5 trends transforming India into a Web3 infra powerhouse
Indian Web3 entrepreneurs have the right mix of talent and tenacity to build innovative decentralized applications and services. Nowhere was it more evident than at the India Blockchain Week, which took place in Bengaluru from late November 2022 through early December.
ETHIndia was at the heart of this entire week. It set a record as the largest event in the history of Ethereum hackathons held so far with over 2,000 attendees from more than 300 cities gathering for the event. Some of the observations made in this piece are from this event.
Wallet wars are getting more intense
Wallets have become a big craze for hackathon developers. It isn't an exaggeration to say that wallets were the most attention-grabbing agenda for the ETHIndia 2022 Hackathon. A group of projects utilized Account Abstraction (AA) to showcase ingenious solutions for self-custody, keeping up current circumstances.
The idea behind AA is simple—unify two types of Ethereum accounts the Externally Owned Accounts (EOA) and Contract Accounts (CA). We now need private keys to make changes on EOAs, whereas CAs run by code. Yet, with AA, all accounts on Ethereum would be able to act like smart contracts. It would open up a wide range of creative use cases in the future.
AA will benefit rollups like StarkNet and zkSync before being rolled out on the Ethereum Mainnet. Visa recently made a great example for L2 integration, building an auto payment solution using AA on Starknet with Argent wallet.
Another example is Banana Smart Wallet which employs AA to create 2-factor authentication for hot wallets. It help users to guarantee their funds stay secure even if they lose their private keys. Firewallet leverages AA to have multiple accounts with distinct roles in the same wallet. Users can set restrictions like the transfer amount of ETH, the whitelist of contracts. Panda Wallet built a seamless UX where you can designate guardians for wallet recovery, and Web3One Wallet similarly leveraged AA to build a cross-chain multi-sig wallet.
Some projects brought the pertinent infrastructure for AA. Jiffy-scan is a transaction explorer for AA wallets, and AASnap is a tool to blend AA with ease to execute AA-compliant programs.
Smart contract wallets and Multi-Party Computation (MPC) wallets are the most noted inventions within the category. Smart contract wallets allow users to supervise funds, sign in with Web3, and interact with Decentralised applications (dApps).
You can program these wallets various features like spending limits and transaction automation, and often extend through modules. Multi-sig wallets, a type of smart contract wallet, mandate multiple signatures to execute a transaction, adding a layer of security and helping to prevent fraudulent transactions.
AA-based smart contract wallets are a very secure and programmable solution. However, it will take more time to become mainstream on Ethereum. In the meantime, MPC can be a short-term solution. However, both these solutions are likely to be complementary to each other long term.
Some projects leveraged MPC or similar tech to solve wallet recovery as well. TrueResQ uses MPC to divide your private key into three shares. Then users can distribute the shares to a service provider like Google login, a decentralized network, and their device. Superior Social Wallet uses SSS (Shamir’s Secret Sharing) tech to enable wallet recovery. SSS is a similar set of tech that divides wallets into several shares.
The movement of the industry leader is also noteworthy within the ongoing wallet war. MetaMask is also participating in the game through MetaMask Flask.
The Flask’s first feature, MetaMask Snaps allows anyone to extend the capabilities of MetaMask. Snaps widely unlocks opportunities to leverage MetaMask. It now supports different blockchain protocols. And you can add new APIs to MetaMask, or modify existing functionality using internal APIs.
Infra Trends: For India, by Indians
Indian projects like ChainPe released a product that allows users to pay any UPI ID with cryptocurrency in the extension of fiat transactions. There were projects like UPCI and DPI seeking to comprise the advantages of UPI for crypto payments.
The Identity Layer is another consequential element of India Stack. Projects like ZK KYC, which enables verification through AADHAAR cards, employ ZKP technology.
However, not all payment-related projects were limited to India Stack. There are other notable solutions. Autopay enables recurring payments, investment dApps or even subscriptions could benefit from this service. Depay allows you to pay through your phone number using Polygon ID, and another team brought LensPay as a part of the renowned social layer ecosystem.
Projects materialising solvents to the ongoing trust and security issues. Proof of Trust was the ETHIndia finalist that targeted to implement Proof-of-Reserve with liabilities augmentation.
Other projects focus on fields across code checks and tradable contracts management, etc, helping to ensure the security and integrity of the cryptocurrency ecosystem. Web3Rescue falls into this basket. It helps users recover funds from hacked wallets. ETHGuard provides real-time security monitoring for VSCode, and SafeGuard offers a range of tools and services to help users secure their cryptocurrency assets.
Zero-Knowledge Proof (ZKP) finds a strong footing
Several exciting projects employed ZK tech. Knowallet is one of them. It is a ZK-based identification layer that prioritizes end-user consent and anonymity. It allows individuals to protect their personal information while still being able to interact with online services. Another project utilizing ZKPs is hideme.lol. They allow for greater control over personal information and improve privacy.
More vertical solutions in this area were also visible. MeData showed a potential for a health computing engine that utilizes ZKPs to ensure the privacy and security of sensitive medical information. Kleio is an interesting ZKP-based project in the dApp discovery sector. It is an on-chain discovery protocol based on an individual's browsing history, entitling users to search and discover new content while maintaining control over their data.
ZKJob is a fully anonymous video-based LinkedIn powered by Web3 that allows job seekers to submit their PR videos to maximize their appeal. It also includes a built-in meeting app for communication with potential employers. And ZK Lancers is a decentralized freelancing platform that enables transparency by ZK tech. They connect clients and freelancers based on a conceivable reputation system.
There are also various projects working on contribution and compensation par, such as SigmaZK - a project that utilizes ZKPs to provide a Proof-of-Work (not the one behind Bitcoin's operation) system more privately.
Altogether, these projects demonstrate the potential for ZKPs to improve the talent acquisition and management flow by providing secure and private solutions for each part of the process.
NFTs go far beyond JPEGs
As far as NFTs go, NFT lending platforms like Uzumeta and ZaPP allow users to earn additional revenue from their idle NFTs by lending them out to other users. Similarly, a project like MetaBorrow explored new models for gaming guilds. The product enabled the user to borrow or lend in-game NFT assets by the staking mechanism. OwnAd targets to create advertisement space on your own NFTs.
Overall, we could reconfirm the clear trend towards NFTs as productive assets. They are helping a lot to make crypto more accessible and user-friendly and paving the way for wider adoption in the mainstream.
There are also some interesting use-cases for NFTs—like in ticketing for offline events or as a catalyst for customer loyalty. These options have come up continuously. Starbucks is the best-known example. They are currently in a beta-test phase for a rewards program using NFTs. Odysseys, the loyalty program, offers users discounts, and digital experiences as rewards. While it's currently unclear how many users are part of the beta test, Starbucks has reported a bullish response from participants.
There were also teams who showcased event management and ticketing experiences through slightly different solutions in the event. EventX and Nftfy brought super-app products for offline events. TickEth devised a solution tokenizing all the tickets to prevent skelping activities.
A standout was Beyond Club, operated NFTs to offer exclusive rewards, access to events, and other perks to loyal customers.
dNFT, or dynamic NFT, is said to be the next step in the evolution of NFTs. While traditional NFTs are unique digital objects existing on a blockchain, these class of NFTs can adapt and change in response to external events and data. Smart contracts govern these changes.
dNFTs also fit a variety of use cases, such as real-world asset tokenization, progression-based video games, blockchain-based sports leagues, and so on.
PredictNow is a prediction market around sports tournaments using dNFTs. There was also a cross-chain gaming platform leveraging dNFT called MultiMon. Web3TV showcased a subscription membership platform, adopting dNFT to reward early subscribers. In the meantime, Crown Collectibles launched a loyalty program with dNFT features, targeting to be a powerful advertisement stack.
Social projects remain strong
Data infrastructure projects like Ceramic provide the underlying infrastructure for decentralized social media platforms. Identity projects help users establish and prove their online identities. Some projects like Lens Protocol and CyberConnect encourage users to connect and assemble relationships..
The Lens ecosystem includes a variety of social applications, including Lenster (a Twitter-like app) and LensTube (a YouTube-like app). And that number is growing through hackathons.
Even according to blockchain intelligene and research platform Messari, usage of the Lens Protocol increased around each hackathon, so much so that it is not an exaggeration to say Lens was the top beneficiary of Ethereum-hosted hackathons in the second half of 2022.
Some interesting projects built during ETH India were the TikTok-like app LensTok. We also could find projects like CreatorsLane which allows you to invest in creators you like.
Among the standouts projects outside the lens protocol ecosystem were in the freedom of speech area. Liria and Da CRJ are the projects targeted to serve censorship-resistant journalism.
The decentralized infrastructure of tomorrow is being built right before our eyes by Web3 entrepreneurs all over the country. While Web3 is still at a nascent stage, and Indian builders are flooding the industry with innovative solutions, some of which will go on to drive mass adoption of Web3.
(Disclaimer: One of the companies mentioned in this piece, Cyber Connect, is a portfolio company of Hashed. )
Edited by Akanksha Sarma