By Fabio Pezzotti, Iconium’s Founder and CEO
Middlemen provide convenience and simplicity in everything—from filing taxes, finding a place to live, ordering food, booking travel accommodations and even online social interactions. Today, our online interactions and transactions are governed by large, centralized platforms like Google, Amazon and Facebook that control our data. While seen as problematic now in the crypto community, there’s no question centralization has effectively powered the peer-to-peer (P2P) interactions that facilitated through social media and e-commerce—the most iconic outcomes of Web2.0.
Now, blockchain is changing what we consider to be the Internet, and Big Tech sits in its crosshairs. In the spirit of continuing the P2P dynamic the early days of Web2.0 fostered, blockchain companies are working to build Web3.0 with privacy and decentralization in mind. No need for a middleman, its logic goes—especially not one that steals your data.
Blockchain is the backbone of Web3.0
Blockchain is at the core of a truly decentralized Internet, redefining the data structures in the backend of the web and introducing a governance layer running on top of our current Internet. Blockchain technology transforms the way data is stored and managed. Its unique architecture allows multiple nodes to stay in consensus on the current state of the dataset without one centralized source of truth.
As self-executing codes activated by users for their decentralized execution, smart contracts serve as an instrumental piece of the crypto puzzle, enabling much of blockchain’s revolutionary capabilities. This allows two parties to engage in the transfer of value without knowing each other.
Smart contracts have widely amplified the use cases of all the financial applications, enabling the growth of DeFi—that means decentralized models of exchange protocols, automated market maker, lending, insurance and more.
But financial applications are just the tip of the iceberg.
The most recent bull market was led by the explosion of NFTs and the Metaverse. Earlier this year, Opensea, the most famous NFT Marketplace, surpassed $5 billion in trading monthly volume, bringing the company’s valuation to $13.3 billion.
While the technical side may sound rather complicated, the user experience won’t differ that much from the Web2.0 to which we are already accustomed. Blockchain is purely an underlying feature empowering developers and engineers to build innovative apps and services that enhance the current Internet experience.
However, even before all the technical aspects, the starting point for the Web3.0 revolution begins with investment. Every burgeoning industry depends on investments, and blockchains are no different. By investing in innovative blockchain ecosystems, investors raise the value locked into them.
Finding the game-changing player
The injection of capital is vital for any ecosystem, as it allows for strong developer activity around the network by providing developers with the necessary incentives. This results in attracting more projects with greater potential and serves as the purpose of the Terra and Secret Ecosystem funds: to support early-stage decentralized apps (dApps) with the objective of building the necessary infrastructure and accelerating development.
When searching for that game-changing blockchain in which to invest, here are a few things to keep in mind:
- The blockchain’s ultimate scope and the competitive landscape. Each blockchain has its own purpose that requires different tech stacks and governance or economic models.
- The ideal blockchain finds the perfect balance between three key elements: security, decentralization, and scalability.
- Financial indicators. The market cap, representing the valuation of the network, and the Total Value Locked (TVL), representing the value of assets locked into the protocol of dApps built on top of the blockchain.
- On-chain indicators. The daily active users and daily transaction volume.
- Ecosystem indicators. The amount of dApps built on a certain blockchain, signaling the “ease of integration,” or the ability of dApps to integrate with other dApps on the network.
- 0 indicators, represented by the size and engagement metrics of a project’s social media community.
Combining these indicators can be helpful to fully understand the size, stability—or volatility—and growth potential of a blockchain ecosystem.
As a tech entrepreneur since the dawn of the Internet era and an early investor in the world of blockchain and Web3.0, the Cosmos ecosystem goes above and beyond just checking all these boxes—and continues to confirm itself as a true game-changer in the industry. Both Terra and Secret are built on top of Cosmos, the so-called “Internet of Blockchains.”
Cosmos is a rapidly expanding ecosystem of independent interconnected blockchains and currently the one with the most value locked, after Ethereum. The network currently hosts over 260 applications and services while managing over $160 billion in digital assets, all connected through the Inter-Blockchain Communication (IBC) protocol.
Based on the commonly held belief that there’s not a “one size fits all,” when it comes to finding the right blockchain ecosystem, enabling each project and community to build and secure their own blockchain within the network, and according to their own specific needs, is essential. With its SDK, Cosmos helps developers build custom blockchains from scratch that can natively interoperate with one another, while the IBC manages the infrastructure linking the blockchains.
When it comes to investing in blockchain and Web3.0, it's always advised to conduct thorough research to make sure the ecosystem represents the best of Web3.0—a truly decentralized blockchain capable of hosting and building a diverse range of apps, projects, and services.
Blockchain continues to prove its disruptive potential as it expands its use cases to more and more sectors. While blockchain technology is already the centerpiece of a decentralized Internet, investing in those innovative and revolutionary ecosystems, like Cosmos, is critical for the industry’s continued success.
About the author:
Fabio Pezzotti, a tech entrepreneur since 1998, graduated from Bocconi University in Milan, Italy. After several business development and strategic consulting roles in Paris, London, and Milan, he founded his first Internet venture, Xoom Spa, in 1999, which became the leading web community in Italy. In 2006, Pezzotti founded Mobango LTD. in London, a unique mobile-user content platform, one of the first Android app stores. In 2010, he founded Xandas New Media Ventures, a venture studio investing in seed startups. In 2017, Pezzotti discovered Bitcoin and blockchain, deciding to fully devote himself to researching and selecting the best crypto projects in the world, founding, together with an experienced and international team, Iconium.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
