Web3’s growth demands strong infrastructure. Discover how decentralized security, verified data, and distributed AI are revolutionizing the industry. From DeFi to AI, these innovations are fueling the next generation of decentralized applications.
Every day there are news stories that discuss the ups and downs of the markets, and crypto is no exception. If you are a nervous trader, the industry isn’t the place for you. A single news story on regulatory announcements, a single platform suffering a breach, or a token breaking new records by spiking can impact the market significantly.
Trying to tease out upcoming bear or bull markets can also be difficult, even if the trend has been extremely strong over the last five years. While some traders like to be hodlers, others like to look where they can do their best.
This article certainly isn’t going to offer specific trading advice, but what it can do is shine the light on the rising tide of infrastructure within the Web3 community. As the industry has grown and innovations have driven new use cases, new dApps, new games, and new platforms, there has been a growing need for all of this to be supported by fast, efficient infrastructure that can handle the Web3 needs of today, but also those of the near future.
Let’s dive into the key areas experiencing significant growth, what is so important about them, and what they might do in the near future.
Decentralized Security
A key element to today’s Web3, but especially to the near future needs of the industry, is security. Standard encryption is no longer effective as more and more platforms move toward decentralization, meaning that new ways of thinking about security have to be developed.
Fortunately, concepts such as MPC (multi-party computing) and specifically ZK (zero knowledge) methods have been on the rise, with a number of platforms creating breakthroughs that offer fast, efficient security that can create private, secure, on-chain data.
Having on-chain data that remains private opens up a massive amount of use cases that weren’t available before, and using ZK takes away the need for security through a centralized party. Without these innovations, the entire industry would be approaching a major bottleneck soon, so their development will be a major growth area for the next several years and likely beyond as ZK becomes even more efficient.
Verified, On-Chain Data
While other items on this list involve the hardware or programming elements of the infrastructure, this item focuses on the actual data that will power many of the platforms within the next-gen Web3 ecosystems.
Given that many of the applications rely on trustless transitions and decentralized environments, the data must come pre-vetted to have true value. The ability to bring on-chain data to Web3 will be a major building opportunity for organizations, although the development of this technology is especially complex.
Currently, the Flare Network is likely the industry leader for this niche market (they just hit both an all-time TVL and broke a 1M wallet milestone), as they are a robust (multi-chain, EVM) platform that contains its own oracles and can enable clients to onboard vastly different data elements, verified and on-chain.
With data driving much of what Web3 does, especially in the growing areas of DeFi and AI, this data-rich environment will almost certainly continue to experience major growth for platforms that can make it easy to bring large amounts of verified data into the Web3 environment.
DePIN
The concept of DePINs, or Decentralized Physical Infrastructure Networks, is on the rise and not likely to stop anytime soon. This model is ideal for taking currently underutilized infrastructure elements like storage, electricity, computing power, etc, and distributing it according to supply and demand across a network.
Models like this have been growing as the technology has been evolving to manage it (think Uber and Airbnb), but with DePINs this model can be taken even further. Specifically, by using a trustless, decentralized system, a DePIN can create a system that is borderless and endlessly scalable.
For example, it could help to manage a DePIN centered around compute power, using thousands of computers around the globe, with each contributor being rewarded, each buyer paying very fair rates, and the process tightly controlled, secured, and regulated.
The DePIN model is made possible because its needs align with what Web3 has to offer in terms of tokenization, decentralization, smart contracts, and security. If all goes well we will continue to find underutilized resources and make more efficient use of them using DePINs.
Distributed AI
Last but not least, the infrastructure of Web3 is focused on distributed AI. While this can be a form of a DePIN depending on how it is set up, distributed AI deserves its own mention because there are a number of ways it can grow, focusing on the hardware computations but also focusing on many different computers each taking a part of a parallel processed algorithm.
In either case, a distributed AI system can allow for significantly powerful AI algorithms to be processed using a distributed network of computers, which takes a tremendous burden off of the growing number of potential users (companies, researchers, academics) since capital expenditures for AI hardware and software can be prohibitive.
This area of infrastructure has perhaps an even more important benefit in the form of access, as there is a growing concern that a handful of companies control a larger and larger percentage of AI models globally. Distributed AI systems help to give more people the opportunities presented through AI, allowing for a society that is itself much more distributed instead of being controlled by a select few.
Final Thoughts
The next year will certainly bring with it ups and downs in the market. While it’s impossible to say whether it will be bull or bear season, Web3 seems to be unstoppable in its overall growth, and its key infrastructure areas will continue to play a major role as more and more people discover its benefits on a global scale.
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