OWN Insights 06: The Realization of Web3
Enjoy the latest OWN Insights, by our Head of Operations, Cedric Ding.
Welcome to the OWN Insights series, where we invite industry leaders to take us on a thought provoking journey through the Web3 space. Throughout this series, industry leaders will be sharing a space, communicating their thoughts, and helping us to better understand the new iteration of the internet. Please enjoy this article written by Cedric Ding, Head of Operations at Ontology.
The end of Web2 and Web3
Since the birth of the concept of Web3 (Web3 in this article generally refers to a network form that confirms and empowers everyone’s data and assets through decentralized technology), some people regard it as the terminator of Web2. It’s as if Web2 is the wicked dragon and Web3 is the knight to save them. In their eyes, Web3 will eventually replace Web2. But in my opinion, this cannot and will not happen. Kevin Kelly has put forward a point of view called “candle economy”, that is, as long as it exists, it will not disappear with a high probability. Just like today, when electric lights are so popular, the production of candles is the highest in human history. In my opinion, the final outcome of Web3 and Web2 is coexistence, and the proportion of both is not small. They will probably exist in a state where there is a bit of them in each other, and Web3 may account for 20%, 50% or 80% of them. The process must be a two-way journey between Web2 and Web3. Web3 will be a tool that some people use when dealing with some things and some relationships.
Why do I have such an opinion? In a big way, all countries are a kind of centralized existence. The country grants people various rights through laws. When people encounter problems, they still need to be solved by the administrative departments and means of the government. Even blockchain-related issues, such as the recent bankruptcy of Three Arrows Capital, end up in legal action. I believe countries will use blockchain technology for efficiency, but I can’t imagine pure Web3 anarchy. Secondly, how many people are willing to suffer the inconvenience brought by Web3? A simple example is, how many people have the ability to keep the private keys of their wallets for a long time? In the world of Web2, you can retrieve your account in various ways, but in Web3, it is all up to you.
After we have the finale, we will explore how to implement Web3. I will discuss the organizational form, product form, and technology development.
Evolution of DAOs
Decentralized Autonomous Organizations (DAOs) are an emerging form of organization under Web3, but autonomous organizations are not. As social animals, human beings have established autonomous organizations from the very beginning, dividing labor for gathering, hunting, and distribution. In modern times, with the increase in human needs, such autonomous organizations have become richer and more subdivided. The establishment of autonomous organizations is bottom-up, and a group of people establishes organizations and divides labor for a common goal. The DAO adds the attributes of anonymity and transparency on the basis of the original autonomous organization and influences the decision-making and strategy of the project through voting on governance tokens. Finally, token holders can directly enjoy the benefits of the project. This sounds similar to a joint-stock company today, the only benefit is that the return of the token is guaranteed by the blockchain and contract, not bound by contract or corporate law.
One problem with DAOs is the efficiency of decision-making. The decision-making of DAO often requires full discussion and voting in the project community. This can be fatal for a start-up project. A core team may only need a 2-hour meeting to confirm something. In the DAO, it may take days or even weeks of discussions and votes to decide, during which the Team members are also required to expend effort into discussions and explanations. To make things even more troubling, many token holders are short-sighted, wanting to quickly benefit from the project and turn away. Another situation is that the project party itself is the largest holder of tokens, so the entire DAO will be a mere formality. In any case, such a DAO would do more harm than good for the project. In the practice of DAO, a good case may be MakerDAO. In the early stage of the project, the team decisively turned DAO into a centralized decision-making model to speed up the decision-making process to cope with the rapidly changing world. Once the project is more mature, the project will be divided into modules. It is gradually transformed into the form of DAO, and is managed by the community to meet the demands of most people. DAO should serve the project itself, and whether to adopt DAO should be judged by whether it can achieve the project goals more efficiently, and a more appropriate organizational form can be adopted at different stages of the project.
Product innovation and iteration
We all know that the issuance and circulation of project tokens is not equal to Web3, nor is blockchain technology equal to Web3. What can really realize Web3 is products and applications, and what can really make Web3 widely used is easy-to-use products. With the exception of fundamentalist Web3 geeks, the vast majority of user groups don’t use a product just because it’s labeled Web3. It must be a product that solves the user’s problem and has a better user experience than Web2 to attract a large number of users.
Coming to what problem Web3 can solve, unfortunately, most of the popular applications are currently only used to help users make money. It is true that products in financial scenarios are also the most widely used solutions at present. Whether it is payment transfer, exchange, loan or liquidity mining without any third-party approval, it greatly improves the efficiency of user assets. Although ironically, when you exchange fiat currency in OTC, you still hope that a third party will help you supervise your transaction partner to ensure the integrity of the transaction. Web3 can also solve the problems of trust, right confirmation, certification and reputation. Using the immutability and traceability of information on the chain, Web3’s products are an excellent solution to the above problems. One of the problems is how to ensure the authenticity of off-chain information when it is on-chain, otherwise credibility can only stay in the narrowest sense of on-chain information. More use of trusted data sources, optimized mechanisms and algorithms can solve this problem to a certain extent, and cooperation with Web2 data owners will also be involved in this process. My suggestion is that if there is an opportunity, cooperate first to form a product, and constantly solve user problems and iterate quickly in the process of cooperation. Increasing the degree of decentralization is only a way to better solve user problems, not an end.
We have a similar problem when it comes to making Web3 provide a better user experience than Web2, especially with games and social products. After being hot for a while, blockchain games and social products are thinking about what a real product should look like? Are Web3’s gaming and social products really meeting the needs of users before stimulating their use through token economics? The user experience is the same in the world of Web2 and Web3, because users are all human, and human nature is behind all interactions. Web2’s products have matured after 20 to 30 years of development, and Web3’s products should reduce the user’s learning cost as much as possible in the front-end experience and conform to the user’s operating habits. Of course, because of the combination of blockchain technology, Web3 products are extremely challenging in optimizing product experience. Another feasible path is for Web2-based products to move closer to Web3. For example, more and more Web2 products now support the use of wallet connections, and give more rights and interests according to the NFT held by the address. This is positive for Web3. For the Web3 project, this not only has an idea of making products, but it also brings more competitors.
Technology and infrastructure support
In addition to the lack of “genius” inspiration, the lack of excellent products is also due to the fact that current technology cannot support such products. Blockchain technology is recognized as one of the important and necessary technologies to realize Web3. As the infrastructure and carrier of blockchain solutions, the public chain has always been one of the focuses of development, and the most widely used one is Ethereum. However, Ethereum has also faced a series of problems such as low throughput and high handling fees for a long time; the PoS upgrade has been repeatedly delayed, and the sharding is far away; the contract that has just passed the separation of ownership and usage rights has not yet been practically applied, etc…
Of course, in addition to the Ethereum chain, other public chains are constantly innovating and iterating, and new public chains are emerging one after another. Side chains, Layer 2, non-EVM, Meta systems, etc. have their own characteristics, so that projects need to choose a public chain. In choosing public chains, there are repeated tradeoffs. Among the many public chains, Ontology provides a complete set of infrastructure OWN (Ontology Web3 Network) to help projects realize the road to Web3 more quickly. The bottom layer of Ontology Chain is a public chain with high throughput (5000 transactions per second) and high compatibility (supporting 4 types of contracts). It is a platform suitable for various projects and developers. In addition, on the protocol layer, Ontology has a lot of protocols that are closely related to Web3, such as DID (ONT ID), data collaboration (POD), reputation (Orange), and trusted credentials, which have been implemented and can be directly used by developers. At the product layer, Ontology also provides a wealth of tools such as ONT Login, ONT TAG, Mercury, browsers, and various APIs/SDKs to help applications land. More importantly, Ontology has been committed to building a trust and collaboration infrastructure since its inception, and its accumulated rich experience can help Ontology go further on this road. It is believed that if developers and project parties use the entire OWN infrastructure to develop projects, they will achieve twice the result with half the effort on the road to realize Web3.
In addition to blockchain technology, the realization of Web3 also relies on technological breakthroughs in privacy computing, 5G networks, zero-knowledge proofs, artificial intelligence, and other fields. Only when these technologies meet the needs of Web3, the corresponding applications will really explode.
The realization of Web3 is a long road, and we hope we can work together to usher in this day.
OWN (Ontology Web3 Network) Infrastructure is a series of blockchain protocols and products that provides the much needed tools to create an interconnected, interoperable global blockchain ecosystem. The infrastructure is bringing trust, privacy, and security to Web3 applications through decentralized identity and data solutions.
Aimed at allowing Web3 developers to quickly build Web3 applications, saving them from creating basic functions from scratch, OWN includes the Ontology blockchain, ONT ID framework and more. Individuals can also seamlessly and quickly access Web3 through products such as ONTO Wallet.
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