A simple guide to the Web3 stack

Website 3 Is the latest rumor that has seen an increase in interest in recent months – what does it mean?

Around the block Coinbase Ventures sheds light on key trends in crypto. Written by Connor Dempsey, Angie Wang & Justin Mart.

Many definitions have been discarded, but at Coinbase we generally think of Web3 as Unreliable, unauthorized and decentralized internet Influencing blockchain technology.

The defining function of Web3 is proprietary. While the first replication of Internet Commerce (Web1) is Read only For most users, Web2 allows both users Read and write On a central platform (Twitter, Facebook, YouTube, etc.) Web3 gives users full ownership of their content, data and assets through blockchains. It empowers users Read – Write by yourself.

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With that frame in mind, what does the Web3 stack look like?

3-stack network

The Web3 stack is still beginning and disintegrating, but with years of innovation, it is starting to focus. What then is not the mutual monopoly or complete control of the land. Instead, it’s a framework for thinking about this landscape as it continues to evolve.

Let’s start from the bottom up.

Protocol layer

At the bottom of the stack we have a protocol layer. This is created by the basic blockchain architecture on which everything else is built.

Bitcoin is all their grandfather, and while it does not play a major role in Web3 today, it has pioneered the ability for anyone to take possession of a rare digital asset through the use of public and private encryption. After Bitcoin came the ranks of first-tier smart contract platforms such as Ethereum, Solana, Avalanche, Cosmos, etc. that serve as the basis for many of the Web3 applications currently in production.

Bitcoin and Ethereum each have additional protocols built on top of it. Bitcoin has networks like Lightning Network (for fast and cheap payments) and Stacks (for smart contracts), among others. To reduce its capability limits, several 2-layer scaling protocols have been developed on top of Ethereum.

With the rise of many first-tier and second-tier networks came the need to link values ​​between them. Insert bridges across chains that serve as highways, allowing users to move values ​​from one chain to another (a useful chain dashboard can be found here and here).

Infrastructure / Prehistoric Type

The infrastructure layer is above the protocol layer and is composed of interactive building blocks (what we call “primitive type”) that are highly reliable for a specific task.

This is a thick and diverse layer with projects that build everything from smart contract auditing software, data storage, communication protocols, data analysis platforms, DAO governance tools, identity solutions, financial causes and more.

Uniswap, for example, opens one asset exchange for another. Arweave allows data to be stored in a decentralized manner. ENS domain names can serve as user identities in the world of Web3. Users can not do much with each individual application. However, when combined, prefixes of these types act like lego bricks that Web3 developers can use to create an application.

Use Case Layer

At the top of the protocol and the infrastructure layer is the user case layer, which all come together.

Take blockchain-based games like Axie Infinity that use Ethereum tokens and NFTs that can be linked to a low / high cost sidechain called Ronin. Players often use Uniswap to change the ETH for the token needed to play the game. Similarly, the Mirror decentralized blogging platform uses the Arweave storage protocol to store data. At the same time, it uses Ethereum to enable publishers to receive frequent cryptocurrency payments by directing tokens to their ENS addresses.

You will notice that Uniswap appears in both our infrastructure and utilities sections. This is because while its core Uniswap is just a smart contract, it also provides a front end where users can interact directly. Put it differently, it runs simultaneously as a stand-alone application, as well as the infrastructure for other Web3 applications such as Axie Infinity.

Access layer

At the top of the stack is the Access layer – the application that serves as the access point for all kinds of Web3 activities.

Want to play Axie Infinity or get paid for your content on Glass? The first thing you will need is a wallet, which acts as a login point for most Web3 applications. Fiat onramps like Moonpay, Wyre, or exchanges like Coinbase help users trade their fiat money for crypto to get started.

With some cryptography in the wallet, users can go to applications like DappRadar to browse and connect to all kinds of Web3 applications in one place. Other projects like Rabbithole help users find and learn how to use Web3 applications. There are also aggregators like Zapper, Zerion and Debank that help users keep track of all their activities and assets across apps.

Finally, we are close to the future where Web2 platforms already gathered by the cryptonative community, such as Reddit and Twitter, serve as entry points for Web3. Reddit’s long-awaited crypto initiative will allow some communities to generate tokens, rewarding users with tokens and likely NFTs for active participation. Twitter already prides itself on integrating with Bitcoin’s Lightning network to allow users to advise others on BTC.

Unprecedented stack

The protocol, infrastructure, applications, users, and access points named above create a new world of evolving Web3: the Internet belongs to its users. Beyond the ownership of Web3 lies in its module and interoperability. This essentially means that there are endless ways in which the above stacks can be combined to create new and interesting use cases – a feature we expect to lead to the Cambrian explosion of the New World Transformation Program. .

While the frameworks and layers we have outlined are unlikely to change, we expect the projects and opportunities in them to evolve significantly in the coming years.

Web3 Read

  • Thoughtful Criticism on Web3 by Moxie Marlinspike
  • Rejection of Moxie from Vitalik Buterin
  • Do we have to perish in repeating Website History 2? By Sarah Guo
  • Web 3.0 Architecture by Preethi Kasireddy
  • Web3 Brief by Eshita
  • The Web3 World by Grace Isford
  • The Web3 Renaissance: The Golden Age for Content by Li Jin and Katie Parrott

Web3 Tweets

Pre-printing of around the block

  • DAOs: A social network that can revitalize the world.
  • Ethereum & crypto scaling for billions of users
  • Coinbase Ventures 2021-Q3 Activity and Acceptance
  • Coinbase Investment Guide to NFTs
  • Theft Project: The first community owned by the NFT gaming platform
  • Axie Infinity, Yield Guild Games and Play Economy to Make Money

This site does not display non-public information as material relating to Coinbase or Coinbase Venture portfolio companies.

Disclaimer: The opinions expressed on this site are those of a potential author of Coinbase, Inc. Or its affiliates (“Coinbase”), which do not represent the views, opinions and positions of Coinbase. The information is provided for general educational purposes only and is not intended to generate investment or other advice on financial products. Coinbase does not represent the accuracy, completeness, timeliness, appropriateness or validity of any information on this site and will not be liable for any errors, omissions or delays in this information or any loss, injury or damage. That does not happen from it. Show or use. Unless otherwise noted, all images provided herein are the property of Coinbase. This site contains links to third party websites or other content for informational purposes only. Third party websites are not under the control of Coinbase and Coinbase is not responsible for their content. The inclusion of any link does not imply endorsement, approval or endorsement by Coinbase of any website or association with its operators.


A simple introduction to the Web3 stack was first published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to it.



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