables trust markets by integrating Data Sovereignty with Interoperability.
- Caelum Labs: Blockchain development studio focused on identity and privacy solutions. Now working on Lorena
- NGRAVE: Protect your private keys from A to Z. 100% offline.
- LinkPool: Leading provider in ChainLink node services.
- Katal Chain: Substrate-Based Blockchain for Financial Instruments.
Of all projects surveyed, a total of 76.9% were application/blockchain developers, while 23.1% were Stakers/Validators. None of the participants fell into the categories of Investors/VCs, Aggregators, or Liquidity Pools.
76.9% of the projects/companies surveyed plan on applying for funding from the Web3 Foundation in the form of a grant, 15.4% might wish to at some point, and 7.7% do not intend to.
62.9% of the projects/companies surveyed plan on applying to the Polkadot Ecosystem Fund, while 30.8% stated that they might consider applying in the future.
Collaborations among Web3 projects/companies looks promising, with a total of 84.6% of participants indicating that they would use the services of another chain for their own use cases, and 15.4% indicating that they might be interested in doing so.
Further, the future of open source looks promising as none of the projects/companies who participated indicated that they would keep their entire work closed source. In total 76.9% of participants indicated that they are open sourcing their project and 23.1% indicated that they will be keeping parts of their project closed source, while open sourcing other parts of them.
When asked about building additional tooling such as wallets or exchanges for their projects, the majority of participants indicated that they would not be building either their own decentralized exchanges or wallets.
61.5% of participants indicated that they will not be building a decentralized exchange, 15.4% indicated that they would be using an existing decentralized exchange, while 23.1% indicated that they would be building their own decentralized exchange.
69.2% of participants indicated that they would not be building a wallet, while 30.8% indicated that they would be.
Of the participants who indicated that they would be building a wallet, 23.1% indicated that their intention in doing so was to support governance for all other Substrate-based chains, 7.7% indicated that their intention was to support governance for some other Substrate-based chains, and 7.7% indicated that their intention in building a wallet was to support governance for Polkadot.
Of the participants who indicated that they would be building a wallet, 7.7% indicated that their intentions were to support staking and nominating for all other Substrate-based chains, 7.7% indicated that their intentions were to support staking and nominating for Polkadot, and 23.1% indicated that their intentions were to support staking and nominating for some other Substrate-based chains.
Of the participants who indicated that they would be building a wallet, 30.8% indicated that their intentions were to support token transfers for all other Substrate-based chains, and 7.7% indicated that their intent was to support token transfers for Polkadot.
Although the majority of projects at 69.2% seem to not have undergone audits on their technology, 30.8% indicated that they had undergone between 1–3 audits.
69.2% of projects/companies surveyed indicated that they intended to leverage the concept of Polkadot’s pooled security, 23.1% said they might, and 7.7% said that they wouldn’t. However 23.1% of participants indicated that pooled security was the component of Polkadot’s interoperability that they were the most enthusiastic about (c.f. Figure XV: Interoperability in Subsection: Interoperability for further details).
In terms of cryptographic methods applied by the projects/companies surveyed in order to safeguard their technology, 72.7% indicated that they would be using encrypted storage, 36.4% indicated that they would be using Blake2b Hashing Algorithm, 72.7% indicated that they would be using Schnorkell/Ristretto x25519 (“sr25519”), and 9.1% indicated that they would be using Vdf (c.f. Polkadot Wiki’s Cryptographic Explainer for further details on these methods).
1. Kusama Network
The main takeaway from the survey is that projects are planning to be more actively involved in the Polkadot Network than they are in its Canary-in-the-coalmine cousin, the Kusama Network. This could easily change in the future as interest in using it as a testing ground to prepare for The Polkadot Network’s launch continues to rise and it plans to become the first para-relay chain on the Polkadot Network (c.f. Parachains and Relay Chain in Polkadot Wiki for more on this).
2. Polkadot Network
61.5% of the projects/companies surveyed who are building their own Substrate-based chain plan to become a parachain, while 30.8% revealed that they might be interested in doing so. As parachain slots are limited and allocated by way of auction, there is a likelihood that the higher the interest becomes in being a parachain in Polkadot, the more parathreads we will see emerging as an offshoot of this. This is great for those projects surveyed who are interested in shared security, as parathreads will still be able to benefit from this aspect of Polkadot’s interoperability.
The highest level of interest from projects/companies surveyed was in the interchain communication aspect of interoperability. 76.9% indicated that this was the aspect they were looking forward to the most. The second-highest level of interest was in digital and peer-to-peer jurisdiction, with 38.5% being the most interested in this. The lowest level of interest was in pooled security among chains, with only 23.1% looking forward to this the most.
The Future of Web3 will bring about a greater emergence of decentralized technologies as well as interoperability in the blockchain space. This will mean a higher level of innovation and development on the whole.
Web3 and its vision provide the ecosystem with not only a framework for building the decentralized technologies of the future that will make up the next stage of the web, but also the framework for figuring out how these technologies will co-exist and interoperate with one another in order to execute on its vision.
We look forward to seeing what everyone builds together, and how each project will collaborate and leverage one another’s use cases in the future to do so.
Thank you from the Katal Chain team to all of the teams who took the time to participate in this survey, and thank you to Addison Huegel and the team at BlockGroup for their help in bringing it to fruition.