Web3 can be defined as a permissionless, trustless, and decentralized internet ecosystem that is built on blockchain technology. However, the most defining feature of Web3 is ownership.
To understand the ownership aspect of Web3, let’s roll back to Web1 or commercial internet, which was read-only for most users. Then came Web2, which allowed users to both read and write on centralized platforms such as Facebook, Twitter, YouTube, and more. Now, the next phase of the evolution of the internet is Web3, which is built upon the core concepts of openness, decentralization, and greater user utility. In short, it gives users full ownership of their data, content, and assets via blockchains, and ultimately the power to read-write-own.
While a platform such as Facebook owns your data and identity in Web2. Your identity can move fluidly among platforms in Web3. What’s more? Service providers can’t capture and monetize your data. Interesting enough?
To understand the workings of the Web3 and decentralized internet in a better way, let’s dive into our guide on the Web3 stack below.
The Web3 Stack: What Is it?
Decentralization is often looked at as a fragmented tech stack. And while it is a fact that Web3 is a nascent technology, we also can’t ignore that it has evolved rapidly and is beginning to come into focus.
This is the layer that makes everything in Web3 possible. Here you will find all the technical factors responsible for having blockchain technology available in the first place such as mining, nodes, internet network adapters, tokens, storage, virtualization, and more.
Let’s take Axie Infinity, a blockchain-based game for example. It uses NFTs and Ethereum tokens that can be bridged to a high output/low-cost sidechain named Ronin. Usually, players use Uniswap to swap ETH for tokens required to play the game.
Likewise, Mirror, a decentralized blogging platform uses the aforementioned Arweave, a storage protocol to store data. At the same time, it uses Ethereum to pay publishers in crypto, often by ENS address.
Here you’ll observe that Uniswap appears in both infrastructure and use case layer sections. The reason behind this is that Uniswap is a series of smart contracts and it also offers a frontend for users to interact with directly. To put it simply, it functions as both a standalone user-facing app and as an infrastructure for Web3 apps such as Axis Infinity.
As mentioned above, the infrastructure layer has many technical factors. When looking at them in a bit more detail, there are some few key elements to understand.
Mining as A Service
Mining is important in the crypto world. It first started with Bitcoin and now it has permeated into the Web3 blockchain stack system. Now, the decentralized internet needs this opportunity as a service. There are several companies that offer Mining as a service (MaaS) to investors who want to target this on a big scale. By this means, the companies get their revenue and the miners receive their share of the profit.
Network
The network of Web3 is decentralized and doesn’t require a central authority to maintain the system. Hence, every user gets the privacy they need. The process is the same as the blockchain network but has more scalability. Web3 will have its decentralized browsers as well.
Additionally, the blockchain applications will too be decentralized as well, but for now, it runs both centralized and decentralized apps.
Virtualization
Virtualization refers to creating a virtual resource such as a server, desktop, network storage, OS, and more. It has the ability to transform traditional computing and manage workloads more efficiently. Virtualization has been around for decades, but with Web3 it can reach its full potential.
Computing
Here computing means distributed computing. In simple terms, it means a concept where several computers connected to each other via the network, work simultaneously to solve one problem . To succeed in this aim, all computers must act as a single entity. It is a time-efficient method as a single problem gets divided into many parts and assigned across the network.
Next, a group of computers solve the problem and are connected to each other via the network. For solving the problem, all the computers have to act as a single entity.
Nodes
In decentralized internet, there are thousands upon thousands of nodes. So, what is it? It is a point of interaction of a network. In a virtual environment, each accessible device can be called a node.
It is thanks to nodes, and other new technologies, that the decentralized web was enabled. It started as a packet switching theory and now it is the foundation of the Web3 tech stack. Nodes keep track of a transaction and seamlessly make a decision. Some networks have higher authority nodes that make bigger decisions or assign tasks to other nodes.
Tokens
Tokens are basically crypto tokens that function on their respective blockchain network. It is an asset used to fund a new project and initiate the project's development. In the new decentralized internet, it is customary to include a token as a fundraising option. It can also be used to buy other cryptocurrencies—nonetheless, it's a transferrable and treble asset on the Web3.
Decentralized Storage
Now that we understand Arweave, we briefly move to decentralized storage in detail.
Indeed, blockchains offer a medium for smart contract storage/execution, decentralized state management, and transaction value. However, higher-level apps need additional components.
Blockchain storage is highly expensive and inefficient in storing frontend content such as images, GIFS, and videos - this is where decentralized storage comes in.
An Interplanetary File System (IPFS) is a distributed network made of nodes where users can store and share websites, files, data, and applications. Additionally, with the growth of NFTs, the use of IPFS has increased and it often acts as the underlying storage system for NFTs.
Network Layer
The Network layer is a protocol stack that enables nodes to find each other and exchange information. This includes one-to-one or one-to-many (gossiping) communication. Each node must stick to specific networking rules to make sure that they are sending and receiving the correct information. This network is mainly made of RLPx, Roll your Own, and Trusted Execution Environment (TEE).
RLPx
RLPx is a network and protocol suite that helps in general-purpose transportation between two peers as well as enables users to communicate within the network. This technology discovers nodes and shapes the overall network. Other than that, it encrypts transports and handshakes between two users, frames different protocols, manages the overall flow of data on the network, and enables authentic connectivity within the p2p network.
Roll Your Own
This process is used when standard protocols don’t align with your infrastructure. As the name implies, this ‘Roll Your Own’ method allows you to build your custom protocols. It is important to note that every blockchain network brings something unique to the table, and using this method ensures the flow of creativity and potential growth in Web3 architecture.
Trusted Execution Environment
TTE is one of the most important elements of Web3 because it helps in resolving the scalability issue to a great extent. Basically, it is an isolated area or server away from the main network, which ensures end-to-end security and confidentiality of the whole system.
Block Delivery Network
It is a distributed network system that provides pages or other web content upon users’ request. The content is delivered based on the server, location, and origin of the webpage. It is really helpful for websites that have high traffic. Furthermore, the block delivery network caches the requested content from a website and then presents it to the user's servers.
Protocol Layer
In this layer, you will find all technology and its application that makes foundational networks like Bitcoin and Ethereum. This blockchain architecture is the foundation on which everything else gets built.
Bitcoin is the first-ever cryptocurrency, and while it doesn’t have a major role in Web3, it paved a path for someone to own a digital asset using public-private cryptography. From here, a lot of layer 1 smart contract platforms such as Ethereum, Avalanche, Cosmos, and more came into the picture. Today, these platforms serve as the underpinning technology for many Web3 applications in production.
Both Bitcoin and Ethereum have supplementary protocols built on them. For instance, Bitcoin has the Lightening Network for faster and cheaper payments, and Stacks for smart contracts, to name a few. Ethereum, on the other hand, has multiple layer 2 scaling protocols on top of it to alleviate its capacity limitations.
With the emergence of several layer 1 and layer 2 networks, the need to bridge value between them grew, and to meet this need, cross-chain bridges came into play. Cross-chain bridges allow users to effortlessly move value from one chain to another.
When developers choose a blockchain network to build decentralized applications (dApps), they have two main options: (1) Ethereum Virtual Machine (EVM)-compatible blockchains and (2) non-EVM-compatible blockchains.
1) EVM Blockchains
Ethereum works as the main framework for web3 development. Its virtual environment stores vital information such as balances, accounts, and machine state, which can change with every new block as per the predefined rules furnished by EVM. More importantly, it provides a structure for the storage and execution of smart contracts.
EVM-compatible blockchains have the backing of years of Ethereum development and a lot of tried-and-true options for development environments such as Hardhat, Truffle, and Brownie. With Hardhat, developers can easily compile, test, deploy, and debug Ethereum software, whereas with Truffle they can compile, test, and deploy EVM code and at the same time provide frontend dApp development tools. Finally, Brownie is an alternative to Truffle and hardhat. It is a Python-based framework for EVM development.
2) Non-EVM Blockchains
Recently, developers have begun using blockchains—to build dApps—that don’t harmonize with the Ethereum framework, and therefore, they are called non-EVM-compatible.
Developers argue that EVM chains are limited by the rules of the Ethereum framework and choose to design new structures ( the non-EVM blockchains) for scalability and high transaction speed from the get-go.
Services and Optional Components
The infrastructure layer is built on top of the protocol layer and is made of interoperable building blocks that are highly dependable for performing a specific task.
This layer is dense and diverse with projects building everything such as communication protocols, smart contract auditing software, data analytics platforms, data storage, identity solutions, DAO governance, financial primitives, and more.
For instance, Uniswap allows its users to swap one asset for another. On one hand, Arweave stores data in a decentralized fashion, and on the other, ENS domain names act as a user’s identity in the Web3 world. Separately, these apps can’t do much, but when combined, these category primitives function as lego bricks that a developer can fuse and construct an app.
Web3 Infrastructure Challenges
Without proper infrastructure, accessing and interacting with blockchain data can get tricky.
Writing data directly on-chain is expensive and hence, developers leverage EVM chains’ built-in logging capability where smart contracts print information on-chain in a cost-efficient manner. Logging for cheaper storage is the most favored way to read and write on a blockchain and needs a powerful blockchain interaction layer to make sure developers can capture events without fail.
Application Layer
At the top of the Web3 stack lies the access layer, applications that act as the entry point for all manner of Web3 activities.
If you want to get paid for writing on Mirror or want to play Axis Infinity, you’ll need a wallet, which is the main point of entry for a majority of Web3 applications. Crypto exchanges such as Coinbase or Fiat onramps such as Wyre or Moonpay help users trade fiat currency for crypto to get started. After buying some crypto and storing it in a wallet, users can leverage aggregators such as DappRadar to connect with all types of Web3 applications in one place.
The Web3 Tech Stack that Never Stops Evolving
All the protocols, user applications, infrastructure, and access points mentioned in this article make the nascent, but evolving Web3, a user-owned internet. Other than ownership, the power of Web3 lies in its interoperability and modularity. Fundamentally, the above Web3 stack can be combined to make new and interesting things. While the layers and the frameworks are most likely to stay unchanged, the opportunities and projects within them are expected to evolve dramatically.
