Web3 projects are driving innovation in the digital economy and capturing the attention of users and venture capital investment.
What you will learn
Web3 projects can help users monetize their own data, in contrast to the way major corporations harvest and profit from users' personal data on Web2.
Smart contracts — digital, self-executing contracts built on blockchain — are a key component of web3.
Hedera is helping to lead web3 development in several ways.
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The term web3 comes from the idea that the world wide web is in its third phase. The first phase began with text and old-school static images on computers. The second phase, based on centralized servers, brought the interactive applications and social media platforms that billions of people use every day. The third phase is being driven by decentralized applications (dApps) that use smart contracts, tokenized assets, and distributed ledger technologies. This new phase has both startups and mainstream corporate giants creating fintech innovation.
In web3, blockchain plays an integral role in creating a webscape based on decentralization and tokenomics. With web3 projects, users can monetize their own data. That's a major change from web2, where big companies profit from sucking up vast quantities of personal data from people surfing the internet. Community-led web3 projects also offer consumers alternative games, art, fashion, and finance apps that are secured without a third-party entity, while maintaining high standards of security and regulatory compliance.
That’s possible through the power of blockchain and smart contracts. As a distributed ledger technology, blockchain creates a decentralized network with unprecedented transparency. Smart contracts are programs stored on a blockchain that run and execute functions automatically and according to set criteria. Smart contracts can perform a wide range of functions — all without any intermediaries or enforcers.
This article will cover how web3 can revolutionize the way people interact with their computers and smart devices thanks to the power of smart contracts. We'll also review some cutting-edge web3 projects.
First, let’s dive further into the web3 ecosystem to see how the main elements fit together. We’ll cover how web3 interacts with smart contracts, cryptos like Ethereum, and decentralized applications or dApps. Then we’ll zoom in on the details of what some new blockchain projects look like and what makes them so interesting.
Smart contracts — digital, self-executing contracts built on blockchain — are a key component of web3. These contracts power a range of functions, from executing financial transactions to identifying users to running a decentralized autonomous organization or DAO. Thus, smart contracts underpin web3 and the new digital landscape.
We will now break this down further by giving an example of programming mechanics. Let’s say you want to write smart contracts on the blockchain for basic transactions. To allow people to view information that’s already stored on that contract, you can invoke something called a function call, which doesn’t require a fee. However, for users who want to send a new transaction object, the smart contract requires a fee, which is called a gas cost. Programmers can put countless combinations of options, features and functions into smart contracts to achieve their goals.
A transaction hash is a string of characters that’s unique to a specific transaction that happens on a blockchain. String memory, which hosts all the hash information, is located on the public blockchain. This data can help you find your transaction object, funds, and transaction receipt. Additionally, your smart contract address is another piece of unique information on blockchain made possible through the technology of the interface and form control. Records of events that happen related to smart contracts, like changes to the smart contract state or token transfers, are stored in event logs.
Thus, all information stored is accessible, transparent, and secure.
Decentralized applications are also essential elements of web3, in part because they give users accessible interfaces with blockchain functions. They also give users ways to own and sell their own data. A decentralized application can be built on Ethereum or other networks, such as Hedera and Solana. DApps allow users who are not computer programmers to interact with smart contracts, giving them a much higher level of functionality. The dApps can take the form of video games, social media apps, virtual worlds, trading in financial markets, and more.
The term “web3 projects” refers to projects built using the above technologies and tools to transform the internet. In the last few years, the market for web3 projects has boomed. At the core of web3, projects like these encourage people to take action collectively and build a new tokenized society.
The way that web3 and smart contracts work together will be instrumental in growing crypto markets. Here's a look at five successful projects that show the range of web3.
DAI is a cryptocurrency that uses smart contracts to maintain a 1:1 peg with the U.S. dollar. To achieve its peg, DAI uses an open-source software called Maker Protocol that locks various cryptocurrency assets in smart contracts. Unlike other stablecoins, which are typically backed by digital assets, DAI is backed by collateralized debt.
Users can lock crypto assets in the protocol to generate new DAI tokens and return the DAI tokens to the protocol to recover their assets. Still, DAI's total supply isn't altered when users borrow or return tokens. Instead, the protocol's smart contracts vary the supply in response to the number and price of the tokens in its contracts.
Uniswap is one of the longest-running and most-popular decentralized exchanges on the Ethereum network. It was one of the first to use and perfect the now-commonplace Automated Market Maker (AMM) model. The Uniswap AMM model lets users trade coins, earn rewards for supplying liquidity, and add new tokens for other users to trade.
Chainlink is a decentralized oracle network that lets users connect their external data with the blockchain. Oracles feed external information to the blockchain so smart contracts can be executed based on real-world scenarios. For example, an online gambling smart contract allowing users to bet on weather events could be linked with a weather station via an oracle.
The Graph is a query protocol on Ethereum's middle layer that allows developers to design dApps. The project's unique angle is the dApp-launching efficiency it offers, allowing users to save time and energy in development. The Graph's mission is to become a powerful decentralized web3 layer that's immune from the manipulation of tech companies. Additionally, the initiative shortens the time it takes to bring dApps to market, saving time and effort during the development process.
Indexers are in charge of maintaining nodes and processing queries across the network. In doing so, they stake the native GRT token. Because malevolent action could cost an Indexer their stake, this incentivizes all network participants to perform honestly. GRT started 2025 with a $2.53 billion market cap and fully diluted valuation (FDV) of about $2.87 billion.
Basic Attention Token (BAT) is the Brave web3 browser's native cryptocurrency. Brave is a free, open-source web browser that rewards users for their "attention" in BAT. Thus, by watching privacy-preserving advertisements, users can earn a passive income. Brave also protects users from being followed around the internet by website trackers and other unpleasant actors.
Brave offers the TOR browser, which enables semi-private browsing. The browser reduces internet surveillance and gives you a safe way to hide your surfing history from big tech corporations. To increase rewards, users can choose to view more ads. Furthermore, Brave includes a "Tip" option that may be connected to a variety of social media platforms. This tool makes thanking your favorite content creators simple without any third parties, so that the creators get 100% of your tip.
Ready to dive deeper into web3 and create smart contracts of your own? You can build dApps, protocols, and smart contracts at Hedera using its innovative technology. What makes Hedera unlike anything else in the digital economy is its Hedera Hashgraph and unique protocol. It offers scalability, predictable gas fees and carbon-negative energy use. Creating smart contracts using Hedera Hashgraph is straightforward and efficient.
Here are a few examples of the way Hedera is providing web3 leadership:
A web3 professional strike league, Karate Combat, will launch its layer-2 blockchain network on Hedera in early 2025. Also, 10% of KC's KARATE tokens going to an incentive program targeted at HBAR, Hedera's native token. The HBAR Foundation, which promotes developing on Hedera, is the exclusive blockchain sponsor for KC.
An international fintech firm that operates on the Hedera ecosystem, the Hashgraph Group, is launching a $100 million web3 venture fund. The fund will invest in companies that produce enterprise-grade solutions and products for the Web3 economy on Hedera.
Hedera is a founding member of the Decentralized Recovery Alliance (DeRec Alliance). The alliance aims to create standards to simplify the recovery of lost digital assets and make web3 as user friendly as web2 environments.
Hedera has formed a $250 million initiative with Saudi Arabia to support Saudi and international companies in developing innovative technological solutions. Meanwhile, the Hedera Council has added Hitachi America Ltd.(Hitachi) as a member. A giant in electronics, power and industrial equipment and services, Hitachi is interested in building web3 solutions for end-to-end supply chain and sustainability on Hedera.