Web 3.0: Message to Those Lost In the Web. Part 4

    15 Mar 2022
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    The last time you dived headlong into the World Wide Web, you probably did so without as much as thinking about it. It has become natural for us: we are always online, our smartphones stay connected to the web, as do the computers we work on, our smart TVs, etc. And soon, the immersion may grow even deeper. The world is transitioning to Web 3.0, though we are still mostly unaware of it.

    We will conclude our reflections on Web 3.0 by focusing on the financial dimension of “the new internet”. But first, we need to mention a part played by user self-organization. The entire DeFi industry stands on two pillars: cryptocurrencies and decentralized autonomous organizations (DAOs). And though the first attempts at creating DAOs, as it happens, often failed, it gave us the experience we all could learn from.

    Today, we see DAOs becoming more mature and mainstream, and the time seems to be right for DAO 2.0. This is partly due to the growing understanding among businesses worldwide that decentralization can serve as an excellent cover for them to hide from regulators. It is currently clearly reflected in the DeFi segment, where platforms provide users with loans without verifying their identity or following the FATF-prescribed procedures. The developers claim no responsibility for their applications since they are decentralized and user-controlled.

    However, there is also a downside. Under pressure from government officials, even DeFi in some countries (e.g., the United States) may become regulated and adopt KYC guidelines. Some analysts even predict that decentralized identification and on-chain KYC services will play a key role in connecting users’ real identities to DeFi wallet endpoints.

    DeFi will still be the main financial component of Web 3.0, but institutional investors will have much more power. In other words, the “old” centralized finance (CeFi) will increasingly take over the DeFi world. And although people don’t like bringing it up, in some ways, it is already happening.

    In its report, the BIS (Bank for International Settlements) even argues that the term “decentralized” for DeFi apps today is nothing more than a marketing ploy. In almost every project you can find a person or a group of people who have an oversized impact on its implementation. And even if you can determine who those people are and make them comply with all legal requirements or bring them to justice in case of obvious violations, it won’t do anything to the applications themselves, the bank’s experts stated.

    Going back to the point we started on, as Web 3.0 financial infrastructure grows and becomes more “civilized”, there is an increased need for DeFi insurance. According to London-based firm Elliptic, the total value lost to DeFi hacks in 2021 exceeded $10 billion.

    Obviously, Web 3.0 must first solve one of the main problems hindering the mass adoption of cryptocurrencies – the inability to return funds sent to other people by mistake, as an accident, or as a result of a scam.

    As you probably know, all blockchain settlements are tamperproof. Still, most people are used to always being able to call the bank to cancel or block their transaction if necessary. Not everyone is willing to accept that in the crypto world, users are the only owners of their money, content, or other digital assets, making them responsible for all operations with them. All this means that some compromise will inevitably have to be found.

    In the meantime, we watch financiers excitingly throw themselves into the new blockchain-based reality. Take, for example, the New York Stock Exchange (NYSE), which has filed a patent to create its own platform for trading non-fungible tokens (NFTs). The exchange has registered the “NYSE” abbreviation to use in cryptocurrency products and services, including “downloadable virtual goods” and NFTs.

    Michael Kondoudis, the NYSE head of marketing, had this to say about them entering the NFT arena: “Our application confirms the exchange’s plans to make its first steps into NFTs, cryptocurrencies, digital collectibles, and digital asset trading platforms. We believe that the future belongs to the Metaverse, as there is no longer any doubt that this trend will take off and claim its place in IT. We are taking a proactive stance with an eye on the future, where we can become the leading financial exchange for the Metaverse.”

    Kondoudis also confirmed that many companies outside the IT sector are now beginning to consider joining the Metaverse – something we ourselves have written about before. And since they all will eventually require a reliable platform for transactions with decentralized assets, the NYSE is rushing to be the first to occupy the emerging market.

    The Coinbase cryptocurrency exchange also wants a way in, as they seek new employees who are ready for the Web 3.0 reality. The exchange is looking to hire 2000 (!) specialists of different profiles and specialties. Their explicit task will be to develop all things Web 3.0, focusing primarily on products, engineering work, and design.

    The Coinbase press office stated that they see incredible opportunities in Web 3.0, developing which will make the exchange an industry forerunner. They also promise to introduce new products in the form of a user-generated content marketplace. Coinbase will also secure and simplify their most popular features to transfer them to Web 3.0.

    One can only guess what steps other companies are taking without spotlighting their work.

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