In the previous blog we looked at few block chain platforms and notable projects. In this blog, we will explore web3 ecosystem with the stakeholders involved, web3 layers and the common type of web3 projects, all of which are the key components to know about for a Web3 Project Manager.
The web3 ecosystem refers to the numerous technologies, protocols, and applications that have been developed using web3 technologies and use cases. Numerous businesses and organisations are attempting to create and upgrade the technology in this quickly expanding and changing field. The web3 ecosystem's decentralized structure enables better transparency, security, making it an attractive alternative to the traditional web. (Read more on What is web3' here in this article?)
The year 2022 has not been a good one for web3 due to the bear market, crypto scams, decreased funding, and layoffs. Nevertheless, builders in the area continue their efforts, and according to market forecasts, the years 2023 and beyond look promising.
Miners are individuals or organizations that participate in the process of validating and adding transactions to a blockchain. In return for their efforts, miners are typically rewarded with a cryptocurrency or other type of reward for their work.
These are the developers who work on the core infrastructure and protocols of a blockchain or decentralized application (dApp). They are responsible for building and maintaining the technology. Include frontend, backend, design, QA, blockchain, smart contract etc engineers.
These are individuals or organizations that conduct research on cryptographic techniques and protocols related to blockchain and web3. They may work on developing new technologies or improving existing one, writing and validating white papers etc.
These are companies that are working on building and launching decentralized applications or other projects in the web3 ecosystem. These companies may be focused on a specific problem or sector, such as finance, tooling, media etc.
These are the individuals or organizations that use decentralized applications or other web3 technologies. User research is still in nascent stage and most of the users are the early adopters. Unless advances are made in user experience, mass adoption on web3 can be challenging.
Auditors are individuals or companies that review the security and functionality of decentralized applications or other web3 projects. They ensure that the technology is secure and operates as intended.
Infrastructure providers are companies that provide the necessary infrastructure and resources for decentralized applications or other web3 projects to operate. This may include hosting services, data storage, or other types of support.
DevRels (short for Developer Relations engineers) are individuals or teams that work to build and maintain relationships with developers with the larger ecosystem. They act as a bridge between the company and the developer community, helping to foster a sense of community, collaboration and product evangelism.
Web3 Stack and the Layers
Each layer of the web3 stack serves a distinct purpose within the ecosystem as a whole.
Layer 0 is the initial step of the blockchain, enabling the operation of multiple networks (such as Bitcoin, Ethereum, etc.). Layer 0 offers the blockchain's core architecture. These include activities like computing, storage, P2P networks, nodes etc
Layer 1 blockchains are a collection of solutions that enhance the underlying protocol, hence increasing the scalability of the entire system. Layer 1 consists of the consensus method, the coding language, and all the rules encoded inside the blockchain's code. Examples: Bitcoin, Ethereum, etc.
Layer 2 refers to frameworks or protocols that are created over current blockchain systems. The primary objective of these protocols is to overcome the transaction speeds and scaling solutions. Layer 2 is a new network that manages transaction authentication and congestion on layer 1. The new layer 2 network lies on top of the layer 1 network, with which it is in continual communication. Example - Various solutions from polygon technology.
Typically, Layer 3 is known as the application layer. It is a layer that hosts DApps and the corresponding protocols. Bitcoin is not suited to support Layer 3 apps, although other blockchains, such as Ethereum and Solana (SOL), do. A typical web3 user interacts with dapps at layer 3.
Web3 Projects | Common Project Initiatives
DAO Internal Projects
Various projects would be taken up within the DAO aligned to its vision and seasonal objectives. Most of the major initiatives can be considered as projects and would be requiring a team to be formed and a project manager facilitates and coordinates the efforts.
This can be considered as a typical software development or application development projects where a cross functional team (devs, QA, design etc) would be set up to develop a product. In our context it would be a decentralized application (dapp).
Web2 applications which intent to benefit from the advantages of web3 need a migration activity to be take up. If the applications are large with huge data, these will be executed as separate projects.
Building SaaS products
Web3 projects which operate on subscription fall under SaaS categories. Most of the B2B, tooling and Layer 2 solutions are offered as SaaS products with monthly/yearly pricing options.
With the growth of companies working in web3, expert services are being offered throughout the tech stack. There are companies specializing in smart contracts, testing, auditing, cloud services, documentation, etc. These engagements operate on a contracting project which is common in service-based companies.
Here is a video from Learn with Whiteboard which explain web3 stack for beginners.
Coming up in the next blog - 'How Projects and Programs are Initiated: Project Initiation Phase'.
Note 1: This blog is part of a 100 Days of Learning Series on Web3 Project Management frameworks and best practices published on Program Strategy HQ. For more details on the 100 days of blogging campaign check out Blog 0.
Note 2: Reach out to info@programstrategyhq for any queries.
Note 3: Program Strategy HQ Disclaimer for Reference.
A Developer’s Guide to the Web3 Stack. (n.d.). Www.alchemy.com. https://alchemy.com/blog/web3-stack
CoinYuppie. (2022, June 10). Essence: Layers of Blockchain and Web3 - CoinYuppie: Bitcoin, Ethereum, Metaverse, NFT, DAO, DeFi, Dogecoin, Crypto News. Coinyuppie.com. https://coinyuppie.com/essence-layers-of-blockchain-and-web3/
Potential of Web3 | McKinsey. (n.d.). Www.mckinsey.com. https://www.mckinsey.com/industries/financial-services/our-insights/web3-beyond-the-hype
Takyar, A. (2022, August 16). An overview of web3 stack | LeewayHertz. LeewayHertz - Software Development Company. https://www.leewayhertz.com/an-overview-of-web3-stack/
Web3 Technology Stack. (n.d.). Web3-Technology-Stack.readthedocs.io. Retrieved December 31, 2022, from https://web3-technology-stack.readthedocs.io/en/latest/