Let’s start by defining what a marketing referral system is. it is a way to promote products or services through real people. The participant talks about the brand’s products, attracting new customers, and gets rewarded for it.

Such systems are increasingly being implemented on blockchain and this is for a reason. First, it is much easier to manage the flow of finances on blockchain, which is why it was invented. Secondly, such systems have always lacked transparency, and on the blockchain it is impossible to deceive someone, because everyone can look at the code and find out how the system works and what functions or privileges the creator has.

The essence of this system is that the role of distributors of products is shifted to the participants of this system. The usual referral system is based on rewarding the participant for bringing friends. The marketing system allows the referred members to sell products.

Nowadays, running a simple one-level referral system is considered a very trivial and simple solution. The words marketing and referral are closely related these days and their correlation can be seen in the trend charts of the google search engine:

Red is referal. Blue — marketing system

Now a simple referral system is no longer surprising anyone, so mankind has stepped forward and began to develop this idea in different directions. You can increase the depth of the referral system, it works as follows: if you bring a friend, and the friend will bring his, the first person will come from the last percentage.

Another way to develop such systems is to build special structures. This requires ingenuity and a bit of math. And so that the structure is not static, some events are added to it to motivate participants to invite as many people as possible, and those in turn invite more people. In this way you can build a whole hierarchy.

For example, imagine you have a card like a lotto ticket and there are 6 blank slots. You invite 3 friends, and those in turn 3 more, so you fill all the slots and you get some kind of bonus. Or for example friends of your friends when you buy the same ticket part of the purchase gives from this purchase to you, and also you automatically buy a new ticket, at the expense of invested funds.

Already shaking your wallet in front of the screen and dreaming of a villa by the sea and a personal yacht, after just registering in such a system and inviting your neighbor and mother?

Don’t be in a hurry to part with your blood money. This system involves actively promoting your account and attracting a large audience to make your dreams come true. I would refer to such employment as a half-time job, because attracting new people is quite time-consuming and complex process, often requiring knowledge of psychology.

You should also realize that there are always bigger fish than you, this should not upset you, because you are a user like them, but they came into this system earlier, so they are more successful than you (This case works only with multi-level systems).

The popularity of such systems, in different countries had to different times, for example, in Russia its peak came in the 90's

Such systems should not be afraid, the main thing before you give part of your honestly earned money, study the system and make sure that it is not another Ponzi scheme.

A Ponzi scheme or pyramid scheme is a system that collects money from participants, promising multiple profits. In order for the system to work, you need a constant inflow of money, as soon as the money inflow is reduced, the system collapses (usually together with the creator), and the money disappears in an unknown direction.

In order not to become a poor man with empty pockets and debts, study the financial instrument you are going to use, find out how the system is built and how the money is distributed. If this information is not available, you should not invest in a black box.

Our case

This article is entirely inspired by the work done on a similar system. A person approached us with a proposal to develop a similar system. It is also important to realize that he already had the idea for the architecture of the marketing system, as well as the architecture and technical implementation plan.

Recursion

The depth of this system is less than two, meaning that only the referral and the referrer’s referral have a direct impact. There are also two events in the system as the user structure is filled. It is precisely these events that introduce all the interest. As a result, it may turn out that the person standing 10 people lower on the referral chain can influence you. There is also a gradation of the product by cost.

It is not difficult to guess that the main problem we faced was the “pulling” of finances from one person to another through the chain of events, which launched just one person (If you look closely you can see the butterfly effect).

So, to solve this problem, we had to introduce recursion, the depth of which sometimes reached 7–10. Through these recursions it was necessary to spend money, distributing them. Also, in the course of such recursion, the structure of the system itself changed, which also caused a lot of problems at the development stage. It is important to take into account one point that at some point, the person you brought will be lower than you on the referral system, but higher on the marketing system. This is a huge advantage of this project. That is weakened the influence of the time of your registration (a disadvantage of many similar systems) and maximized user activity. But this advantage creates a lot of problems for development. After all, in such a recursion, an event may occur that you do not expect at all and it may lead to a deadlock, as a result of which, further interaction will be impossible.

Trees

Another difficulty of this project was to build the structure of the referral and marketing system. The marketing system relies on the referral system when building, but does not copy it, but only finds the nearest active referral.

In our system, the referral system is an ordinary tree that is built during the registration process in the project. In the process of recursive chain of events, the marketing tree may refer to the referral tree more than once and such a complex and confusing structure may cause more than one problem, but all of them were solved at the testing stage.

Also another problem we solved is bypassing direct referral, due to a certain condition. This problem itself is trivial, but the effect of this overtaking process is very dangerous and can confuse the structure if not enough tests are not done on this problem.

The tree on the marketing system is a binary tree. This architectural solution was laid down in the customer’s specification. This structure is also difficult to implement, because of the fact that you need to store and process a lot of information, and setting users on such a structure based on the referral structure, the process is very confusing and unpredictable, so for this task was also written a lot of tests.

Contract capacity

Two trees and a recursive function were implemented in the contract, also very many administrative functions. As a result, we faced the problem of lack of space in the contract. The size limit of the contract is 24 KB. This problem was solved by embedding into the contract a function that calls a delegate call that accessed another contract.

Contract upgradeability

Contracts on the blockchain are not updatable per se. This means that a released version cannot be updated. If an error is detected, a new contract will have to be issued, but it will be empty and without data. But there is an option to proxy the contract, to add this option we have done a research and selected the most suitable option — UUPS. So even if a bug is found or if the customer wants to expand the functionality of the system, it will only be necessary to add an existing contract and update the version in the blockchain, and all the data will be preserved.

More than 80 tests were written to make it all work correctly. Also, to solve bugs, we wrote a whole database of scripts that interact with the blockchain, as well as raised our own blockchain for testing (As a result, it turned out to be such a labor-intensive process that this part can be put in a separate article).

Conclusion

Опыт разработки данной системы дал нашей команде понимание, в чем заключается основная сложность в построении подобных проектов, а также богатый опыт по написанию подобных систем. В рамках данного проекта мы сделали следующие выводы:

1. These projects are difficult to implement, but if you have experience in building such systems, all the complexities are known in advance, because the systems differ in logical branching and special events, but the structures and mechanism of progress from the technical side are always approximately the same.
2. Building tree-like structures is also a labor-intensive task in such systems, because placing participants along a chain of recursive events is a rather unpredictable process, but if you know the subtle points, it becomes a rather trivial task.
3. The distribution of money in the chain of events is a separate problem for which we have developed a universal solution.
4. Each project requires research on contract proxying to find the best option. This functionality is incredibly important for every project.
5. Multi-level marketing systems are a task for a separate article, but this task was solved by our team without much difficulty
6. In the process of realization there were very tight deadlines, but you should not rush with such systems, because there are so many subtle points that need to be tested and made sure that they work correctly.

We can talk about our merits for a long time, but the best way to show them is by numbers. The project is at the top of TVL — over 2.2 million dollars. The project was launched in June and has been gaining momentum ever since. At the beginning of June, a peak in the number of transactions per day was registered — 180,654 transactions per day. In total, about 3 million transactions were registered. According to the information we have collected, there are more than 300 000 active users. The information is up to date as of 16.11.2022.

In the process of working on this project we faced labor-intensive and non-trivial tasks, we had tight deadlines, but we coped and the numbers will not lie. At this stage the project is no longer under active development and all tasks have been realized in full. But the project is still being developed and supplemented with new functionality, so even after the full-fledged launch we support the technical side of this project.

Despite that Dapp — (or decentralized application) is quite a new word(since Ethereum has been launched) there are tons of useful(and not) articles about what is dapp and why we need it. To avoid copy pasting and rewriting already existing articles I am going to give you a vision of this “substance” from my point of view and discuss modern problems of “breakthrough” solutions.

Wait a minute, who are you?

Let’s begin our journey

First of all, I have to give you a small introduction in the Dapp world for sure. I think diffinitions is always something hard, that’s because I like examples. So, try to imagine simple web applications. All data and code are on servers. Therefore, you can’t be sure that your data is stored safely or if it is some kind of lottery the percentage to win mentioned by a provider is really high enough. This is where blockchain comes into play. Let’s introduce

Blockchain and smart contracts in:

1. Blockchain stores all data belonging to application. You can easily access all data via special instrument/code/scans(special sites to observe specific blockchain). You can have a question like if all data is accessible, what about my credentials. Don’t worry, all your credentials aren’t stored anywhere. There are special apps/web extensions that hold all your sensitive data and websites cannot access it and blockchain doesn’t need it(only public address).
2. Websites for this kind of applications(dapps) are only frontside logic.
3. You can simply access your funds and you don’t need to fill in your card each time and worry that this website is a scam. Nobody can withdraw your funds without your approval. You just need to click the connect button to attach your wallet to the dapp.
4. And last but not least: webapp can be affected by hackers(so,front side of dapp too), but, even without a website you can interact with dapp. Kind of a magic.

In a few words it is confidence and transparency.

Reality rift

Currently, there are many dapps, but they can be easily divided into smaller groups. There are branches like: game, financial, marketplaces, social.

DeFi

There are many applications that are targeted to the financial sector. There are investment programs, marketing systems, lotteries. They are all kinds of landing-borrowing protocols, staking, ICO(initial coin offering), IDO(initial dex offering).

Also there is DeX(decentralized exchange). So, they are very useful in case of changing money. The process of changing is simplified like never before. For now it’s like kids in kindergarten changing candy wrappers.

Uniswap — is a good example of decentralized exchange. You can simply change everything that has enough liquidity. Also, all formulas related to fee counting or anything else are accessible on uniswap website. There is an option to provide liquidity to earn some money. So, now, I willn’t give you a detailed explanation of what the liquidity pool is or how it’s counted, because I think I will(or my colleagues) do it in a related article.There are also smarter exchanges called 1inch, but it’s also not the case.

Marketplace

So, e-shops are always e-shops. But instead of buying TVs and Playstations you are buying NFTs(in almost all cases for now). Pay attention, we are not discussing simple marketplaces that accept cryptocurrency as a possible payment option.

Games

For now, there are 2 ways to create games based on web3:

1. Super casual games
2. Include NFTs into big project(Ubisoft like, but there is a big possibility to get disrespect from community)

It is so, because of transaction time. For Ethereum it is like 13–14 seconds(but also exists a polygon with 3–4 seconds). And try to imagine right now, that you are playing something like a shooter game. What part of the shooter you can implement with 3–4 seconds response time. I think it is a kind of skins looting or progress of a character or game registration, but what for? There is no reason. It can be implemented in traditional ways. So, that’s because every game in blockchain is a kind of investing mechanism with a gamified process.

Simple examples are StepN(it’s like your mom is pokemonGo and father is Usain Bolt), CryptoKitties etc.

Others

Of course there are other type of applications, but they are not really interesting(or it is a casino, or extended type of DeFi, or Contracts with 0 TVL)

Wrong steps and personal opinion

I think that web3(and dapps in particular) is at the beginning of rising. But because of different abusers and technological issues there is lack of trust. There are many ideas and features to be implemented in the nearest(and not only) future, but for today in my honest opinion we are stuck. As I mentioned before, there are many casinos, lotteries, and marketing/referral systems that spend credit of trust. Also it requires more time to develop new tools, and technologies to make breakthroughs. By this word I mean to bring the world of blockchain into ordinary life(Crypto payments in ordinary shops, soul bound NFTs to create ID like, private ledgers in companies).

Crypto world has enough resources to rapidly grow, but we should spend this resources very carefully, because one day, people will realize that, there is nothing binded crypto and real world, there are no new cool features and there are only casinos and scammers and we can lose this meaningful support.

Future blink

To dodge the mentioned problems I can list the top features(IMHO) that can assure you that this technology is the nearest future, and we should concentrate our power and do our best to bring this moment even closer.

1. Soul bound NFTs — special sort of NFTs that can be minted only once for a user. It could be like a paper about your life achievements. This information could be very useful for different category of dapps(HR, university, bank, health insurance, social responsibility, games, etc)
2. Meta Universes with neuro interfaces, where all kinds of services would be on blockchain. Yes, it is not the nearest future, but chips from Neurolink give us a little hope that we can see it in our lives.
3. Dapps with integrated ZKP. In blockchain you can be sure that there is no link to your real life, but it is also a problem, in case that if you want to buy TV for example in Market place on dapp you don’t want to bias your real address to your account in network, so with ZKP you can proof, that you have enough money to buy it without showing your balance(kind of a magic).
4. My personal idea is some sort of blockchain with a specific consensus rule, that allows to compute something very useful. So, for example you can bias a lot of miners and they would for example teach models for ML stuff.(I am not sure that this is real, but with enough passion it could be possible).
5. Change the existing bank system to decentralized banking(it is possible, but there are a lot of intersections in the interests of guys with big wallets, who don’t want to allow this).

Conclusion

IMHO, blockchain and dapps is a our feature but we should carefully do next steps to avoid rollback and ramp up credit of trust. So, stop just doing casinos and marketing/referral systems and let’s create products that will change our lives.

Conntact us:

Telegram — @yarkoch / @dmitrypodolskyfm

Mail — cmo@futuremarkt.com

The goal of this article is to discuss current situation in world-wide financial system.

Why it is so interesting for financial sector

First of all blockchain allows us exclude middleman(bank) out of financial operation. By providing a ledger that nobody administers, a blockchain could provide specific financial services — like payments or securitization — without the need for a bank.

Further, blockchain allows for the use of tools like “smart contracts,” self-executing contracts based on the blockchain, which could potentially automate manual processes from compliance and claims processing to the distribution of content from a will.

For use cases that don’t need a high degree of decentralization — but could benefit from better coordination “distributed ledger technology (DLT),” could help corporates establish better governance and standards around data sharing and collaboration.

Blockchain technology and DLT have a massive opportunity to disrupt the $7T+ banking industry by disintermediating the key services that banks provide, including:

• Payments: By establishing a decentralized ledger for payments (e.g., Bitcoin), blockchain technology could facilitate faster payments at lower fees than banks.
• Clearance and Settlement Systems: Distributed ledgers can reduce operational costs and bring us closer to real-time transactions between financial institutions.
• Fundraising: Initial Coin Offerings (ICOs) are experimenting with a new model of financing that unbundles access to capital from traditional capital-raising services and firms.
• Securities: By tokenizing traditional securities such as stocks, bonds, and alternative assets — and placing them on public blockchains — blockchain technology could create more efficient, interoperable capital markets.
• Loans and Credit: By removing the need for gatekeepers in the loan and credit industry, blockchain technology can make it more secure to borrow money and provide lower interest rates.
• Trade Finance: By replacing the cumbersome, paper-heavy bills of lading process in the trade finance industry, blockchain technology can create more transparency, security, and trust among trade parties globally.
• Customer KYC and Fraud Prevention: By storing customer information on decentralized blocks, blockchain technology can make it easier and safer to share information between financial institutions.

Banks took a notice

For now, banks are interested in blockchain. Essentially, it is because they don’t want to be on the roadside.

There are some interesting examples:

• French investment bank BNP Paribas has announced it will begin looking at how blockchain technology can be applied to its currency funds and for order processing.
• Technology-focused stock exchange Nasdaq, Inc. (NDAQ) has said it is working with blockchains to “reduce the time, costs, and points of friction across the capital markets.”
• Goldman Sachs Group Inc. (GS), while not overtly reporting that they are working on anything in-house, caused some speculation after it participated in a $50 million investment round in funding Bitcoin wallet and payments company Circle, Inc. Circle was recently acquired by Concord Acquisition Corp., a special purpose acquisition company (SPAC), in a deal valued at $4.5 billion.1
• Spain-based Banco Santander (SAN) is working internally to develop blockchain-based solutions that will reduce its costs by $20 billion a year by the end of the decade.
• Barclays (BCS) is viewing blockchain technology as “transformative” and is experimenting both internally and via partnerships with start-ups to use it as it relates to financial services.
• Swiss investment bank UBS (UBS) has gone so far as to create its own standalone blockchain lab to conduct proprietary research for the company to use.

Proof

Blockchain has all the elements needed to act as a banking alternative for people all over the world. In fact, a number of blockchain-based cryptocurrencies already exist to meet the needs of users, with Bitcoin being the most popular. These blockchain-based currencies are more secure than many other forms of digital currency, providing better protection against fraud and restricting access to the funds so that only authorized users can make transactions.

As underbanked areas begin to gain affluence simply by having access to a blockchain-based banking alternative, lending options and other financial services are likely to proliferate. It could easily open up new opportunities in areas where banks are scarce and traditional loans are hard to get due to a lack of identification.

Some financial providers are already experimenting with blockchain-based debit and credit cards. These cards give users a way to access cryptocurrency stored in digital wallets for real-world transactions in places where cryptocurrency is not traditionally accepted. Companies like Wirex offer prepaid cards loaded with cryptocurrencies that will automatically convert funds into fiat for use. A Wirex cardholder can load their card with 1 of 50 supported cryptocurrencies. It’s free to load the card, and you can transfer funds directly from your bank account to purchase crypto.

The biggest funding company is also interested in blockchain

After BlackRock, the largest asset manager in the world, announced on Aug. 11 that it will launch a private bitcoin trust for its clients, some crypto enthusiasts said the move could legitimize the digital asset in the eyes of more traditional investors.

BlackRock’s new private trust will make bitcoin available to its institutional clients, tracking bitcoin’s performance, offering direct exposure to the price of the cryptocurrency and of course, trading options

Cutting off

In the world practice there are some examples when centralized world cutted off some countries of world-wide financial system. This movement can be based on political decisions, but in the end ordinary people suffers. Iran and Russia are good examples in this case. Iran was not ready, but Russia was. Also Russia noticed that blockchain is a nice opportunity to be not under control. They started to invest in research of this field and I think, Russia can be the first country in the world with crypto payments,

A Russian university is ready to test its blockchain-based analogue to the global payment messaging network SWIFT, from which Russian banks were cut off as part of Western sanctions. The developers say their system would not allow the disconnecting of countries and banks.

Conclusion

Powerful and centralized banks is two-sided coin. It is really comfortable system where you can easily access any asset in the world and it is really safety, but you can be easily banned in this system and if you relied too much on this system that would means end of your economy.

Blockchain also two-sided coin. You can’t be banned in this system(due to anonimity), but it could be useful for terrorist or drug dealers.

Time will reveal faith of the blockchain and it;s role in banking system

Conntact us:

Telegram — @yarkoch / @dmitrypodolskyfm

Mail — cmo@futuremarkt.com

Introduction

Information in the financial world always was the most powerful feature for market participants. If you acquire some information this means that you can make a profit. Try to imagine that you can detect a moment when the Blackrock company buys some asset and you have like 30 seconds to do something(to dump a price for example), isn’t it cheating? Of course yes, it is called inside information and it is prohibited. But before diving in let me introduce some key points.

Mempool

The path of transactions after the merge has been changed. Today, when a user sends a transaction, it goes into a memory pool and “lives” there until a validator takes it into a block. In general terms, a memory pool is a repository where transactions wait for validators. Try to imagine a TV shop where you can buy something, but you have to call and buy it, but if you really want it, call faster because only one copy is left.

Schema:

But transactions can wait in the memory pool for some time. Expectation time depends on different things:

• Throughput of the network is limited
• Transaction gas limit
• Cost of transaction

Glimpse into the future

So, by this aggregator average transaction time is 12 seconds, which means, that you can observe someone’s else transaction in the memory pool for around 12 seconds.

This observation can give you information about the future state of the blockchain. You can compare it with inside information in the regular market.

I will give you a short example. Let’s imagine that there is a company that sells microchips. They are doing well, but they have a problem with the equipment in this quarter. So you can go short in this position and make a profit in the next quarter. So you got inside information and used it, it is prohibited, but very profitable.

Let’s check the blockchain example, in particular decentralized exchange. A trader can send asset x to DeX and retrieve asset y. But to do this, the pair x-y should exist and there should be enough liquidity.

But if there is open liquidity pool and you have enough assets, you can affect a price in a way that you want. If you have inside information that trader A wants to change his asset x on asset y, you can manipulate the price by providing liquidity in this pool in the opposite way. But of course you have a question, how to acquire this information? The answer is memory pool.

The schema is very simple:

Now I can introduce the “sandwich” transaction. There are 3 parts of our sandwich. The first part is our front-running transaction, the second part is the transaction of our target, the third part is our last part that grabs our assets with profit. In detail, the default strategy of front-runners is:

• Scanning mempool, until appears a transaction that satisfies our requirements(type of asset, type of DeX, asset amount, gas limit)
• Send our transaction with a higher gas limit to change liquidity proportions. Txns with a higher gas limit are more attractive for validators, so validators first grab our transaction with higher gas limit.
• Then we are sending a transaction with regular gas limit to grab our assets back et voila, there is a sandwich.

Who is in the danger zone?

Of course, there is a lower bound for this type of transaction to make a profit, because sending transactions with higher gas limits can be expensive and equal to or more than a profit. Therefore to be a target you need to send to DeX a lot of money.

But DeXs are not the only target for front-runners. Attackers can get all information inside transactions and if somebody decided to send sensitive data or data that shouldn’t be observed until some moment of time it can be a possible target.

Methods to prevent an attack

• Split transaction with big amount into transactions with a smaller amount (drawback: you will spend more gas)
• Adjusting the low slippage (drawback: transaction execution time will be higher)
• Use hidden mempools or private transactions(drawback: you need to use some services that are centralized to send hidden transactions or you should be a programmer)

So, you can observe, that there is no solution that is free and easy. But nowadays a lot of dapps that communicate with DeXs have private transactions or other tools to prevent this type of attack, but always check it before sending big transaction. Also, if it is possible, split your transaction, because if you will be a target you will loss more than gas price of multiple transactions.

Conclusion

To fully exclude this type of attack, transactions should hang in mempool less than now. I think it should be 1–2 seconds or less. I have mentioned the best practices to avoid this type of attack, but always there are some drawbacks. In my honest opinion, blockchain is still for enthusiasts that know what they are doing. There are a lot of traps and to avoid them you need constantly develop yourself.

I hope this article was useful, but I recommend you dive into this theme because attackers will always develop new ways to steal your money and the best way to defend yourself are knowledge.

Always pay attention on what you are doing and why, and double check your action before sending it. It is a simple rule that can help you to avoid bad situations.

Glossary

DeX — Decentralized exchange — a smart contract that allows you to change your assets.

Txn — transaction.

Mempool — memory pool

Conntact us:

Telegram — @yarkoch / @dmitrypodolskyfm

Mail — cmo@futuremarkt.com

What is EVM?

In other words, an Ethereum virtual machine is a processing engine and software platform that functions like a decentralized computer. From DeFi and EVM crypto apps to games and marketplaces like OpenSea, developers use the Ethereum virtual machine to create DApps based on Ethereum and its EVM-compatible programming language, Solidity.

Most important, the Ethereum virtual machine is the part of the Ethereum network responsible for the execution and deployment of smart contracts. It’s where smart contracts and millions of DApps based on Ethereum blockchain live and breathe.

Think of Ethereum’s blockchain as a P2P structure of different individual nodes. One node connects to the next, making each node responsible for the security and stability of the entire ecosystem. To do so and maintain consensus throughout the Ethereum blockchain, each node uses the EVM.

To further clarify the concept of the EVM, it helps to get back to basics by thinking about how computer programs work. All of their software is written in a programming language, such as Java or C++. However, since CPUs can’t read Java or C++, the code is compiled and translated into bytecode

Ethereum isn’t a CPU — it’s a distributed worldwide network with 100 CPUs simultaneously running the EVM. However, the EVM functions as a virtual CPU or virtual “machine” running inside of the Go Ethereum, or “Geth,” program.

Similar to other software programs, developers create DApps and write smart contracts in a programming language. Instead of Java or C++, the language for Ethereum is called Solidity. Solidity code is compiled into bytecode and distributed to every computer (node) running Geth in the network.

When a smart contract gets deployed, every node receives a copy of it, runs its bytecode and gives the code to whomever called for the deployment, resulting in “state change.” This means the blockchain’s current state has been altered, which can be done only with the consensus of every node.

Therefore, an EVM is often referred to as a “distributed state machine.” It tracks the state of the blockchain as it transforms with each transaction.

Purpose of the EVM

The Ethereum Virtual Machine (EVM) is a Turing complete programmable machine, which can execute scripts to produce arbitrary outcomes. It has been built with the purpose of being a “world computer” and has immense power.

Basic ideas behind EVM:

• stores data on blockchain and executes code in smart contracts on the Ethereum network
• run any kind of Crypto-contract that can be built on Ethereum’s blockchain by using a programming language Solidity, which is compiled into the EVM for execution.

How does EVM works?

Ethereum Virtual Machine ensures that all transactions and smart contracts made on the Ethereum blockchain are executed in correct and expected manner as desired by the smart contract code. It serves as a platform for applications to be executed on.

Virtual machines like the EVM function similarly to physical machines with CPUs, memory and storage, but they operate as nothing but code. Theoretically, anyone can run a virtual machine, giving it the flexibility and portability decentralized networks need.

The Ethereum virtual machine uses a decentralized nodal network to execute smart contracts. It’s a dynamic, sandboxed virtual stack, embedded inside each Ethereum node to execute EVM-compatible smart contract bytecode.

Smart Contracts, Nodes and P2P

Each node in Ethereum’s network must agree with the next one in order to execute the same instructions. This makes the Ethereum virtual machine Turing Complete, which means it can perform logical steps for computational function.

For each instruction the EVM implements, a cost is assigned to it, allowing the system to keep track of the execution costs. The cost of making EVM crypto transactions and executing other instructions is measured in EVM-compatible units known as gas.

By enabling an economy based on charges for executed instructions rather than executed financial transactions, like Bitcoin, Turing Completeness is achieved. This means the Ethereum virtual machine is a peer-to-peer, globally connected computer, able to create smart contracts, P2P crowdfunding events, file-sharing economies and more.

Opcodes

At the moment, there are approximately 150 different opcodes an EVM can execute. So, what exactly are opcodes — and why are they important in understanding EVMs?

The reason the Ethereum virtual machine is referred to as Turing Complete is largely because of its ability to execute machine-level instructions known as opcodes.

EVM-compatible opcodes help the EVM complete specific tasks related to EVM crypto transactions or smart contracts. However, opcodes are used for a variety of operations, ranging from arithmetic and data logging to memory and the retrieval of block information.

Each opcode is assigned one byte. This means a maximum of 256 opcodes can be used.

Smart Contracts

Within each smart contract is a defined list of operations that are to be executed when certain on- or off-chain conditions are met. These operations can range from the transfer of funds to certain addresses, to the creation of new smart contracts and the communication between existing ones. Instead of requiring a third party, anyone can send funds to a smart contract address to prompt these operations.

Ethereum took the Bitcoin concept and supercharged it by allowing developers to build smart contracts on top of their blockchain. The next step was creating an environment where smart contracts could live and interact with one another. This is where the Ethereum virtual machine comes into play.

The EVM combines the resources of not just one but thousands of CPUs connected to Ethereum’s network. In addition to verifying transactions, it translates smart contract opcode written in Solidity into bytecode, so instructions can be read and operations can be executed. For this last part, you need gas.

Gas

Gas is the fuel that drives the Ethereum virtual machine. Whether you’re transferring EVM crypto or investing in an NFT, gas is needed to pay for the execution of the operation. Gas acts as a computational fee required for executing smart contracts.

Each opcode is assigned a gas cost. The more complex the opcode, the higher the gas fee. At the moment, the starting cost of every transaction is 21,000 gas.

Gas fees are charged to compensate the validators responsible for checking to make sure the transaction information is valid, and that there are no exceptions or errors from the EVM.

Even more important, gas fees help prevent DDoS attacks and keep the network secure. Since deploying complex contracts at scale would require lengthy and expensive computations, attackers are monetarily discouraged from making any malicious attempts. The attack would simply be too expensive to run.

What happens in details

This picture is describing the whole process of a transaction. In steps:

1. Initially, we have a world state t, whereas in some blocks we have a transaction.
2. EVM processing this execution and producing world state t+1.
3. This transition changes the storage of some accounts by transaction.

EVM compatible blockchains

Interoperability between blockchains has proven to be a significant problem. As issues with Ethereum — such as high gas fees and slow transactions — persisted, developers began creating DApps and smart contracts based on other permissionless blockchains to offer faster transactions and lower gas fees. Unfortunately, many of these blockchains are severely limited and lack interoperability with other blockchains.

EVM-compatible blockchains have proven to be an easy way of solving this issue. Rather than starting from scratch and creating an environment similar to that of EVMs through the use of cross-chain bridges, developers can copy certain pieces of the Ethereum network, and create DApps that allow users to quickly and easily transfer assets between any EVM networks.

Simple examples:

• BSC
• Polygon
• Tron

Tech scoping

There is a lot of information to be discussed about the technical features of EVM. In the next articles, we will discuss opcodes in details and also tech side of EVM

Conclusion

We discussed some general aspects of EVM. Also, answered 3 big questions: what, what for and how. The purpose of this article is give you just an introduction to EVM. Next articles will be more technical, we will discuss opcodes, and how exactly EVM works inside.

Crowdfunding models

There are 5 different types of models:

• Donation-based — funding without predefined rewards or monetary feedback
• Reward-based — there are predefined rewards like early access, airdrops of prizes, or other non-monetary rewards
• Equity — donor also receives part of a company(something like an IPO in the real world)
• Debt — predefined monetary feedback with a strict deadline
• Real estate — multi-owning(for example buying an office building)

Donation-based

The idea is simple — sending money without waiting for monetary feedback. By the fact, it is a charity. You just send money because you like the idea of a project and want to see it in real life.

Reward-based

In this model, when you send money you will expect some non-monetary feedback. For example, you send money to a game project and your name with other donators will be at the end of the game. Or they can send you a photo of a team with the signatures of developers.

Equity

It is simply IPO model from real life. When you send money you will receive part of a company.

Debt

Simply, it is like a vault in a bank. You just give money and the startup uses it until some deadline. On day x they will send your money back with some percent.

Real estate

This model is hard to implement in the crypto world. For example, you want to buy a building for rent. But you can’t buy it on your own. People can send you money and together you can buy it, but your donators are expecting to receive some percent of the rent.

CrowdFunding instruments

The most difficult part is the instruments. There are a lot of them, so let’s dive into:

ICO

Initial coin offering — selling tokens of the project for a fixed price. The company creates tokens and sells them for some price. So, founders receive money and donators — tokens. With this token, you can implement different models. Essentially, this token is a measure of donations.

IEO

Initial exchange offering — same as ICO but with a pound of centralization. A launchpad team checks the whitepaper and the experience of developers and approves this team to be on the launchpad, but the launchpad foundation should have strong advert channels, auditory, and investors. For this help, they ask part of the tokens and the possibility of the exclusive right to pre-sale it

STO

Security token offering — like ICO but with official registration(the hard process of registration, also only officially registered investors can participate in the process of investing. An extremely secure way for launchpad but extremely hard due to the fact that official registration costs a lot of money and requires an army of lawyers.

IDO

Initial dex offering same as IEO but fully decentralized. You just place your token on DeX and fill this pool with liquidity. Requires some money for the initial liquidity pool.

WHO

Wallet holder offering — the idea is the usage of wallet data. Wallet owners can handle some data and easily create a database of possible investors. So, with this information, they can send targeted advert or send some drops for token owners, so, that has a lot of possibilities.

SHO

Strong holder offering — now known as a refundable Strong Holder Offering (rSHO), is a crypto fundraising mechanism. Its unique aspect is that the investors are chosen based on their activities on the blockchain network, as well as other project criteria.(Some criteria : Holding a specified competitor token for a predetermined length of time, usually at least 3–6 months/Holding at least $10,000 worth of a token for at least one year/Being an active liquidity provider on a decentralized exchange (DEX)/Possessing a predetermined transaction volume, at least $1–5 million, within the past 30 days)

IFO

Initial farm offering — there are farm events hosted by DEX. At this events they propose a list of projects and investors can buy a token to help a project(Strong DEX required). Just like DeX, but with their help.

IGO

Initial gaming offering — that type of launchpads focusing only on games on web3, nowadays games on web3 are not very popular(I mean you can’t find some AAA projects.), but there a lot farming games(By farming, I mean the type of games where you can earn money while playing)

ILO

Initial liquidity offering — link

Safety features

Launchpads invented some safety features. If investor see that he is protected, the chance, that he will donate much more. Some key features:

• Multisig contracts — all decisions made in the contract will take into account the vote of each holder of a part of this company.
• Capped contracts — If the time for investing is over and the right amount of investment is not collected, the money is sent back to the investors.
• Freezing contracts — While the investment company is going on, the money will be frozen and no one will be able to use it to finish it
• Time vault contracts — special repository contracts that automatically make payouts. For example if a company is successful, the vault will gradually transfer money to the startup.
• KYC/AML — a system of project verification to exclude scam projects.

KYC

“Know your customer” — it is kind of deanon process. Centralized way to exclude black-box and scam projects.

This process often requires this type of information:

• proof of identity
• proof of incorporation
• the business plan
• profit and loss as well as balance sheet (if a company looking for funding is already in business)
• the list of current backers and details on past funding rounds
• the proof of ownership of intellectual property
• agreements that define the working relations with employees.

Conclusion

FutureMarkt

The Solidity developer roadmap is attached at the end of this article.

Introduction

Smart contract development is becoming more and more in demand every year, but there aren’t many developers who can build decent Web3 solutions. If you want to become a developer, or at least understand the path you need to take to get into this field, brew some tea and let’s go on an incredible adventure.

💡 In this article, we’ll look at the basic concept of how a smart developer works. We’ll give you a roadmap that can get you to a basic level.

Pre-requirements

Smart-contracts are programs that “live” and execute in a blockchain. Users interacting with smart-contracts invoke their functions and pay money to have them executed. And that’s worth keeping in mind, because poorly written code can waste tens or even hundreds of thousands of dollars. That’s why we recommend having a background in development before specializing in smart-contracts, for a base language such as Python, JavaScript, C, C++ and others.

1. The basics of blockchain

A lot of people don’t like the theoretical part, but here it comes in handy and will help in the further development of smart contracts!

When we defined smart contracts, we mentioned that they “live” and execute on a blockchain, which means that a smart contract developer needs to know how the environment in which their code is executed is set up. There are many nuances to smart-contract development that you can highlight for yourself as you learn the basics of blockchain.

Basics: Blockchain | Ethereum | EVM

2. Writing a Smart Contract. First Steps

Now we can try to write our first smart contracts, but the question arises: what language to write them in? Let’s turn to the popular service DefiLama to see the TVL for each language.

According to the above statistics, we can highlight two languages:

• Solidity
• Vyper

Solidity

Definition taken from the official Solidity documentation

Solidity is a high-level object-oriented language for implementing smart-contracts. Smart-contracts are programs that control the behavior of accounts in the Ethereum state.

In the syntax of the language you can notice similarities with languages such as: C, Python, JavaScript. To learn more about which languages have influenced Solidity and how, click here.

Since Solidity is the most widely used language for writing smart-contracts, we will consider it as the main one, but Vyper can also be mentioned.

Vyper

Vyper, like Solidity, is a language for writing smart contracts for EVM networks. This language is very similar to Python, which is why it is also called pythonic. Vyper was created to compete with Solidity and to eliminate some of its drawbacks, such as heavy code to read due to: multiple inheritance, function overloads, etc. More details can be found here.

Once you have chosen a language, you need to start mastering the syntax and basics; the official documentation of these languages can help with this:

Solidity: https://docs.soliditylang.org/en/latest/

Vyper: https://docs.vyperlang.org/en/latest/

We wrote a smart contract, now what?

Once a smart contract is written, you need to test it because once you deploy it in the blockchain, you can’t change it, which means your error could stay there forever.

In this part, we will also touch on writing scripts to interact with smart-contracts already deployed on the blockchain.

To test smart contracts, we need two things:

• A development environment.
• Some libraries for testing.

You can use your favorite IDE, but we recommend VS Code since it already has many plugins you may need.

We also have to choose a development environment, at the moment we can distinguish two main ones:

Hardhat

A convenient environment for writing smart contracts, with built-in functionality for the entire development process. Many projects are using this environment.

JavaScript / TypeScript is used to write tests / scripts.

💡 The libraries you need to write tests / interact with smart contracts: Mocha / Chai / Ethers

More information can be found in the official documentation.

Foundry

A relatively new development environment, actively gaining a developer base. Often used by smart contract auditors.

Key benefits: writing tests in Solidity, built-in fuzzing plugin.

Note that you may need to integrate Hardhat into your project with Foundry for a comfortable development process (scripts / interacting with the blockchain). Based on this, we recommend you to start with Hardhat.

More information can be found in the official documentation.

What framework is used by the most popular projects:

Learn main standards.

In the field of smart contract development, there are a large number of standards that describe and help unify certain types of contracts, the first standards you will need:

• EIP-20 (Fungible tokens)
• EIP-712 (Non-fungible tokens)
• EIP-1155 (Multi-token)
• EIP-165 (Interface detection)

Don’t skip any of these standards as they are very common in the development process and knowing the intricacies will only benefit you.

Next step, explore popular projects.

You will often need to interact with other smart contracts, including exchanges, oracles, and a variety of other projects. We suggest that you learn the code of some of them beforehand to increase your learning curve and pick up different tricks:

• Uniswap V2 (Decentralized exchange)
• Uniswap V3 (Decentralized exchange)
• ChainLink (Interaction with data from web2)
• ENS (Domain Name System)
• AAVE (Lending Protocol)

Conclusion.

We’ve taken apart the basic path of a smart-contract developer, it’s time to start your journey!

Obviously, it’s impossible to cover absolutely everything in this article, but we’ve tried to give a consistent roadmap that will be suitable for almost anyone to start with.

Also, for those who read this article to the end, there is a bonus: Solidity Developer RoadMap, which is a more detailed RoadMap covering more aspects, down to specific Solidity topics.

Thanks for your attention! Feel free to rate our work!

FutureMarkt

Smart Contract is another step in the evolution of blockchain technology, which consists of moving from a financial transaction protocol to a universal tool that automatically executes conditions, minimizing the risk of errors and manipulation.

If you are not yet familiar with the concept of blockchain, I recommend reading our big article, which explains in detail about this technology.

It is worth noting that the Bitcoin protocol was the first that introduced simple smart-contracts that allowed users to make trivial conditions for the transfer of their funds. The entire logic of the script could be limited to verifying the public key or checking the correctness of the scriptSig that was passed to use this UTXO.

Since the limited programming language used by the Bitcoin protocol (BitcoinScript) did not allow the development of custom applications in the blockchain, Vitalik Buterin decided to create his own protocol — and so Ethereum came into the game. Ethereum is a L1 blockchain with smart-contracts that can process almost any logic. But it is worth noting that the term smart-contract itself was invented and introduced by Nick Szabo back in 1994.

What does the Smart Contract implement?

Let’s first think about why there are ordinary contracts in our lives? Probably mostly because of the lack of trust between the parties to the agreement. A trivial exchange can be used as an example:

• Online, I have arranged to sell my phone and expect the buyer to transfer me the agreed amount.

Or the other side of such an exchange:

• What if you’ve never met the person you’re about to send money to and are expecting to receive the item?

Normally we wouldn’t trust the other party and make a contract with him, right?

Smart contracts are an excellent solution for most situations, ensuring that any type of transaction can happen for the parties involved, whether they trust each other or not.

What is a Smart Contract?

Smart-contracts, like traditional paper contracts, are a guarantor of trust and a fact of the deal. However, there are some differences.

First of all, smart-contracts are not a stack of paper filled with legal and difficult to understand language. What usually happens is that it takes a lot of time for lawyers to review the contract on a legal level.

Smart-contracts are digital versions of traditional contracts. They are simply programs that run on a blockchain, such as Ethereum, and have one goal: to provide a deterministic and secure transaction for any participant.

This is nothing more than just strings of code written in the Solidity language, which has its origins in languages like C++, Python and JavaScript. This code is then converted into bytecode, known as a compile process, and deployed to the blockchain as bytecode. Bytecode deployed into the blockchain is called a smart contract.

Each smart-contract has its own address into the blockchain. This means that if you decide to contract with someone using a smart-contract, you will deploy it on the blockchain and it will be accessible to everyone at a specific address. You can then use that address to interact with the smart-contract. It is worth noting that smart contracts can also interact with other smart-contracts. The entire process takes place inside a blockchain, and so the use of a smart-contract is decentralized, secure, and transparent.

What are the pitfalls?

Although blockchains in combination with smart contracts are our future, in my humble opinion of course, there are subtleties as well.

Anyone can write and deploy a smart contract, hence the first aspect:

1. A smart contract can be written with a number of mistakes, which can lead to huge losses.
2. But there’s one more thing to be cautioned about: a smart contract can be written by a malicious developer to profit from ordinary users who can’t recognize the fraud. (More projects like this don’t want to show their source code.)
3. And from the first two points comes another: to protect yourself from the bad projects described above, you should at least understand Solidity and the intricacies of the execution environment at a basic level, to analyze the logic of smart contracts.

But despite these dangers, we can say that there are already a large number of professionals who are developing truly valuable products.

Why are smart contracts gaining popularity?

There are many factors in which smart contracts are superior to the traditional counterpart, making it much more preferable.

Smart contracts provide comparative simplicity, speed of execution, and real-time updates — three aspects in which traditional contracts simply become limited compared to their blockchain counterpart. In addition, they are able to eliminate the redundancy of centralization and other intermediaries that often contribute to increased risk. Blockchain technology provides transparency and security in the execution of contract logic.

The issue of decentralization and autonomy in the current realities is extremely acute, because the bank can block your account or deposit at the request of the government, it is also problematic to transfer funds to some regions of the world, for some people it is just to lose the ability to transfer money to loved ones, and for business owners in that region — it means …?

Based on these advantages over traditional contracts, some sectors are already moving their business to work through smart-contracts. Some of them already have real applications or companies working in this area, but the adoption of smart contracts is still in its infancy, so you can be at the forefront!

FutureMarkt team.

This article is a continuation of the web3 series. This part will cover authorization, metaverses, the dilemma of innovators, DAO, and the challenges of implementing web3 in business.

Authorization.

In Web 2, authorization is done with a username and password, and if someone has access to them, they can act on your behalf.

In web 3, authorization requires a private key to sign transactions sent to the blockchain on your behalf. The private key is mostly stored in special applications or extensions that are sometimes mistakenly called wallets, though they are actually a repository for the private key that can sign an array of data and send it to the blockchain, a so-called transaction.

In short, you have an app, you need to send some information, you click on the sign button and the app automatically does everything and sends it to the blockchain!

But like in web 2 you have to keep your private key from the account safe otherwise someone can get access to all your assets.

But on the plus side the private key is not stored on any servers unlike login and password in web 2, although they are stored in hashed form several times with addition of salt, but still, if you have an easy password, you are in danger because there are databases of easy passwords!

The Web3 metaverse.

The metaverse is a capacious notion, and for this reason it is interpreted in different ways. I once heard an accurate, albeit rather sarcastic, phrase that the Metaverse is all our ideas of what the Internet should look like.

Some people think of the Metaverse as a virtual reality straight out of the Matrix. Others look at it more broadly and equate the world of social media with the Metaverse. Their logic is: Because we spend so many hours on Twitter, Facebook or Instagram, we are already in this virtual reality. Not physically, but mentally. After all, we create our avatar there, photos are often modified by filters, and the whole image deviates greatly from reality.

I would look for points of contact between Metaverse and Web 3 in the possibility of having something in the virtual world. Most often in the form of NFTs. People already buy avatars that they identify with and that represent them in the virtual world. The best example is Bored Ape Yacht Club, whose owners include Eminem, Steph Curry or Logan Paul.

The Innovator’s Dilemma

It’s a huge opportunity for new businesses, and for large, established organizations, this change means they can start creating products that are closer to users’ needs. This is the biggest pain point for large companies, which at some point in their development begin to work for themselves. When users start co-creating products, there will be an opportunity to get their point across. It also means a significant reduction in marketing costs.

In the case of Web 3, surprisingly little money is spent on marketing, and that’s because if users become co-creators and co-owners of products, they are also distributors. They educate the market, they create podcasts, articles, YouTube videos.

When we do pure Web 3, in an open source model, users can also develop our products themselves, add new functionality to them. This reduces the risk of a situation where a company releases a product after a few months of work, and it disappears because no one is interested.

On the other hand, in addition to the advantages, there are also challenges. First of all, the scalability of blockchain. Currently, demand outstrips supply. Blockchain cannot keep up with the number of transactions, which makes these transactions expensive. Transferring ETH (the cheapest transaction in blockchain) to Ethereum not so long ago could cost anywhere from $6 to $30. That’s a lot. If you need to transfer a thousand dollars, paying six dollars per transaction is not such a big deal. However, if I want to get back five dollars for a coffee that a friend bought me at the store, it doesn’t make sense to pay six dollars for the transfer. But since we were able to isolate this problem, so were the developers! Now they are actively working to reduce the cost of transactions, for example in Ethereum was implemented proposal number 1559 (EIP-1559), which distributes and controls the price of transactions. Also today, the Ethereum network switched to PoS, you can read more about it here or here.

More efficient blockchains will make many more applications possible. It was the same with the Internet, by the way. When it was running on 56 KB modems that took up a phone line, there was no point in running YouTube, but in 2005, when millions of people already had a pretty good Internet connection, there was a great opportunity to do that!

It was similar to the mobile Internet. When the iPhone came out in 2007 it could do email and maps, but it was not possible to play Fortnite on mobile because mobile internet was too slow in most places. It wasn’t until the spread of LTE that creating this type of app started to make sense. I believe the same thing will happen with blockchains — if they become more efficient, new applications will appear. And with them will come new users.

The second issue is UX and security. Many people lose money because they click on the wrong thing or someone cheats them. It’s a huge challenge to create applications that are, on the one hand, open, but also protect the user from mistakes that can cost them dearly.

What business challenges can a Web 3 company face?

As far as existing companies are concerned, the biggest challenge here is the so-called innovator’s dilemma. This term describes a situation in which a company in a profitable position and seeing imminent change on the horizon faces a choice: sacrifice current profits, management bonuses and the customer base and engage in innovation, or hope that change will not touch it.

In Web 3, this dilemma is even stronger. Many people associate the technology we’re talking about with speculation, money laundering and environmental destruction. If a company wants to do this, it can expect big image problems.

And how many developers are ready to develop Web3 solutions?

As of January 2022, the report on the number of active Web3 developers says 18,000+ active developers, but with the decline of the market, that number has shrunk too. That’s a very small group.Won’t that be one of the problems limiting companies from entering Web 3.0?

This will be a huge challenge for companies. I recently saw an ad from a foreign company that paid £300,000 just to recommend a web3 developer. This shows how great the shortage of specialists in the market is. On the other hand, there are more and more services that teach people blockchain programming, and for free. So it is only a matter of time before the knowledge is transferred.

DAO.

The topic of community building in the form of DAO (decentralized autonomous organization), among other things, is very much related to Web 3.

DAO is very similar to a cooperative, where all decisions are made collectively. Imagine an organization where every employee has a say in absolutely all company decisions from work schedule assignments to global decisions.

DAO tries to solve this problem. It uses technology to make it easier for people to make decisions, strategize and execute.

Many “normal” projects eventually become DAOs, and the phenomenon even has a name: progressive decentralization. It is based on the fact that initially a Web 3 startup is a traditional limited liability company in which the founders of the project have decision-making power. Over time, they put more and more power in the hands of users. In its final form, users have about 50 percent or more of the vote in organizations. In a mature DAO, several hundred people don’t vote at the same time; they have representatives, as in politics. The difference is that if a person doesn’t keep their promises, I can take my vote away from them immediately.

The DAO is supposed to change the way it organizes itself. All of this is still in its infancy, but it’s nice to see people testing new solutions in an area of our lives where there hasn’t been serious innovation in years.

In simple words: a decentralized space where no one owes each other. Authorization is done with the help of special wallets. All information is public and verifiable. It is in its infancy and has great promise.

Conclusion

The evolution of the Internet has been a long road and will undoubtedly continue. The new Internet will provide a more personalized and individualized surfing experience, a smarter and more human-like search assistant, and other decentralized benefits that should contribute to a more egalitarian network. This will be achieved by allowing each individual user to become the owner over his or her own data and providing a richer overall experience as a result of the many improvements that will be realized once the new system is implemented.

When Web 3 becomes mainstream, as hard as it is to imagine, given how smart gadgets have already changed our behavior patterns, the Internet will become exponentially more embedded in our daily lives.

Web3.0 is rapidly gaining momentum — and the term can be confusing. You may know a few things about it, but do not fully understand the details, or you are just curious to learn more. This article is here to help you clarify what Web3.0 is and give you exposure to the field.

To understand the Web 3.0 paradigm shift and why there’s so much hype around it, it’s worth taking a look back at the Web 1.0 era, following through Web 2.0 and finally reaching Web 3.0.

Web 1.0

Web1.0 — that is the classic Internet we have known since the early 90s. Most often people associate it with box-sized monitors, modems that squealed, primitive chat rooms and news sites.

Example: Yahoo web page.

At that time, most web pages were static. That’s why web1.0 is often referred to as the Internet for reading. There was an editor behind the content, like a classic newspaper. There was no easy way to create anything of your own, such as uploading your articles to public platforms like Medium. We could, of course, create our own website and write a blog on it, but even before the advent of Wordpress, that was quite difficult. The biggest manifestations of interactivity were discussion forums and chat rooms.

An interesting fact is that the term Web 1.0 appeared only with the advent of Web 2.0. Let’s break it down after the summary.

In simple words: you can read grandmother’s recipes. There is a design that is already good, the maximum that the average user can write a comment on the forum or someone in DM.

Main features of the Web 1.0:

- The ReadOnly principle.
- Mostly static web pages.
- Primitive design.
- Text-based.
- Maximum interactivity manifested through forums and chat rooms.
- High entry threshold for content creators, because you need to have technical knowledge.

Web 2.0

Web2.0 — is associated with dynamic content, the active development of large services such as Google, Amazon and others. And also with the emergence of the opportunity to be not only a consumer, but also a content creator!

Around 2005, the era of Web 2.0 began. The catalyst for its development was the concept of AJAX, which made it possible to create more dynamic web pages. In short, the concept was that content on a web page could be updated without refreshing the entire page. That doesn’t sound very impressive, but let’s imagine Google Maps if we had to refresh the whole page every time we scrolled the map. That would be a terrible UX.

Thanks to AJAX, more complex web applications could be created. This change started a much broader trend, when users began to collaboratively create the sites they use, it started the social web. Of course, it was not without consequences.

Which ones?

Individual-authored blogs and Facebook posts took market share away from newspapers and portals like Yahoo. Videos published on YouTube pulled teenagers away from television. Wikipedia took over a large part of the market, replacing the more than 200-year-old Britannica encyclopedia.

Another consequence of the advent of Web 2.0 was that corporate giants such as Facebook, Twitter and Google began to set trends, exerting great influence on users.

The Internet has become sprinkled with authorization and the ability to create an account on almost every site. Users began to voluntarily leave their data and consent to data collection in exchange for the convenience and ability to use resources. Companies were able to make money from the data, selling it to advertising agencies, and some opened their own, which helped to fully concentrate profits in their hands.

But let’s consider the flip side, companies collect and store users’ personal information on their servers. Our reputation and finances depend on information on the centralized servers. Our wealth is measured by the numbers on the bank’s server, they can manipulate that number however they want, but what bank would just give money to their customers? We should worry about having to comply with a huge number of rules that are nowhere 100% regulated. One day you are a good citizen, and the next day, insulting one of the bank employees can reduce your balance, if not invalidate it. Not to mention the fact that all companies fall under government regulation. And if you are an opposition member or representative of an opposing party, your balance sheet and personal information is at risk.

In simple words: TikTok, Instagram, Facebook, etc. Companies collect and trade our personal information. Focus on features rather than user’s needs. Protection is only on the outside. Everything is centralized, data can be compromised internally. Closed code from third parties.

Main features of the Web 2.0:

- Read/Write/Collaborate.
- Dynamic.
- Public.
- More attention to design and user experience.
- Companies own user data.
- User registration required on most sites.

The Blockchain Revolution.

When can we talk about Web 3.0?

The origin of Web 3.0 is dated differently in different places. Some say it started in 2017, others say in 2020, and some might say about 2015, when Ethereum was launched.

Regardless of where we put the starting point, the Web 3.0 revolution is about creating a decentralized space in which we don’t have to trust anything but cryptography and code. In Web 3.0 — transactions don’t require intermediaries, the essence of the first cryptocurrency, i.e. Bitcoin, was precisely to remove the intermediary in the form of a bank in interpersonal transfers. Just as AJAX helped make the web more dynamic in the Web 2.0 era, blockchain technology helped create a global decentralized ledger that tracks ownership. In other words, it clearly and definitively tells you who has how many bitcoins, what NFTs, or what applications they used.

Again, as with Ajax, this doesn’t sound very impressive. However, if we think about it longer, we come to the conclusion that we have never before collected information in such a large and open way. Today, the information about how much money we have will be found in our bank’s database. Details about what properties we own are stored in state registries. Information related to our business is on Google servers. And public data means revolution in product design because they are open and reliable.

Why?

If we use a database of a company, like Facebook, we are on a short leash. A Facebook user saw how this can turn out; her game disappeared from platform at one point, almost leading to the company’s collapse.

Twitter also at one point restricted the ability to create apps based on their platform. It was the same with Google. In Web 3.0, on the other hand, large blockchains like Ethereum or Bitcoin are decentralized. In other words, a lot of people own them. To be more precise, information is stored on nodes, which is any computer with software installed and running, the so-called clients. And if the information is stored on a large number of devices, even if one of them will maliciously increase his balance, the other nodes simply do not accept his information, thanks to the consensus! Because of that, people are more willing to build their products on them, just as we are, because in this case we are playing by the rules, which are dictated by the majority and not by one company.

Network architectures.

Blockchain allows for so-called commitments. The most famous is bitcoin and the commitment that there will only be 21 million bitcoins. Not one more. And that commitment is secured at the code level. In theory, someone could issue their bitcoins without a blockchain and promise to limit them to 21 million, but who would believe him if even governments often change their minds and print the money, causing inflation?

These commitments, in a more complex form, gave rise to DeFi or decentralized finance. Thanks to them, applications (DApp’s) have been created on the Ethereum blockchain that allow to trade tokens, borrow money or insure objects. This is possible because the applications have to work according to the code that has been located in the blockchain. Anyone can check and analyze this code.

If the code is faulty or gives rise to doubts, then the app will have few users, mostly those who rely on marketing, and the rest will stay away from a substandard product — fearing fraud, of which, unfortunately, there are quite a few in the industry.

However, if the code is of good quality and has been verified by other users then it can already be used. We can, for example, borrow money from each other without the mediation of a bank. For example, I can lend you $20K, pledging my bitcoin with extra collateral ($22.5K at time of writing). And if I do not pay back $20K in 30 days, then my bitcoin will be automatically converted into stablecoins (token that must be equal to one dollar), and service will — also automatically — return your money. All this happens without lawyers, debt collectors and bailiffs, which makes transactions much easier. And that’s just the tip of the world’s iceberg.

The third revolution goes back to what I mentioned a bit earlier, which is the fact that most Web 3.0 applications are open source. Because both the code and the data are open, there is what is called composability. This is that you can build your application from other ready-made programs, as if you were building a building from Lego. Has anyone solved this problem yet? You copy his code into your code, and your application already has that functionality (it’s usually a little more complicated, but it’s a common mechanic). This allows for an incredible rate of innovation. I’m watching this space and learning every day, and I have no chance of keeping up with the development of even a small slice of what’s going on in Web 3.0.

When will web 3.0 come into our lives?

“Future is already here but it’s not evenly distributed yet.”

William Ford Gibson

Web 3.0 is already here and it works really well. For example, in Africa it is very popular to store money in cryptocurrency rather than in banks. People on the continent do this to protect their savings from the temptations of governments, but also because international transactions in Africa are very expensive because of the underdeveloped banking system.

In some places, we can already pay with cryptocurrencies or tokens, just like with Google Pay. With the Compound or AAVE DAPP’s, I can also lend someone money at interest, including a stranger, as if I were a bank.

Another example, of course, is NFT. During a bull market — their prices can be astounding, for example, one of the monkeys from the Bored Ape Yacht Club collection sold for $3,408,000 USD!

Apple, Google, Amazon are in a race to hire people associated with the development of smart contracts, which have apparently already entered the mainstream. When I see the influx of so many talented people into this space, I think there will be a big breakthrough in the next years!

FutureMarkt team.