The immutable aspect of smart contracts makes it a double-edged sword, if Web3 developers cannot easily patch known vulnerabilities
The Southeast Asia region is positioning itself as a go-to destination for blockchain startups. To date, there are more than 600 blockchain startups headquartered in the region, owing to the population’s relatively open-minded outlook towards Web3.
Why Web3 is becoming a magnet for builders
Blockchain technology, a core pillar of Web3, has been embraced by ambitious startups due to its fast-paced innovation and disruptive opportunities.
“In light of recent efforts to shut down and/or block certain applications and websites, developers are opting for a true Web3 decentralised digital infrastructure, as opposed to centralised providers. This provides the resilience that dApps or protocols need, which is impossible with the Web2 infrastructure riddled with centralised choke points. This trend will only continue to gain strength as entrepreneurs and developers realise the importance of building on decentralised technology,” says Kyle Rojas, Global Business Development and Partnerships at Edge & Node, the founding team behind The Graph.
Business-wise, digital solutions using blockchain smart contracts streamlines day-to-day processes, ensures greater transparency and saves cost. Smart contracts guarantee higher data immutability, allowing business partners to execute agreements while minimising human errors.
The not-so-smart side of smart contracts
Although smart contracts have undoubtedly brought innovation to Web3, their rigidity poses serious limitations. For instance, deployed smart contracts are difficult, if not nigh impossible to change in case of code errors. If an open-source smart contract is copied by others, it can be an arduous task to quickly notify everyone who copied the code.
The consequences are not cheap. In fact, over US$2 billion worth of assets has been hacked from decentralised finance (DeFi) alone this year, due to exploits found in publicly exposed source codes. The immutable aspect of smart contracts makes it a double-edged sword, if developers cannot easily patch known vulnerabilities.
Despite the setback, the Web3 industry is estimated to reach US$42 billion in market size by 2028. Advances in protocol layers, as well as NFTs, can be key drivers for industry growth. “Recent blockchain development trends in Asia include Zero-Knowledge (ZK) and infrastructure projects built on Move based programming languages, NFT infrastructure related to anti-fraud and dynamic NFTs, and gaming,” says Harrison Goldsmith, Investor Relations at Kernel Ventures.
Ushering Web2 talent into Web3
The launch of new blockchain-native programming languages are not unheard of. As the scaling limitation of smart contracts becomes more evident, developers around the world continue to seek alternative solutions. Take for instance the layer-1 blockchain protocol Aptos, which aims to utilize the Move language in a bid to “design a network that is more reliable and predictable for large clients interested in embracing the blockchain.”
Another approach is to get rid of smart contracts altogether. “Many real world applications require large throughput, which is a core limitation arising from serialised smart contracts. Unlike smart contracts, Smart Assets can be utilised alongside a high volume of concurrent requests to make blockchains useful in enterprise apps,” says Michael Holdmann, CEO and Founder of PraSaga.
PraSaga features a dynamically programmed distributed ledger solution that includes a global ID for every single object on the blockchain. The platform allows existing Web2 developers to build using a Python-based programming language and blockchain operating system.
Python is one of the most widely adopted coding languages in the world with 8.2 million developers and counting. “The best of Web2 industry practices can be brought into Web3 development platforms by tapping into millions of existing Python coders. This will encourage faster adoption of blockchain technology, while surpassing the complex demands of forward-looking businesses and coders,” comments Holdmann.
Widening Web3 exploration for countless industries
Dynamic blockchain solutions can be useful to drastically reduce automotive recall times from weeks to days. Being able to quickly prove that a specific screw in a car engine has the incorrect metallurgical composition, may effectively translate to substantial cost reduction for all stakeholders. Similar concepts can be utilised by global supply chain manufacturers, or pharmaceutical distributors.
Although Web3 is still nascent, a stream of new blockchain tools are penetrating into the hands of developers, enhancing new opportunities for experimentation. To break past what was once speculation, the gold standards of Web2 and Web3 will likely converge to drive tangible innovation.