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 (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.
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.
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.
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.
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.
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.