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Important Web3 Concepts: Part 2

NFT, Community, NFTs, Trends and Forecasts / By Ric

We’ve entered a new wave of the web – Web3. The opportunities and possibilities are endless and venture capitalists, developers, and content creators have seen this and they’re getting in early.

However, the majority of online users are still battling to understand basic web3 concepts in the web3 metaverse.

Entering the NFT/Web 3 space? Here are important Web 3 Concepts you need to know!

In our previous piece, Important Web3 Concepts: Part 1, we covered a handful of important concepts – to recap: Blockchain, gas fees, layers, and tokens.

Now we’ll be discussing the second batch of important web3 concepts you need to know if you’re entering the Web3/NFT space.

In this article, we’ll touch on the following concepts:

Address
Alpha
Ape
DAO
Fractionalized

Address (Wallet Address)

Also known as your public key, this is an alphanumeric code that serves as the address for your blockchain wallet – similar to your bank account number.

Other users can send assets (NFTs, cryptocurrency etc.) to your wallet but only you can access them using your private key.

Your wallet address is usually linked to the likes of MetaMask, WalletConnect, or Coinbase. Web3 websites generally request you “connect wallet” in order to either enter or make use of their platform.

Alpha

This refers to valuable or “insider” information regarding the value of digital assets like cryptocurrency and NFTs. An Alpha leak usually refers to a leak from inside a project that could lead to outsized returns that are over and above the return offered by the market or benchmarks – similar to insider trading.

Ape

This refers to the act of going all in or investing heavily in a coin or NFT project. This is sometimes a reaction to hype or FOMO, or done without too much know-how of a project or asset. The origins are a bit blurry but carry no negative connotations. If you go “ape”, you generally go all in.

DAO

A DAO (Decentralised Autonomous Organisation) is an organisation based on open-source code and completely governed/run by its users and members with NO central authority.

They generally focus on a specific type of project or mission and all functions are fulfilled by guidelines or rules written on the blockchain. Smart contracts lay out the fundamental rules and the code itself can be publicly audited.

Fractionalized

Fractionalisation refers to the process of locking an NFT into a smart contract and then dividing it into smaller parts which are then also issued as their own fungible token. This lowers the price of ownership and allows artwork or other forms of digital assets to be owned by a community.

Fractionalized ownership can be applied to DAOs wanting to purchase blue-chip NFTs, a group wanting to buy a house together, or even a musician wanting to release an album to their fans and have the fans own part of the future success of the album.

Dapp

A dApp or Decentralised Application is an app built on open-source code that lives on the blockchain. These exist independent of centralised people, organisations, or groups and offer an incentive to users for maintaining them through the issuing of reward tokens.

Important Web3 Concepts: Part 1

NFT, Community, NFTs, Trends and Forecasts / By Ric

We’ve entered a new wave of the web – Web3. The opportunities and possibilities are endless and venture capitalists, developers, and content creators have seen this and they’re getting in early. However, the majority of online users are still battling to understand basic web3 concepts.

That’s where we come in – and there’s A LOT to try to digest so we’ve broken it down into two parts with 4 key concepts in each. We’d hate for you to lose interest or simply be overwhelmed. If you’re still battling to grasp what NFTs are, have a read here.

We’d hate for you to lose interest or simply be overwhelmed. If you’re still battling to grasp what NFTs are, have a read here.

Simplifying Web3 Concepts

In this article, we’ll touch on the following concepts:

• Blockchain
• Gas Fees
• Layers
• Tokens

Although we’ve already covered some of these terms in other articles, we’ll dive in deeper and explain these in more depth.

Blockchain

This is where it all begins – it’s possibly one of the most important concepts to grasp. It is essentially the backbone of the entire NFT industry. In a nutshell, one transaction is a “block” with a whole group of these forming the blockchain.

This is a whole new way of logging activity and transactions, security, and more.

Important Web3 Concepts: Part 1 - Blockchain

Blockchains have a few core features which we’ll also dive into:

Decentralised

This means that blockchains aren’t reliant on centralized, Web2 networks to stay online (like an Amazon server). They run entirely on independent nodes and hundreds of thousands of computers from around the world make this possible.

If you’re a miner and you’re one of the cogs that makes blockchain transactions run, you’ll benefit from earning a part of the transaction fee.

Public and auditable

Being publicly available and auditable you’re able to view every single transaction on the blockchain – providing full transparency.

An example of this is etherscan.io – Ethereum-based transactions can be viewed here along with the transaction value, the addresses involved, the type of contract, and the transaction ID.

Incorruptable

Security and corruption are plaguing the Web2 space and have been for decades. By incorruptible it means that once a transaction/activity has been performed it is stored as a hash on the blockchain.

If someone wants to change any aspect of the transaction, the fraudulent transaction would require more “power” than the rest of the network – which is impossible.

Gas Fees

Gas Fee is the transaction fee that users pay when a transaction is performed. These differ from blockchain to blockchain. The fees go to the “miners” that provide the computational power to make the transactions possible.

Ethereum currently has a major issue with gas fees (with Eth 2.0 apparently changing that – but no one knows when it will be launched). This proves to be a huge scalability issue for the chain and causes smaller projects to opt for Layer 2 options like Solana, with Solana’s Gas Fees being pretty close to $0.00.

Gas fees are represented as GWEI – Gigawei – and represent 0.000000001 ETH. These costs are determined by cost and speed.

Important Web3 Concepts: Part 1 - Gas Fees

Layers

The blockchain ecosystem is split between Layer 1 and Layer 2. Layer 1 refers to the blockchain itself (like Ethereum, Bitcoin, Solana, and Flow). Layer 2 on the other hand refers to a network or technology that operates on top of an existing Layer 1 in order to improve scalability and efficiency.

How it works

A part of the burden is transferred to an adjacent system or technology
This adjacent technology handles part of the network processing
After all is done the end results are sent to the main blockchain

Important Web3 Concepts: Part 1 - Layers — *Source: Bitlevex*

L2 takes a lot of pressure off the main blockchain and this means the network doesn’t become congested and it becomes more scalable. Polygon and Immutable are the leading L2 solutions for Ethereum. L2 solutions allow the small guy or project to take part in Web3 without having to pay exorbitant gas fees.

Tokens

Tokens represent tradable units on the blockchain. You may have realised already that cryptocurrencies are essentially made up of tokens. The tokens like Bitcoin and Ether are fungible – meaning 1 ETH holds the same value as another ETH – unlike NFTs.

Platforms like Thirdweb make it easier for projects to launch their own token, and decide on the quantity and distribution.

With NFTs, they are Non-Fungible, so each would hold a different value (even if they’re part of the same collection).

In the next part, we’ll discuss smart contracts, Hashes, exchanges, DAOs, and marketplaces.

The future of NFTs: Beyond Art & Gaming

NFTs, Community, Metaverse / By Ric

Apart from those that are heavily involved in Web3, there has been widespread speculation around the future of NFTs, especially how NFTs and Web3 can actually benefit or make inroads into core industries around the world.

Well, it already has and it’s not showing any signs of slowing down. From finance to communities, from real estate to events – Web3 and NFTs are here to stay and will more than likely improve our day-to-day.

As it stands, the common uses for NFTs include PFPs (profile pics), art, music, or collectibles. Web3 has become synonymous with phrases like the Metaverse. Yes, those are some of the areas in which Web3 and NFTs are currently known to operate, but there’s so much more to come.

Already companies, dev houses, startups, and VCs are chasing the next big thing – how to put their stamp on the next web. We’ll cover a few core industries that will be changed thanks to Web3/NFTs but feel free to check out our 5 NFT Trends For 2022 for some deeper insight.

The following will be changed thanks to this new tech including:

Music
Real estate
Governance
Raising capital for new ventures

Music

The music industry is already being shaken up by the sudden rise of NFTs and Web3 culture. Gone are the days when musicians lose a large chunk of their earnings to middlemen.

Gone are the days when musicians are disconnected from their fans and followers. A Music NFT is a certificate of ownership of unique audio or a musical piece that can be bought or sold that provides undeniable proof of ownership thanks to blockchain technology.

There are a number of types of music NFTs:

Full songs and albums
Digital art
Tickets
Video content

Artists will now be able to claim full ownership of their work and get closer to their fans than ever before and thanks to blockchain technology they’ll be able to sell their pieces to a wider audience.

Real Estate

You may think that there’s still a good couple of months or years before you’ll be able to buy a house through an NFT. Wrong! Earlier this year a house was sold as an NFT for around $650,000.00 (around 210 Ether) through Propy.

The process involved around 50 people that had to go through verification and show proof of funds – and come auction day there were 2 bidders that had been vetted and had the opening bid amount in a digital wallet.

The property first had to be moved to an LLC from an individual owner and once the winning bidder was determined the LLC was transferred to the new owner and funds transferred to the digital wallet.

Due to Ether taking a slight knock, the “value” of the funds that the seller received dropped by around $40,000 within 24 hours.

With the rise in use cases for NFTs and crypto, Propy aims to appeal to the tech-savvy and younger generation of home buyers that are tired of the archaic processes involved in buying property.

The longest step in the wholesale was a 5 minute KYC verification. Propy also aims to be able to offer mortgages (not straight buy-outs) through a stablecoin like USDC that’s always pegged against a strong currency like the Dollar.

Governance

We’ve all heard the term DAO recently – but what is it exactly and how will it change the governance of communities, businesses, and brands?

Decentralised Autonomous Organisations are set to change the way we function as a society and in some areas eliminate elicit behavior.

There will be no CEOs calling the shots based on a whim or no CFO cooking the books. DAOs are based on the premise that every person involved holds a vote and has a voice.

This trustless system runs on blockchain protocol fully and autonomously in accordance with rules encoded via smart contracts.

Eventually the normal 9-5, one-job-only will be replaced by people engaging with and for a few DAOs – performing pre-determined tasks from anywhere in the world.

What Is A DAO And How Do They Work? | ConsenSys

DAOs have become so popular that some NFT projects are including tokens that act as voting rights for the project’s direction.

This means that the project can’t make any big move without the approval of the community that is invested in it.

Shares in a DAO can be transferred or exchanged/sold as NFTs and some projects offer a limited number of voting tokens per wallet – as to not give too much control to a single individual.

Raising capital for new ventures

Gone are the days when you need to approach VC, Angels, investment firms, your friends and family, or even take some savings out to fund your new business venture or invest in a new product.

NFTs are becoming a great way to raise capital and build a community. And fast.

Projects from all over the world are building utility-driven NFT collections that essentially offer fractionalised ownership to the minter. This ends up being a win-win. The project gets the funding it needs to get built or carry on running, and the minter benefits as the project become successful.

The way that NFTs and Web3 are becoming more and more applicable to our everyday life is astounding and as mentioned previously, it is only going to grow in popularity as mass adoption starts to kick in.

That brings us to our closing point – education. Education is needed to facilitate this mass adoption of the next wave of the web.

Platforms like Inevitable are already offering free courses to educate the masses on how web3 works, what NFTs are, and how they can be used.

Why should your project be on Discord?

Community / By Ric

There’s no doubt that if an NFT project wants to get noticed, gain rapport with users and prospective minters and establish themselves as credible/legitimate they have to be visible on certain platforms – Discord being one of them.

Yes, there are a few that see no need in congregating on the platform for a number of reasons. Some feel there’s too much “noise”, whereas others just don’t see the need in getting on for smaller projects. There are a few benefits to including Discord in your Web3/NFT marketing strategy:

Openness and transparency
Sense of belonging/community
Engagement
Networking

Open Communications

Transparency is paramount when it comes to launching any new business venture, project, startup, etc. but even more so when the very backbone of the system is openness. Projects on Discord have allowed founders to communicate directly and openly with those that seek to be involved in the project – giving them a sense of involvement in the “bigger picture”.

Channels can be established for updates on the project, competitions, announcements, etc.

Sense of Belonging and Community

Another benefit of creating a Discord for your project is to build a community that is rallied behind your idea – brand advocates if you will. You can educate, get constructive criticism and begin building the future “customers” all in one place.

Discord also allows servers to include games and other add-ons to further the community building and engagement with “mods” being able to make sure that everyone is abiding by the rules and constantly updated on any further developments of the project.

Engagement

Community engagement has been around for years, with businesses thriving off of it on Web2 platforms like Facebook, Twitter, and Instagram to name a few. Discord is essentially no different.

Discord servers allow members, mods, founders, etc. from all around the world to engage with each other and form their own communities. At the same time if users are engaging more and more (sending messages) they are able to move up the ranks (levels) – XP is “awarded” for more engaging members.

Some NFT projects like the HAPE Beast have amassed hundreds of thousands of members (over 500k) on their Discord – now that’s a strong community. But why are so many focused on the member count? That’s simple – there’s a perception that the higher your member count, the sooner you’ll “sell-out”.

Networking

Servers are great for members to come together and discuss ideas, share recommendations and potentially network with like-minded individuals. Discord affords members the ability to DM outside of servers to carry on their own conversations which could lead to new projects, collaborations, and in some instances companies hiring members. Some servers have a channel dedicated to hiring – either for the project itself or for members that have their own projects to find talent.

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Are you launching an NFT or Web3 project soon? Discord has great resources to get familiar with the platform, and top.gg has great Discord-related bots that only improve the overall experience for members on your server.