Zee Prime Capital: Talk about the specific categories and development logic of middleware in detail
Author: Cam,Zeeprime Capital
Compilation: Cookies, Chain Catchers
Takeaway: A year ago, Zee Prime Capital co-founder Matti Gagliardi wrote "The Lego of Infrastructure: Middleware"The article pointed out that middleware is encroaching on the encryption industry from the inside out, which quoted the definition of middleware from Red Hat, an open source software product supplier: middleware is a kind of software that provides common services and functions for applications, data management , application serving, messaging, authentication, and API management are all typically handled by middleware.Middleware helps developers build applications more efficiently, acting like the connective tissue between applications, data, and users. At the same time, Zee Prime Capital also took Pocket Network as an example to elaborate on the operation mechanism of the middleware.
Recently, Zee Prime Capital specifically expounded the current middleware categories, as well as the investment logic and development logic of the entire middleware track, in light of the ever-growing middleware space, combined with some invested middleware projects. Here is Chain Catcher's translation of the article:
As blockchain DeFi projects continue to be developed into higher-level applications, their demand for infrastructure such as middleware is also expanding. Zee Prime has been bullish on middleware products for years. Our previous article, The Lego of Infrastructure: Middleware, highlighted the importance and economics of data relay in developing decentralized platforms.
This article will extend to the current middleware ecosystem, especially decentralized applications. While a public chain like Dfinity is the key, end-to-end solution to the problem, until Dfinity is adopted on a large scale, we can only use middleware technology to make up for this deficiency.
Since the early days of DeFi, a plethora of data networks, indexers, access control, and other middleware tools have emerged that are the key glue for next-generation applications. As the complexity of DeFi applications continues to increase, we have seen an explosion in developer demand for infrastructure.
image description
Is this a map of Web 3 middleware?
secondary title
storage and data
Storage is one of the key elements in the decentralized application stack and the foundation of data computing. The Cambrian explosion of Web 3 will also require more storage solutions than simply recording account state at the base layer. Decentralized applications tend to reduce points of failure of centralization, or seek solutions related to Web 2 censorship.
Every application needs the services provided by Web 3 middleware. However, the challenge is DevOps, and not every developer has the expertise to implement Web 3 middleware in their projects. Therefore, there is a need from developers to be able to more easily assemble these infrastructure Lego bricks into new projects.
This reflects the challenges cryptocurrencies face. Concepts such as cryptocurrency wallets, mnemonics, and gas are inherently user-unfriendly, and developers must deal with the complexity for ordinary users.
Storage networks such as Arweave and Filecoin are already live, providing distributed matching systems for supply and demand balancing of storage, and they are the building blocks of any decentralized technology stack. Storage can be divided into two types of protocols, base storage layers and aggregators, which serve as scaling solutions and facilitate wider adoption.
As an important aggregation layer of the storage network, Banyan DAO focuses on brokering storage and improving the economic incentives of existing storage protocol bridges, ensuring that applications can utilize Web 3 storage in a network-free manner and track the source of its usage.
Banyan is also a potential bridge for web2 applications to integrate web3 services, providing them with a decentralized storage solution. These storage solutions are currently complex to implement, and Banyan’s abstraction layer and marketplace resources enhance the accessibility of the DeFi Lego.
secondary title
Data Model and Validation
A blockchain is a state machine that constantly changes state and generates data as computation is performed. The number of accounts, states, and smart contracts grows rapidly over time. Explosive data growth can lead to various problems, from indexing to synchronization and backup of initial nodes, which will eventually affect the scalability and security of the underlying state machine.
KYVE is a decentralized data lake (unstructured raw data) protocol for storing, validating and retrieving data streams. KYVE leverages the Arweave network to provide storage support for applications and protocols, providing more granular solutions for specific data validity.
Since the initial node synchronization time is extremely long and continues to grow, if the number of validators decreases and it is difficult to access new nodes, the security of the entire blockchain network may be jeopardized. The market fit point for KYVE's initial product is node synchronization. By providing easily retrievable, verifiable archival state data, decentralized applications can drastically reduce initial node sync times, allow new validators to be added at any time, and keep the network secure.
While we've covered where and how data is stored, we also need to consider data models and parsing principles. For applications built on top of these state machines, the data generated in the activity may require storage and computing resources beyond the account balance.
Ceramic Network is a decentralized underlying data model network, and its importance to decentralized applications lies in providing a solution for L1 storage account balance status. KYVE aims to provide data validity for L1 state transitions, while Ceramic aims to store state and models of application data outside of account information at the base layer. This solution allows users to create collections of IPFS data (streams), allowing static data (such as data on Filecoin or arweave) to become dynamic data.
In addition, Ceramic provides data model composability in open source API. For example, Ceramic proposes a data standard that can be used across applications, bringing the same composability to data as DeFi. Making data Lego the way money Lego is, allows social networks like Facebook to use its open API.
secondary title
indexer
With the explosion of data generated by applications and networks, decentralized applications need an explanation layer. As with the early web, users had to manually memorize and maintain IP address books, later products like DNS and search engines provided a readable indexing layer.
The scale of index data increases with the development of the Internet, and the data query function is more user-friendly. Likewise, in L1 blockchains and storage networks, the indexing function is very important. Due to the nature of distributed systems, data may be scattered in different locations and difficult to retrieve. An index layer helps to speed up the query process and create a normalized program.
Zee Prime portfolio company Subsquid is focused on Web3 data indexing with the ultimate goal of becoming the next generation API for Web3. The project uses a decentralized multi-layer method to index the data on the chain, supports the Substrate and EVM ecosystems, defines the type and mode of the data on the chain, and then switches the calling method of the new index data from RPC calling to API calling , to enhance the retrievability of the new index data.
The layering consists of two types of nodes: Squids classify data and support subsequent api queries, and Archives continuously extract raw data from the underlying state machine and save it to the database.
Similarly, SolanaFM is also an indexer that serves Solana's ecosystem by processing raw blockchain data into a queryable format. Similar to Graph and Subquery, both solutions target various end markets.
secondary title
Access control
Access control is one of the most important and missing pieces of infrastructure for Web 3 applications. This is an important philosophical question: what type of user sees everything on the Internet? And it becomes more and more important when considering security issues of national/corporate/individual sovereignty. The semantic nature of public blockchain/Web 3 technologies enables users to better differentiate what they access and how. Despite the inherent openness of these systems, an access control framework will allow encryption/decryption based on a specified provisioning framework.
Lit Protocol aims to solve this problem by using threshold cryptography, where users can provide some public credentials (such as NFT in the wallet) to access network resources and content. The network of nodes on which the protocol operates is used to verify proofs and approve interactions, both to verify the proof presented and to verify that the proof satisfies previously set access control conditions. Once authenticated the user can access the requested content. In a way, the Lit protocol is seen as Ceramic's reading solution.
secondary title
integrated platform
To further enable block integration in a 3D bridging world, the Polywrap development platform (formerly known as Web3api) makes the integration of Web 3 protocols more efficient. While Web 3 protocols are open and composable, achieving this composability is much more difficult than for Web 2 applications. This is because each protocol runs specific business logic and is usually packaged as an SDK in a specific language.
Integrating different SDKs is extremely inefficient due to lack of standardization. Additionally, language-specific SDKs mean that protocol developers often release duplicate SDKs in multiple programming languages, making maintenance difficult.
Polywrap's solution is to take advantage of standardized patterns and WASM to reduce the burden on applications. Instead of developers pre-loading SDKs for various protocols into applications, Polywrap integration provides developers with an easy-to-read schema for making calls to applications (similar to REST APIs). This will allow applications to only download the SDK and execute the module pack when needed. This means applications equipped with Polywrap can access Web 3 protocols without barriers.
The user experience of Web 3 applications is still not perfect. As highlighted above, entering gas costs can be a bad user experience. Applications can enhance this user experience by integrating the API of multi-chain protocol Biconomy. The Biconomy platform provides a series of tools to achieve gas-free transactions, fast transactions and instant cross-chain transactions.
Biconomy realizes gas-free transactions by using the ERC2771 protocol and clever forwarding design. The cross-chain function is supported by the liquidity pool on the chain, and the off-chain server (executor node) is used to monitor the cross-chain transactions in the liquidity pool, and the assets on the other end are released after the verification is completed.
For the next billion crypto users to enjoy a smooth user experience, these types of tools are critical. Our goal should be to continuously strive for a more seamless interaction flow between web 3 systems.
While not explicitly falling into a category, Sepana is building a search engine for web 3. Whether it's DeFi, SocialFi, DAO or NFT, Sepana's solution is a search engine that provides web 3 applications and data, enabling users to browse the entire web 3 data, and the protocol will act as a gateway for each ecosystem.
secondary title
How does it all fit together?
The business models of most modern technology companies and applications can be summarized as data production/extraction, data/model control/distribution. The smooth user experience of modern web applications is based on these fundamental processes.
For the workflow of data processing, we hope that the middleware solution can develop in demand and support various decentralized products in the Web 3 environment. Through the project/middleware types listed above, we can clearly see its position in data processing.
In fact many categories span multiple scopes, and it is currently difficult to precisely define categories of middleware due to these overlapping properties.
A commonly used example is social media networks and extends this model to a broader Web 3 middleware stack.
Let's assume that a social media network will be named twatter, and its product will consist of the middleware stack components shown above. Note that we do not consider Social Web 3 to be "Twitter-but-decentralized". We see Social Web 3 as more of an emerging form of media, possibly even referencing Web 2 applications for authentication in decentralized privacy login systems like Sismo (if Web 2 companies are willing to open up their APIs).
The most primitive form is that all data of the platform (username, profile picture, historical activity, social graph, etc.) can be stored and indexed on the storage network in IPFS format, and the data model is stored in Ceramic or Kwil, based on the database solution A Twitter account will have all the data models mentioned earlier.
image description
The flow might look like this
At the time of writing, we discovered an application called Orbis Social that builds a social network using the aforementioned stack of technologies. The next generation of applications is under development, and we expect to see more unique use cases in the coming months.
secondary title
Next Generation App Buildooors and Web 3 Middleware
As Web 3 tools continue to emerge, we need to keep asking, are these tools really for Web 2 folks?
Web 3 middleware should maintain the same fundamental principles as the early crypto pioneers. Teams should choose Web 3 middleware based on its advantages, whether it is security, durability or censorship resistance, the advantages of web3 middleware are very prominent. Even Web 3 middleware has some unimaginable features that might unlock even more new capabilities for applications.
These infrastructure LEGOs can enable deeper network integration, and Tim Berners-Lee believes that the open and composable Internet can provide cheaper management and computing solutions than its Web 2 counterparts. As Dennis Nazarov points out, a complex computing system can be built with a modular and specialized infrastructure. Whereas in the Web 1 and Web 2 worlds, users gave up managing state information for the ability to connect to the Web, the Web 2 giants privatized state information and used it to capture more value.
secondary title
Zee Prime's point of view
In many ways, middleware is the B2B segment of the encryption industry. As a result, middleware solutions tend to be both highly technical and non-intuitive to typical end users (who are not the immediate target audience). Instead of focusing on new DeFi protocols, NFT projects, or GameFi studios, we also believe that focusing on infrastructure is critical to developing new applications.
Taken together, these infrastructure LEGOs (and future LEGOs) will do the following:
Increase censorship resistance
Promote positive-sum economic games
Improve efficiency
innovative business model
Another potential application impact of such interchangeable infrastructure modules and abstraction layers is:
farther and farther away from the bottom;
It has nothing to do with the public chain.
it's not rightfat protocolInstead, it focuses on the impact of continued advances in middleware technology. In principle, this could be seen as reducing switching costs. On-chain applications (mainly DeFi) will have the same nature as the underlying chain (i.e. products built on financial accounts).
More complex non-financial applications will have an unfettered connection to such blockchains, reducing switching costs. For example, the function of free casting NFT access control is very easy to port to new blockchains and wallets, and there are already some applications using this function to attract users across chains.
We firmly believe that adding value transfer to information transfer makes a lot of sense, but enabling that process, increasing the variety of applications and improving the user experience requires a lot of infrastructure legos.
Value capture is one of the most debated topics when discussing middleware investments. In a sense, a really critical middleware looks like public infrastructure, although one could argue that this is also true for some successful applications (such asTwitter wants to be public infrastructure）。
Thus, one might expect middleware to minimize profit margins, royalties, and revenues, but it is more reasonable to investigate the range of costs that are acceptable to the public.
While middleware may seem unattractive, it can easily reach the scale of billion-dollar Lego bricks in the context of a global technological revolution. Since middleware perform specific functions for the application, their TAM is independent of the underlying public chain or the upper application at any time.
While both middleware and DeFi are influenced by the feedback mechanism of token economic models, they differ in their ability to capture value. Middleware projects typically benefit from the supply and demand of their tokens (e.g. network nodes) to deliver the services they provide. Conversely, most DeFi projects have a less clear-cut demand relationship for tokens, and regulators’ concerns about cash flow projects have made the situation even murkier.
It is for these reasons that we continue to search for new middleware solutions that will enable the mass adoption of encryption for next-generation applications. We believe that a new generation of applications will unbundle finance and online commerce. The a16z-style argument is: we don't want skeuomorphic apps, we want native apps.
