Web3 Data is NOT the Problem
An In-depth Look into the World of Web3 Data
Welcome to the forefront of the digital revolution. In the world of web3, with its vast data, blockchain networks, protocols, and tokens, accessing and understanding information can be challenging. Developers often build custom solutions due to the lack of accessible options. This piece addresses the infrastructure problem underlying web3 data accessibility, exploring strategies for transformative success. Let's dive in.
The Challenges of Accessing Web3 Data
The world of web3 data is vast and ever-growing, but it can be incredibly frustrating to access. With all the different blockchains, protocols, and tokens, navigating and understanding this complex data ecosystem requires an upfront investment of time, patience, and money. The data is raw, unindexed, and brutal to merge with third-party data sets. Dapp providers often find themselves building custom tools over leveraging open source and paid solutions.
The current attempts to address these issues are futile as they focus on treating the symptom instead of the disease.
Identifying the Real Problem
The data accessibility problem in web3 is not a data problem, it’s an infrastructure problem.
Now that we’ve properly defined the problem, we can implement a strategy that leads to success.
Throughout the last two years, we used several web3 indexing products. Some, open-source, provided value in the short term. Over time the value was reversed through unannounced deprecated services and the additional resources we invested in making the product work. We later found centralized products that charge for their APIs. It was like having two versions of our town library next to each other. One makes you pay but gives you access to their card catalog. The other is free but requires more than a decade bit more time and creativity to find your book. After a few times navigating and getting comfortable in the free library, there is zero value in paying for admission next door. Like the soon-bankrupt library, companies charging for API access will soon reevaluate their business models.
The Future: An Ecosystem with Free Indexing APIs and Transformers
As we transition into an ecosystem with free indexing APIs, there is an additional hurdle that needs to be addressed. Simplifying access to indexed data is great but not useful if it's not easily configurable into different forms. Please welcome, transformers.
Transformers transform the raw, indexed data into configurable forms. The result is a composable infrastructure that any individual, company, industry, or government building in web3 can configure to their needs.
Looking at data from a single NFT project via an indexed API can give us insight into transaction data. Who is the largest holder? When did they buy? Where did they buy? Powerful, yes. However, scaling across thousands of transactions or adding web2 data into the model is hard. Transformers give builders the ability to overcome these challenges, create, and provide valuable datasets to their users.
The Promise of Composable Infrastructure
Leveraging this infrastructure, let's use the Ethereum, Tezos and Polygon NFT Indexers to get a few baseline stats on chain data. Next, we’ll configure the transformer to compare net new purchases from September 2022-December 2022 on Solona, Ethereum and Polygon using wallet addresses.
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There are over 7.5 million wallets on Ethereum that have ever owned an NFT
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The average NFT price in 2022 on Ethereum was $343
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There are 45,000 ERC721 and 30,000 ERC1155 NFT contracts on Ethereum.
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During 2022, Tezos NFT sales (XTZ) were up 115%
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NFT Market place volume peaked at 1.7 billion on Ethereum in August 2021
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NFT wash trading peaked in Jan 2022 on Ethereum with 4.1 billion in wash trades versus 1.1 billion in organic trading volume.
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From Sept 2022-Dec 2022, new users buying NFTs on Solona dropped 63% and 36% on Ethereum. During that same time, new users buying NFTs on Polygon grew more than 500%.
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With composable infrastructure, developers reduce superfluous costs and technical debt while providing more value to their users.
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To realize Web3's goal of surpassing web2, the applications must be significantly superior to their web2 counterparts. Developers require the same, if not better, tools and infrastructure as those available in web2. With seven years of experience building custom data solutions and paying for what should be free, we’ve gone all in on solving web3’s data infrastructure problem.
The Real-World Impact of Configurable Data
Taking our understanding of configurable infrastructure a step further, we can begin to see its profound implications on real-world blockchain applications. Consider, for example, the way in which DeFi applications can leverage this technology to provide their users with highly personalized and detailed financial metrics. In fact, a study from the University of Cambridge highlights how adopting a more configurable data approach can lead to enhanced user experiences and improved decision-making capabilities in financial markets.
Looking Ahead: The Future of Web3 Data Infrastructure
Moving forward, we must remember that the full potential of web3 data will only be unlocked when we prioritize building and maintaining a robust, scalable, and flexible data infrastructure. This sentiment is echoed in a recent report by Deloitte, which emphasizes the crucial role of a strong data infrastructure in harnessing the transformative power of blockchain technology. By fostering an ecosystem of free and efficient indexing APIs, we are setting the stage for digital transformation and a future where web3 data is not only more accessible but also more impactful.
The Best Web3 Indexing Tools for Strategic Advantage
In today's increasingly decentralized digital landscape, effective web3 indexing tools can provide a strategic edge. These web 3 indexing tools not only provide access to vast amounts of blockchain data, but they also simplify the process of filtering and interpreting this data. Here, we highlight some of the top indexing tools designed to navigate the web3 data universe effectively:
The Graph
The Graph is a powerful protocol that revolutionizes blockchain by enabling easy access to data through a network of open APIs called subgraphs.
Covalent
Covalent is a unified API that offers visibility into vast amounts of blockchain data, providing comprehensive insights for web3 strategies the blockchain network.
Nansen
Nansen offers blockchain analytics for Ethereum-based finance protocols, providing insights into DeFi, NFTs, and more. Their sophisticated tools simplify navigation, understanding, and decision-making based on blockchain data.
QuickNode
QuickNode is an exceptional web3 indexing tool that enhances blockchain development efficiency. It offers reliable, fast, and scalable access to indexes, to Ethereum, Bitcoin, and other blockchain networks. With QuickNode, there's no need to run your own nodes, eliminating operational hassle and overhead.
Embracing these innovative web3 indexing tools can help stakeholders derive meaningful insights from blockchain data in real time, fueling informed strategies and decisions in the web3 ecosystem.
Overcoming Challenges in Web3 Data Indexing
Despite the significant advantages of web3 indexing tools, it's important to acknowledge the challenges that remain. One key hurdle is the sheer volume of blockchain data. As blockchains grow and proliferate, storing, indexing, and querying this data become increasingly resource-intensive. As a result, developing scalable solutions multiple blockchains remains a top priority.
Moreover, issues of data privacy and security in the distributed ledger and web3 space pose significant concerns. Public blockchains are inherently transparent, which may lead to unwanted disclosures of sensitive information. Ensuring the privacy-preserving computation and storage of blockchain data is thus a crucial area of ongoing research and development.
Final thoughts
In conclusion, the world of web3 data presents immense opportunities and challenges. While accessing and understanding this vast and complex web of data landscape may seem daunting, solutions offered by indexing companies like "The Indexing Company" provide a way forward. By simplifying complex data systems and offering tailored indexing tools, businesses can harness the power of web3 data for strategic advantage.
"The Indexing Company" stands out as a leading provider in this space, offering innovative solutions that enable faster build times, cost savings, and streamlined side chain workflows. Their expertise in web3 data indexing empowers businesses to navigate the intricacies of blockchain networks, protocols, and tokens with ease, unlocking valuable insights and informed decision-making.
For businesses seeking to stay at the forefront of the digital revolution, embracing the capabilities and technologies of "The Indexing Company" is a call to action. By partnering with them, businesses can simplify their data systems, gain a competitive edge, and unleash the transformative potential of web3 data. Don't miss out on the opportunity to revolutionize your data strategy and drive success in the evolving landscape of web3. Contact "The Indexing Company" today to embark on this journey towards streamlined and impactful web3 data utilization.