Web3 – especially in the fintech space, everyone seems to be talking about this new and improved world wide web, how it will change the way we use apps, and how we’ll handle our data and finances.

But what exactly distinguishes Web3 from our current Internet stage? And how does it affect the way we should design mobile and web apps?

What is web3?

When talking about the characteristics of web3, it is unavoidable to go over the previous two stages of the internet. So let us go on a brief historical journey of the Internet that we all know and love.

Web 1.0 (1991 – 2004)

The very first stage of the internet, which roughly spans the period of 1991 to 2004, is mostly characterized by static pages (as opposed to dynamic HTML). Content would be delivered by the server’s file system rather than a relational (or non-relational) database management system.

As for the users of Web 1.0, they were mostly passive consumers of content produced by only a handful of actual creators and developers. Things like social media and blogs didn’t exist yet. Due to the low participation, Web 1.0 is often called the „read-only“ web.

Web 2.0 (2004 – today)

The second generation of the world wide web – the internet as we know it today –  strongly contrasts the websites of its predecessor, in that all users can actively participate in the creation and sharing of content in a more dynamic environment.

Features like Social Media (Facebook, Instagram, Twitter), video sharing sites (YouTube), blogs and wikis (Tumblr, Wikipedia) image-sharing websites (Flickr, Pinterest), podcast-hosting sites (iTunes, Spotify) and more, all provide easily accessible platforms that promote the creation of user-generated content, heavy interaction, and the possibility of monetizing said content.

Navigation of the Web 2.0 is quite easy because a small number of software behemoths, like Google, Amazon, Apple, and Meta (Facebook), provide easy-to-use those platforms in exchange for user data. When interacting with a Web2 site, you operate the frontend, which sends data to the backend, which in turn communicates with the database – and all these steps are bundled on centralized servers and sent to users through an Internet browser.

Web3 (the next era)

One of the core aspects of Web3 include the decentralization of the Internet. Albeit a long process, Web3 aims to gradually replace data processing on centralized servers with a new, more decentralized process. Instead of storing the data in a traditional and centralized database, which is usually controlled by one administrator, it will be stored on the blockchain, which functions as a shared peer-to-peer ledger and uses proof-of-work to protect the data from being corrupted.

In decentralized networks, the code that powers an application is distributed across a multitude of  different peer-to-peer nodes, or servers. Those servers, for example could be black boxes on a server farm, or even your own computer. Because in Web3, individual users can offer their device to be part of this decentralized network.

Along with decentralization come aspects like anonymity and security – issues that are always subjects of conversation in web2. With Web3, concerns regarding privacy and security will supposedly be a thing of the past. Apps that are built and located on decentralized servers, are commonly called dApps (decentralized applications). Decentralized finance apps in particular are called DeFi apps.

All in all, you could best describe the new era of the internet with these characteristics:

• Decentralized apps and websites
• All-round transparency
• New (and mostly better) Security
• Crypto-driven

How to best implement design in a web3 page

One of Web3’s biggest shortcomings is that it is simply too complex and too difficult to understand for most people – especially for those, who have little to no experience with topics involving crypto, blockchains etc. Web3, NFTs, DeFi, Tokens, DAOs… – your average Internet user will barely know any of these terms, much less understand their meanings.

You need to tackle this issue and reduce the cognitive load, as well as wipe out any possible insecurities users might have regarding the use of dApps, and make Web3 pages and applications more attractive for a bigger number of users. Therefore, is absolutely necessary to implement design elements that can guide them through decentralized apps and websites, and guarantee a better understanding and user journey.

The first pillar: education

Whether through small user-interactions, simple animations, pop-ups, or the inclusion of familiar, simpler language – help the user understand the actions he is about to take and make it easier for them to navigate the app. Remember: as of now, most people don’t understand the processes and functions behind technologies like blockchain, so it is imperative that you guide them smoothly on their journey of understanding these concepts, with the help of design.

Use as little jargon as possible to reduce the cognitive load on the user and make his experience on your app more enjoyable. When you need to use technical terms, consider incorporating a small text with a brief definition of the term. By sticking to familiar language and terms, you can better connect the product to the user.

One way to educate new users can be through comparisons involving features and concepts they already know about. See, for example, the comparisons Ethereum makes while highlighting the benefits of web3. Here, they compare Web2 Twitter, where the company can censor any account or tweet, with a fictional Web3 Twitter, where censorship is impossible due to decentralization.

The second pillar: transparency

Besides education, all-round transparency probably turns out to be the most important topic to tackle regarding the usage of Web3. If you want people to trust and use your Web3 sites and applications, you need to clearly communicate to them, what data is handled, how it is handled, where it is stored, and why it is needed.

Security – transparency regarding the security of your app is key to building trust with your users. Word is that blockchain technology makes it extremely difficult, if not outright impossible to get hacked – in reality though, it certainly is still possible. Take for example the BadgerDAO Hack, where $130M worth of cryptocurrency has been stolen.

Essentially, the level of security of dApps is bound to the strength of their blockchain codes. It’s best to inform your users about your security measures – consider giving more tech savvy users the ability to read more into documents that outline your security measures and fallbacks. Being open about security will likely increase the trust users will have in you and your app.

Transactions – especially when handling De-Fi dApps, it should be mandatory to allow the user to look into the breakdown of a transaction, access pending, and confirmed transactions. Give them the ability to control and understand the processes they undertake while using your app.

In Addition, consider giving the option to view the value of cryptocurrencies in FIAT currencies. If you are, for example, building a crypto wallet, you’d want your users to easily understand the values of the different crypto-currencies they might send or receive. Currencies like US$ and € are still regarded as standard currencies by the majority of people – therefore, you should give your users the chance to understand the value of different crypto-currencies. Especially for new players, this option will ease their way into the crypto-space.

The third pillar: familiarity

This third pillar is partially covered in the „education“ segment, but I’d like to emphasize on it a bit more. In its current stage, Web3 and most Web3-based applications appear to be mostly going the „by devs for devs“-route, meaning that your average internet user will either not see any use and value in your products, or will not understand the problems they aim to solve. Developers in the Web3 space need to focus more on the concrete solution their product will provide to a real-world problem – and focus less on how „futuristic“ and „life-changing“ their new technology is.

Especially now, during its early stages, it is best to keep the look and feel of web3 apps familiar – as in, similar to Web2 products – in order to get more people on board. Using a Web3 application shouldn’t feel much different than using a Web2 one. That way, you create a smoother user experience for people that are still new to things like crypto wallets, blockchain technology etc.

Conclusion

Web3 is still a pretty new phenomenon and too far way from the mainstream. People either don’t understand Web3, or distrust it – or both. To change this, developers and designers need to make their dApps and websites more accessible and establish trust through means of education, transparency, and familiarity.

If you are unsure, whether your app or website currently has implemented these standards, or feel that you could do more to make your product even more accessible, feel free to contact us. We would love to take a look at your current implementations and advise you on possible changes.