Web3 is more than just cryptocurrencies and NFTs
Feb 20, 2023
Our big thesis is that a lot more developers will enter web3 and rebuild a lot of the tools that we already have in web2, but in a way that's more privacy friendly, publicly verifiable, and secure. According to us web3 is more about self-sovereign data, censorship resistance, end-end encryption, and permissions around what you can do in an application.
In Web3, you have this trade-off with decentralization versus cost & performance. So the more decentralized you want to get, the more it costs and lowers the performance. What Zk allows us to do, is to have the best of both worlds. Right now it's really hard to build decentralized databases on-chain because transactions are very expensive because of gas fees, storage fees on Ethereum, etc.
There are a couple of different decentralized database projects out there, but all of the developers we've talked to don’t like using the other ones because they introduce new complicated concepts that are unfamiliar to most developers.
What we heard from developers using Polybase is that it's very easy to understand and build an application. The reason for that is that our north star has always been that a developer shouldn't know whether they're building with a web2 database or a web3 database.
We've seen people that want to come in and build decentralized versions of Notion where it's easier to access that data. More portable, decentralized forums where you own your identity.
One of our customers is building a decentralizing exchange on top of Polybase and that has some really unique attributes to it. With the fall of FTX and many other centralized exchanges, decentralized exchanges are going to be more relevant going forward. They're already bringing in more money and real value.
For starters, DEX can be built with high performance in mind. So for example, high-frequency trading can be done on top of it, which is not possible on any other publicly verifiable DeFi exchange today because it's too expensive. You can't do 1000 trades per second.
The second area is transparency in their order book. All transactions initiated go into an order book and then there's a matching algorithm that goes through and says this person wants to buy, this person wants to sell, we're going to match them.
In all non-decentralized exchanges, that's a private process. For example, in the New York Stock Exchange, it’s a big problem because people are always claiming that other orders are getting preferential treatment. It's not purely based on the time they came in.
This has been been a problem since the beginning of exchanges. Now, in decentralized exchanges, that problem is solved but then you lose the performance and cost aspects. This is where Polybase kicks in and helps you solve that tradeoff.