- Web3 tokens are those that will be used to power decentralised apps (DApps).
- Web3 tokens are built on platforms like Ethereum, but usually have their own platforms associated with them.
- The top web3 tokens are those that are meant to bridge today’s web2 solutions with tomorrow’s DApps.
The term “web3” may have originated less than a decade ago, but its implications are far reaching. While the first generation of the internet (web1) was driven by singular websites, the second generation (web2) saw the rise of platforms — like Facebook or Instagram — the third generation (web3) will be driven by decentralised services, or DApps. And powering every DApp is a crypto token that powers the respective service.
There are two ways to look at web3 tokens. On the one hand you have crypto platforms like Bitcoin or Ethereum, which are being used to build new apps. However, a web3 platform that seeks to make a real impact will usually have its own token too. For example, decentralised games like Decentraland come with the Mana token, while lending platform MakeDAO has a token called DAI.
Here are five of the most important web3 tokens worth watching today:
Simply put, Polkadot is a blockchain platform designed to connect different blockchains. It facilitates interoperability between Ethereum, Bitcoin and other blockchain platforms. But before we get to that, let’s talk about its inception.
Polkadot was founded by Gavin Wood, one of the founders of Ethereum, which is also one of the reasons why so many people put their faith in this token. At the time of writing,
WazirX listed the token at ₹ 2225. According to Coinmarketcap, the DOT token has a market cap of over $1.3 billion.
Polkadot’s design splits the platform into the main — or “relay chain” — and parallel chains, which are also called “parachains.” These parachains are responsible for connecting to other platforms. So, someone building a decentralised finance (DeFi) app can build the platform on the relay chain, and use the side chains to connect and interact with other DeFi solutions.
The first five parachains went live in December leading Polkadot to reach an
all-time-high of $51 at the end of 2021. Other than the fact that Polkadot is backed by Wood and the Web3 Foundation, interoperability, sustainability and scalability are some of the main reasons why this token and its underlying platform is expected to power many future web3 services, according to its proponents.
Polkadot was launched in 2020 and in some ways is yet to be proven. However, there’s an older and somewhat easier to understand one that you can follow. And, it’s called Filecoin.
Like other web3 tokens, Filecoin too will power services in the third generation of the internet, but unlike the others, it hits directly at the core of today’s web2 business models.
Experts, critics and users have often argued that big tech firms like Facebook, Google and Microsoft wield so much power simply because the majority of the world’s important and sensitive data is processed on their servers and stored in their data centres. Which is what Filecoin aims to intervene.
This decentralised storage network began in 2014, and has since powered many web3 apps. The idea behind Filecoin is simple — get users to join the network and share the storage space on their devices so that data can be stored over a decentralised, and potentially global network.
The idea actually has been explored in HBO’s hit show Silicon Valley with DApp called ‘PiedPiper’. None of the users actually own any of the data, and no one user has access to all of it either. Since Filecoin has built a huge network of its own, it now offers this as a sort of a data centre solution for developers who don’t want to depend on traditional web2 storage.
The FIL token powers the network. It is what Filecoin offers to those who are letting others use their storage, and its price stood at ₹2,430 on
WazirX at the time of writing. The more platforms that use Filecoin, the more the chances of FIL increasing its already large $318 million market cap.
Like Filecoin, Arweave is also a decentralised storage solution. In the company’s own words it’s “a collectively owned hard drive that never forgets”. Like Filecoin, ARWeave charges other services, users and companies a fee to use its decentralised storage solution.
The upfront fee is where ARWeave sort of differs from Filecoin. It promises that a single GB of data will be stored forever. For those providing this storage, the cost of storage falls with time, as more and more data is stored. Which makes it worth it for them too.
The AR token was priced at just under ₹4000 at the time of writing and its market capitalisation stood at about $24 million.
That said, it is the 54th biggest cryptocurrency today, with a market capitalisation of over $2.5 billion.
The part that might make it really lucrative to an investor though is that despite existing for such a long time, the BTT token was only worth ₹0.2 on WazirX at the time of writing. And that’s not because Bittorrent doesn’t have value. It’s because it’s new to the crypto world and its ‘to the moon’ moment is yet to occur, if at all.
What BitTorrent has over any other web3 token though is a network that has been built over the past 21 years. It’s already the world’s largest file-sharing network, and it could use BTT token to plug into future web3 streaming services and more.
Speaking of tokens that can be useful for streaming and content firms, the Theta Network is yet another one to watch. At the time of writing, this token had a market capitalisation of over $4 billion and was the 40th largest crypto token by market capitalisation, according to Coinmarketcap.
Investors can trade the THETA token on WazirX against USDT. At the time of writing, THETA was priced at $3.99.
Theta Network is a blockchain platform that’s designed for video delivery networks. Video delivery platforms today, from Netflix to Amazon, Hulu and more, all depend on a centralised delivery network. Which means that all the content resides in their own data centres. Theta Network is somewhat like Filecoin, and aims to break this network down to a decentralised nature.
Some of the biggest tech companies today, including Sony, Samsung and Google, have partnered with Theta already. It is one of the main reasons why people believe in the possible real world use-cases this network could have in future.
All five of the above web3 tokens can be traded on crypto exchanges, including one of the leading players in India,
Disclaimer: This is a sponsored post in partnership with WazirX. Do your own research (DYOR) before deciding to invest in any asset, cryptocurrency or otherwise.