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- Web3 is replacing intermediaries software-as-a-service (SaaS) firms by capturing value at a higher level.
- Web3 is being heralded as a permissionless and open innovation employing middleware blockchain protocols, thanks to these developing technologies.
- Developers can stake the native token once for the corresponding network bandwidth for the lifespan of that stake on a middleware protocol.
Cryptocurrencies and the broader blockchain ecosystem are assisting in changing the status quo of how we live our daily lives. Web3 is being heralded as a permissionless and open innovation employing middleware blockchain protocols, thanks to these developing technologies. By doing so, they are replacing intermediaries software-as-a-service (SaaS) firms by capturing value at a higher level.
Adding value
Because of the DeFi revolution, it is no longer corporations that extract value from users, but rather developers who extract value from protocols.
With the introduction of blockchain technology, the way we go about our daily lives is changing. The blockchain facilitates this by offering a safe and trustworthy peer-to-peer (P2P) network between users, whether it’s through financial transactions, purchasing art, purchasing property, or contributing to a charity.
Now, it’s no more the issue of firms extracting value from consumers, but developers taking value from procedures
Developers can stake the native token once for the corresponding network bandwidth for the lifespan of that stake on a middleware protocol. The longer apps are staked and used on the network, the closer the cost becomes to $0. After a few months, the service is essentially free, and there are no monthly fees, as there are with SaaS.
Developers can always unstake their initial investment and sell the native tokens of the middleware protocol they acquired on the secondary market or to another developer. They may also stake the software-as-a-service node in order to earn extra protocol tokens for serving application requests.
A mutually beneficial connection
At a separate stage of the stack, each application-specific middleware protocol delivers a distinct service. The Pocket Network, for example, has the RPC layer, Graph has the indexing layer, Akash has the cloud layer, Livepeer and Arweave have the video transcoding layer, and Filecoin and Storj have the storage layer. The protocols are complementary since they are located at distinct levels of the decentralized Web3 developer stack.
ERCgraph, Proxy Poster, LiFinance Bridge Aggregator Analytics, and Balancer Chat, for example, used both Pocket and the Graph at the ETHOnline 2020/2021 hackathon. The protocols are also synergistic since they are located at different levels of the decentralized Web3 developer operations stack.
SaaS Revolution
Middleware protocols are not new. After all, Web2 is backed by middleware programs, the most important of which is HTTP. Middleware is what allows users in a computing environment to interact with one another and with programs. In the intermediate layer stack of Web3, there are a number of protocols.
The Web3 Index monitors the demand-side fees (DSF) of service protocols at various tiers of the decentralized developer stack. Pocket, for example, earns $3.9 million in DSF in 30 days thanks to an innovative deflationary payment strategy. This means that developers are compensated by dilution, while nodes are compensated through inflation.
Graph generates $6,460, Livepeer generates $50,396, Arweave generates $171,406, Helium generates $7,591, and Akash generates $4,623. This unique economic method has the potential to significantly disrupt SaaS while preserving the “perpetual fair launch” processes that individuals in cryptocurrency want when contributing to a developing community.
It also implies that developers may reap the benefits of their work without having to pay the monthly rent to intermediaries.
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Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
