Web3 has lit the sparks to ignite the decentralization of the internet. E-commerce and social networks have already placed their brands on this network. Data and digital asset transmission on web3 depend on the underlying support of blockchain, which is also the web3 protocol. Various platforms and services are built on blockchains, and a lot has to be considered while submitting your back end to a blockchain.
We have compiled a list of 5 blockchains and their features to help you make a sound decision on what your web3 platform should be based on.
A network protocol is an agreed-upon set of rules that determine how data is transmitted between different devices in the same network. That is to say, it allows the connected devices to talk to each other irrespective of the differences in their internal processes, structure, or design.
Since Web3 is based on blockchain technology, a web3 protocol essentially refers to the underlying blockchain protocols on which web3 apps and services operate. The protocols define the interface of the network, interaction between computers, incentives, etc. Blockchain protocols aim to address these four principles:
Blockchain, or Web3 protocols, are decentralized, permissionless, and trustless. Yet, not all protocols are the same. Web3 protocols can be differentiated concerning the following properties.
Permissioned vs. Permissionless protocols: Permissioned protocols often require apps/services built on them to be whitelisted and receive permission to use the protocol. On the other hand, permissionless protocols are open for everyone to build upon.
Token-less vs. Token-based: Token-less protocols don’t have specific tokens, whereas token-based protocols use different types of tokens to reward users. For instance, protocols that operate on their blockchain are typically based on the PoS architecture, which implies validator nodes and currency staking. This staking is crucial to secure the network and can be done with existing currencies or through currencies specific to the protocol. Other ways to use tokens within a protocol are in the form of governance and utility tokens distributed to incentivize adoption.
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Fee-less vs. Fee-based: Some protocols don’t charge any fee and are operated by an entity without gas fees. Protocols that are fee-based charge a gas fee to be paid to the validators of the blockchain.
It is important to note that all these properties evolve during the lifetime of a protocol. A protocol can start as permissioned, token-less, and fee-less and become self-sustainable to release tokens at a later stage.
For a Web3 project to be truly successful, it must be built on top of the right blockchain network. Here is a list of the top 5 blockchain protocols that are seemingly ideal for different web3 projects.
An open-source blockchain protocol with smart contract support, Ethereum is secure and decentralized by design and is intensely evolving with thousands of live projects in gaming, NFTs, and DeFi. It works on the proof-of-work consensus mechanism and supports many programming languages, including Python, Rust, Ruby, Java, Javascript, .NET, Go, and Dart.
It also provides many software development kits, such as PHP SDK, Python SDK, Unity SDK, etc., that developers can use to develop projects. At the time of writing, there are close to 6200 public nodes registered on Ethereum’s network with respective write and read speeds of 1ms and 59ms.
The protocol also has a grant program under which developers can receive $1.3 billion for different development projects. It offers numerous add-ons such as security auditing tools, VSCode, and IntelliJ. And its facilitation of oracle integration makes it easier for developers to build robust and dynamic apps.
Solana is an open-source, public blockchain with smart contract support, famous for its ability to host highly scalable dApps. It uses a mix of proof-of-stake and proof-of-history consensus mechanisms and supports Rust, Solidity, Python, C, C++, and JavaScript.
Its offering of foundation tools for developers ranges from software development kits such as JavaScript SDK, PHP SDK, Android SDK, Dotnet SDK, etc., to other essential development tools.
The protocol has the required documentation for node setup, validator nodes, and APIs. So far, it has paid $314 million to its developers under its grant programs. It has a total of 1969 nodes with a 1ms write speed and 958.2ms read speed. It has add-ons such as VSCode, security auditing tools, and IntelliJ, and its third-party services include oracle integration, managed APIs, and cloud-based infrastructure and storage.
A smart-contract-compatible blockchain. NEAR has a community-governed, sharded blockchain platform that solves legacy blockchains’ scalability and interoperability issues. It has been designed to support the development of highly secure and scalable decentralized apps.
NEAR uses the proof-of-stake consensus mechanism for validating transactions. Users must stake a certain number of NEAR tokens into a smart contract to provide proof of stake. These are considered collateral and are destroyed if nodes behave suspiciously or do not perform their roles diligently.
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The protocol supports languages such as Rust and AssemblyScript. Also, it offers the respective software development kits and other essential tools such as developer IDE, node explorer, network stats, testnet, smart contract, faucets, and wallets.
It is a high-performance protocol with 732 nodes and a write speed of 1 ms. NEAR’s third-party services include managed APIs and node setup.
An open-source, public network, Hedera’s core services include solidity-based smart contracts and tokens and are best suited for developing and deploying decentralized apps. The protocol is secure, fast, and energy-efficient. It separates consensus from governance and thus aims to solve existing decentralization issues.
Hedera is a blockchain protocol well known for its great read speed, write speed, and uptime. It supports Java and Javascript and offers SDKs such as .NET, Javascript, Java, and Go, along with other tools such as wallets, network stats, and smart contracts.
The protocol documents node setup, APIs, skeleton code, and validator nodes. Its third-party services include managing APIs, oracle integration, and cloud services.
An open-source blockchain protocol, Polkadot uses its unique sharded architecture to allow interconnectivity and interoperability among blockchains. It brings different blockchains together to create a single unified network.
The protocol supports Rust and Javascript, offers Python SDK and Javascript SDK, and has tools such as smart contracts, network states, node explorer, faucet, testnet, and developer IDE.
Polkadot manages 297297 nodes with a read speed of 2.33ms and a write speed of 4066ms. Under its grant program, the platform has granted its developers close to $293 million. Its add-ons include security auditing tools, VSCode, and IntelliJ. It offers managed APIs, oracle integration, and cloud services as a third-party service.
Web3 provides an incomparable ease of building look-alike projects, which makes it hard to decide which protocols will become more valuable in the long term. It helps to remember that it is not necessarily a protocol’s popularity that increases its long-term value but the combination of its popularity and defensibility. The latter can present itself in different forms—the most desirable of which seems to be the one that cannot be easily forked. The word ‘fork’ here means a change in the protocol.
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A few examples of types of defensibility are discussed below.
Protocol Collateral/Liquidity Capital: Refers to on-chain assets contributing to efficient market operation. A good example is Aave. While the platform’s front-end and smart contract functionality can be forked easily, its collateral and liquidity are harder to replicate. The borrower’s collateral forms one side of the marketplace, while the liquidity from the supply side forms the other. Both are unforkable, and when paired together, they create a defensible utility for the user.
Asset Acceptance: An asset can have unforkable utility if it is generally accepted as a payment method at its face value. USDC and USDT are two examples of such assets. Their distribution and acceptance have been scaled to a point where most people accept the asset without questioning its value. That is to say, in the case of an asset, a defensible utility can be found in the way other parties, applications, and ecosystems accept it.
Asset Liquidity: An asset liquid in more apps and ecosystems becomes more useful. Let’s take the Wormhole Solana-Ethereum bridge as an example. When a user brings an Ethereum ERC-20 token to Solana through Wormhole, they receive a Wormhole-wrapped ether (wwWETH), a Solana-native asset representing ETH on Solana. A key factor determining the utility of this token is whether or not it has liquidity. If there is, a user is limited in how they can use it. It means that for an asset, a defensible utility can lie in the depth of its liquidity and the number of locations where the said liquidity can be found.
Blockchain protocols are being tailored to meet the growing tech’s diverse needs. One important step in finding the best blockchain for your web3 protocol is assessing the developer-friendliness of the same. The more utility and value a protocol can offer the developers, the more flexible it will be for your particular need. Many developers prefer the top protocols listed above. However, they are bound to change with time and changing tech needs. You can always customize an existing protocol to fit your needs best.
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