Web 3.0: Some Possibilities
The essential difference of blockchain tokens vs traditional investments is that tokens blur the line between an asset and a software tool.
As an asset, they’re easy to understand: they either generate more of themselves, acting as something of a dividend, or they increase in price.
They can also be easy to understand as a software tool. Use your computer to do something: sign a transaction, send some tokens to a friend, place a spot on a map. The US has over 20 years of experience with PCs in the house being mainstream, and understanding basic software as a “thing” is pretty straightforward.
But software as an asset? That’s tricky.
The rapidly dropping price of ETH in the past few months, and weeks especially, has shown that the herd of investors is currently more scared of losing money than being a part of Web 3.0. Meanwhile, developers and enthusiasts are working harder than ever to create new platforms that allow for unexpected interactions that may reap huge rewards down the line.
Let’s take a minute to check out just two live projects on Ethereum’s Web 3.0:
Maker
Maker created the first decentralized stable coin, Dai, which was released in December of 2017. Dai is created by depositing Eth into a smart contract (called a CDP) to borrow against.
It’s a bit like a decentralized pawn shop, where you might deposit a $100 shotgun and be able to take out up to $66.
Maker works because the crowd is incentivized to challenge the CDPs that have borrowed too much (because the price of ETH dropped), which they are able to do through a process called “bite”. If a contract has less than 150% collateral in it (ie your ETH deposit is less than 1.5 times the amount of Dai you have outstanding), anyone with Dai can “bite” your contract and its collateral is put up for sale at a 3% discount to the current market rate.
In other words, decentralization happens through enforcers who are motivated to buy ETH at a 3% discount by monitoring contracts during falling prices.
It’s genius, and it works.
FOAM
Foam allows users to create points of interest on maps that provide a greater degree of accuracy and timeliness than standard Google maps.
The map is open now for crowdsale participants to begin staking tokens for the next 45 days, and you can take a look yourself at the points being developed. In time, Foam will grow to allow decentralized geolocation and other integrated features that are validated by staking tokens-putting skin in the game-that can be challenged by others when false or out of date information is found on the maps.
Next Steps
Maker and FOAM are but two amazing projects being built on the Ethereum blockchain that go beyond traditional concepts of what a token should be. We are in the early stages of this decentralized platform, and these may ultimately fail to grow to become household names, but the possibilities are amazing.
Just as Apple’s iPhone created a multi billion dollar market for both Apple and third party developers, Ethereum is set to create markets for the next generation of web users that will create new synergies we can’t yet imagine. Say what you want about ETH’s price; the platform, and its token developers, are going places.
What Hedge Offers
Security:
Hedge leads the industry in providing secure wallets with proprietary best in class distributed cold storage practices. The keys to your funds never touch the internet and cannot be stolen by hackers. There is no single point of failure that can jeopardize your fiduciary.
Applications:
Hedge offers application interface solutions to make your apps work with our apps. Small regional bank looking to compete? Incorporate Hedge’s APIs into your app and give your customers the ability to buy and sell bitcoin through your institution.
Access:
Hedge is the only firm in the industry that gives you 24/7 access to your funds. We net settle transactions in a proprietary process that maintains the safety of keys in cold storage, but with near real time trading.
Let Hedge manage blockchains; you manage your clients.
