The Web3 Stack | A Complete Guide

There are a lot of different definitions surrounding Web3, which fundamentally represents a set of technologies that is making the web more interactive. From a crypto perspective, Web3 represents a trustless, permissionless, decentralized internet that leverages distributed ledger technology. The outstanding feature of Web3 is ownership. While the first iteration of the commercial internet (Web1) was read-only for most users, the advent of Web2 allowed users to read and write on centralized platforms such as Facebook, Twitter, YouTube, etc. Right now, Web3 gives users full ownership over their content, data, and assets. Simply put, it empowers users to read, write and own their creations.

While third parties like Facebook get to own your identity and data in Web2, your identity in Web3 moves fluidly between platforms without your data being captured and monetized by service providers. Given that Web2 apps are centrally controlled, tokens in Web3 grant users the right to help govern the services they use, representing a form of ownership in the platforms themselves. With this in mind, what does the Web3 stack look like?

The Web3 Stack

These are the early days of Web3, and for this reason, it is still much fragmented, albeit with much innovation over the past few years. This is not a completely exhaustive outline of what Web3 is supposed to be; instead, it is a framework to refine this landscape as it continues to evolve. Let us cover the four main layers, starting from the bottom up.

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The Web3 Stack | A Complete Guide

Protocol Layer

This is the bottom layer made up of the underlying blockchain architecture on top of which everything else gets built. Bitcoin paved the way, and even though it does not play a major role in Web3 today, the protocol made it possible for anyone to own a scarce digital asset through the use of public-private key cryptography.

After Bitcoin came several layer 1 smart contract platforms such as Ethereum, Solana, Avalanche, Cosmos, etc., that serve as the foundation for many Web3 applications in production today. Both Bitcoin and Ethereum have additional protocols built on top of them. In Bitcoin’s case, Lightning Network facilitates fast and cheap payments. In Ethereum’s case, a few layer-2 scaling protocols have been built to help address its underlying issues.

The rise of layer 1 and layer 2 networks brought about the need to bridge value between them. This is where cross-chain bridges that serve as highways come in, allowing users to move value from one chain to another.

Infrastructure / Category Primitives

This layer sits on top of the protocol layer, and is composed of interoperable building blocks known as “category primitives” that are highly reliable at doing a specific task. This is a dense and diverse layer where projects are building everything - smart contract auditing software, data storage, communication protocols, data analytics platforms, DAO governance tooling, identity solutions, financial primitives, and more.

A few good examples here include Uniswap, a protocol that allows the swapping of one asset for another, and Arweave, which enables data to be stored in a decentralized manner. The point is a user cannot do much with the standalone application, but when combined, these category primitives serve as Lego bricks that a Web3 developer can use to construct an app.

Use Case Layer

This is where it all comes together. For example, Axie Infinity uses Ethereum tokens and NFTs that can be bridged to a low-cost/high throughput sidechain called Ronin. Players use DEXs such as Uniswap to swap ETH for the tokens needed to play the game. Another good example is Mirror, a decentralized blogging platform that uses Arweave, a storage protocol to store data. Meanwhile, the protocol leverages Ethereum to let publishers get paid in crypto, often by directing tokens to their ENS address. If you have noticed, Uniswap appears both in our infrastructure and use case sections, but do not let this confuse you. Even though Uniswap is simply a series of smart contracts at its core, it also provides a frontend that users can interact with directly. In simple terms, it simultaneously serves as a standalone user-facing app and infrastructure for other Web3 apps like Axie Infinity.

Access Layer

At the top is the access layer hosting apps that serve as the entry point for all manner of Web3 activities. So, do you want to play Axie Infinity, or get paid for your content on Mirror? You will first need a wallet that serves as the main point of entry for most Web3 apps. You can employ the services of fiat on-ramps such as Moonpay, Wyre, or exchanges such as Binance and Coinbase that help you to trade your fiat for crypto to get started. Once you have crypto in your wallet, you can head to an aggregator such as DappRadar to browse through and connect to all kinds of Web3 apps in one place.

Remember, the protocols, infrastructure, user applications, and access points named above make up the nascent yet evolving world of Web3, an internet that its users own. Beyond ownership, the power of Web3 lies in its modularity and interoperability. Therefore, there are endless ways that the above stack can be combined to create new and exciting use cases.