November 29, 2022

This article first appeared in Vagobond Magazine Issue 7 which can be purchased as a readable NFT on Opensea

Web3, web 3, Web3.

This has been the rave of the internet in the present decade and has had many people wondering what it is all about. Well, here’s a dive into Web3 and Web3 communities. 

     Web1 was the first start-up of the internet; it was simply based on read-only (see-but-not-respond) , fixed contents. Information was only passed across in no-interaction format, users could not generate/ produce contents of their own. Examples are Yahoo, websites, MySpace, LiveJournal e.t.c. 

     Evolution of the internet occurred years later with the transition of Web1 to Web2. Web2 is the more familiar version of the internet in operation today. This reiteration of the internet was accompanied with a read-write format, allowing more interaction from users. Users can consume information, interact with it and even send responses or uniquely-generated contents. Web2 was further brought into the limelight with the introduction of smart technologies such as smartphones, tablets, iPads and mobile apps. Examples of features are Facebook, Whatsapp, Instagram, YouTube e.t.c. 

    Web2 seems like the perk of the internet and almost perfect but the downside to it is Centralization. Monster companies like Amazon, Apple, Google and even traditional banks are the dominant sectors of the internet. They control general and personal information, are responsible for authorization and permission for transactions. This has led to users having no original choice of content, leak risks of personal information and most frequently, points of failures from a single source. 

     Then comes Web3. Web3 is the future of the internet built on a unique system known as the Blockchain Network which stores information and transactional databases. Blockchain network is a distributed, fixed log that aids contract recording and asset maintenance in a business network. The concept of Web3 discards the need of a centralized source for information storage, hence its decentralized system. Web3 commutes interaction in a Read-Write-Own format. Web3 gives users certifiable guarantees about communication, transactions and feedback. 

 

 Web3 Communities: DAOs

 

 It is safe to also refer to them as Decentralized Communities. With the aid of ‘internet owning’, transparent operations and decentralization, users are able to create organizations known as DAOs- the most common Web3 communities. DAOs (pronounced dahos) are Web3 communities formed by people with different technological skillsets who come together to achieve a common goal. They were first launched in April 2016 with the highest fundraising campaign of the time that generated more than $150 million. DAOs operate on smart contracts, totally autonomous, open and transparent. They are governing bodies that monitor distribution of resources allocated for a project(or product) and ensure its see-through. Members make decisions on operational upgrades, treasury distribution and votings; users come together to make proposals, suggestions and then decide on its implementation. Proposals that have enough approvals and ‘yeses’ are applied to the smart contract within the DAO. This gives room for members to decide on any protocol(s) that is more suitable for them.     

     They are totally independent of nation-states and solely rely on the Ethereum Network. DAOs are formed for different reasons which could be basically for any purpose such as revolution of financial systems, investment in upcoming businesses, product testing or even investment in Metaverse-yes, the Metaverse.Common DAOs include Aragon, PolygonDAO, BanklessDAO, ConstitutionDAO. 

How does a DAO operate?

DAOs are run by transparent smart contracts to enforce rules. Start up funds/capital is generated by swapping local currency for the DAO’s token to maximize treasury. 

     With this exchange comes voting power for each member according to the amount of token they possess. Once the treasury reaches its targets and everything is set in motion, code is transferred into production and cannot be changed without another general consensus i.e rules cannot be changed without its own member’s authority.









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