Why engineers should care about Web3

By Lukas Kairys, Chief Technology Officer at Donut

Hey there! My name is Lukas and I am the CTO of Donut. For the last 10 years, I’ve been working as a developer at traditional companies like Ad Tech and Telecom. Then, about five years ago I stumbled upon Bitcoin and it just blew my mind that you can have the native digital currency on the internet, which is decentralised and you don’t have to trust a third party: a bank, a person, or any intermediary that could operate between you and your transactions or holdings. Later on, I found out about Ethereum, which enabled developers to build rules so that this value could be transferred. This is how my journey started in this space and I am still here enjoying the ride. It feels like everything is just getting started.

Web 1, Web2, Web3. What is it all about?

At the dawn of the Internet, we had websites, where we could only read content published by others. Later on, platforms like Facebook and Youtube enabled us to create and publish content ourselves. This shift lead to Web2, where centralized companies created a big network of people all sharing content. They monetized it to the extent that it became pretty evil, invasive and manipulative. With Web3 we are able not only to read and write content but to do two additional things:

• Transact in decentralized and digitally native way.
• Share state a decentralized way.

You might ask, so what? We already have USD or EUR and we can transfer it already, no? Also, why aren’t traditional databases enough and why do we need to share state?

Let’s unpack this!

Shared state. Currently, companies like Facebook, and Twitter own all the tweets, followers, and content created there. There is no way for anyone to export it, access it, and build on top of it. Platforms can ban you any time, monetize you, or limit your expression. With a shared state, anyone can access data, export it, analyze it, build on top of it and create open products (different client applications, tools, etc.).

Value transfer. With the help of blockchains, we can now have currencies, tokens and assets in a shared state. Once you have digital native currencies (tokens), you can build different things on top like:

• Financial applications (DeFi):
  – Trust-less peer to peer lending/borrowing (https://compound.finance)
  – Decentralized exchanges (https://uniswap.org)
  – Decentralized trading funds (https://yearn.finance/)
  – Peer to peer insurance (http://nexusmutual.io)
  – And way more…
• DAOs. By having tokens, you can now build DAOs, which maintain different protocols in a decentralized way. DAOs enable voting on further developments, maintenance and funding. (https://www.tally.xyz)
• Gaming and metaverse. Open economies on games, where gamers own digital assets, can be freely traded. This unlocks a completely new way of build games and the economies surrounding them. (https://www.sandbox.game/en/)

Why we think this is the future?

Web3 is still in the very early days. We see a lot of fear, the media emphasizing illegal use case, technologies not scaling enough and calls for regulation. Sound familiar? The same things were said back in the early days of the Internet.

However, the difference is that now we already have existing applications that process billions of dollars and facilitate different financial use cases, gaming, and DAOs. Millions of people own NFTs and stablecoins, contribute to DAOs, and build products on top of different protocols. Now the question is not if the technology will be fully realized, but when.

What should I do now as an engineer?

Dip your toes into the space and approach it with an open mind.

• Read about blockchains (Bitcoin, Ethereum, Solana)
• Learn about smart contracts and try to write a few on Ethereum in Solidity (https://hardhat.org/tutorial/)
• Learn about different DeFi protocols (like Compound, Aave, Synthetix, yEarn) and try using them.
• Join some crypto communities

This will give you a better understanding about what the future looks like.

How Donut is bringing Web3 to the masses?

If you want to access DeFi / Web3 applications now, you have to go through a pretty complicated process: create an exchange account, create a crypto wallet, transfer funds, exchange USD to stablecoins, interact with protocol, and deposit funds. It is not only complicated but the transaction fees are super high (up to $50). Donut decided to simplify this entire process so users can access these services with ease. We’re what you’d call a DeFi MulleT: We look like a simple Web2 app in the front, but there’s a Web3 party happening in our backend.

Interested? Come and join us!