Building the Decentralized Web : A Survey of Blockchain Projects Working to
Construct Web 3.0
Ian Lapham
Brown University Computer Science
ianlapham@gmail.com
Abstract
Blockchain technology is paving the way for systems that
are more decentralized and truly peer-to-peer and the con-
cept of Web 3.0 is emerging as a result. In this new version
of the web users will be able to interact with each other
without the need of third party organizations to establish
trust. Users will be able to control their own data, en-
gage in private communication, and use services governed
by logic contained within blockchains. In order to imple-
ment this new web architecture a variety of new protocols
are being developed with blockchain as the backbone. This
report aims to survey the current state of the blockchain
space, with specific focus on blockchain projects working
to build layers of the Web 3.0 technology stack. This re-
port focuses on projects solving problems in the following
4 sub-sectors : global consensus engines, data exchange
protocols, scalability methods, and interoperability meth-
ods. Within each sector we provide an analysis of specific
blockchain projects, the current state of development, and
future work that will be required wihtin the space. To goal
of this report is to provide a glimpse into blockchain tech-
nology in 2018 and to give a perspective on the power and
capabilities of these new technologies within the context of
Web 3.0.
1. Introduction
blockchain technology is one of the most rapidly
transforming and fast-paced sectors within emerging-tech.
While research on blockchain dates back the the 1990s, new
developments within the space have given the technology
mainstream attention. Groups ranging from individual de-
velopers, to large financial firms are using blockchain to de-
velop new systems and solutions with large varieties of use
cases. Primarily, this technology has allowed for the cre-
ation of truly decentralized newtorjks.The most mainstream
application of these new decentralized networks have been
crypto currencies, of which thousands were created in 2017
1
alone.
However, to describe blockchain as purely the backbone
of crypto currency would be incorrect and limited in scope.
Teams are using blockchain to create a variety of power-
ful and important developments including truly decentral-
ized applications (Dapps), decentralized organizations, new
communication protocols, and arguably an entire new ver-
sion of the web itself. Before exploring the specifics of
these new developments we will define key concepts at a
high level such as blockchain, decentralization, and Web
3.0.
1.1. Blockchain Overview
At its highest level blockchain is a ledger system that
groups information into Blocks and then links them using
cryptography. Unlike tradition methods of data storage, in-
formation on a blockchain is distributed across all nodes
within the network. As transactions on the blockchain oc-
cur, new blocks need to be generated or mined and added
to the chain. The processing of mining involves verification
of the validity of a new block, which occurs through some
type of defined consensus protocol (such as Proof of Work,
Proof of Stake, or others) [1]. The differences between the
protocols will be discussed later within the scope of the cur-
rent projects that are using them. Blockchains can be pub-
lic, like the Bitcoin blockchain, or private (used primarily
by enterprises or governments).
Aside from decentralization, there are the concepts of
persistency and auditability, which Zhenh[2] outlines in his
report on the use cases for blockchains. Persistency relates
to inability to alter or delete information on a blockchain af-
ter its been added. Auditability refers to the idea of a global
truth, or one state that all nodes have access to when re-
trieving information from a certain blockchain. We will not
explore the in-depth technical aspects behind blockchains
such as Merkle-Trees and Hashing techniques, as this re-
port aims to focus more on the use cases of blockchain and
specific projects that are being developed now.
1.2. Decentralization
The majority of the networks and services we en-
gage with online are centralized, some popular ones being
Google, Facebook, Amazon, and Uber. In addition, the data
architectures of today rely heavily on the same client-server
model that was developed over 20 years ago. This type of
model poses threats to privacy, security, and general func-
tionality. To combat these issues, decentralized network
architectures have been proposed and researched. Decen-
tralized networks are not new; successful implementations
already exist such as BitTorrent and the Tor Browser.
However, with recent innovations in blockchain tech-
nology we have begun to build successful decentralized
systems in a variety of sub-sectors including file storage,
payments, computing, insurance, and much more (which
will be described later). Vitalik Buterin, the founder
of Ethereum, defines decentralization on a 3-Dimensional
axis. Architectural (de)centralization refers to the amount
of physical computers there are within the system. Po-
litical (de)centralization refers to the amount of individu-
als or organizations that control these computers. Logical
(de)centralization refers to the data structures and interfaces
that define the logic of the system, which is exemplified in
his article with the question - ”does theinterface and data
structures that the system presents and maintains look more
like a single monolithic object, or an amorphous swarm?”.
[3] For the remainder of this report we will mostly refer to
a decentralized system as one that is politically decentral-
ized, architecturally decentralized, but logically centralized
(as most blockchains are).
Vitalik’s Description of Centralization
2
For the remainder of this report we will mostly refer to
a decentralized system as one that is politically decentral-
ized, architecturally decentralized, but logically centralized
(as most blockchains are). Decentralized systems are bene-
ficial because they put ownership, privacy, and power back
into the hands of users. Additionally, they allow us to build
powerful peer-to-peer infrastructures where individuals can
engage without shared trust or knowledge.
1.3. Web 3.0
The web as we know it today is generally referred to as
Web 2.0 by experts and the public alike. This is the web
constructed of client-server architectures with rich central-
ized applications built with protocols such as SMTP, FTP,
HTTP(S), HTML, CSS and JavaScript. [4]. Web 3.0 is a
relatively new term being used to refer to a more decen-
tralized version of the web. Gavin Wood, one of the origi-
nal Ethereum developers, describes this version of the web
as one where all communication is encrypted and private,
information is agreed-upon and stored within a consensus
ledger, and control is not given to any entities except the
users of the network itself. [4]. With this version of the web
users will ideally own their data, engage in unmonitored
communication, and transact peer-to-peer without the need
for third-party entities such as Google or Facebook. How-
ever, the web is a highly complex and integrated system;
to successfully build a functioning Web 3.0 many new lay-
ers and protocols are required, and blockchain technology
is prime for aiding this development.
1.4. Aims and Goals
Recent advancements in blockchain technology are al-
lowing us to build and implement this new version of the
web. Changes are being developed in many areas including
file storage, data transfer, identity management, DNS rout-
ing, payment systems, computation and much more. Within
the scope of building a decentralized web, there are hun-
dreds of blockchain projects currently developing solutions.
This report aims to focus on the projects that are building
some of the most crucial components to Web 3.0. Specif-
ically, we will survey projects aiming to build solutions in
the following 4 sub-sectors:
Global Consensus Engines - Protocol level tools for build-
ing interaction systems
Data Exchange Protocols - Methods for exchanging data
between systems and users
Scalability Methods - Solutions for creating efficient and
scalable blockchains networks
Interoperability - Tools for connecting blockchains and
support for cross-chain interaction
Within each of these sub-sectors we will survey the spe-
cific blockchain projects working to build solutions, analyze
the current state of development, and address issues and
future developments required. These 4 sub-sectors surely 2.2. Ethereum EVM - The Runtime Environment
do not cover the vast set of problems being worked on in for Smart Contracts
the blockchain space, however they do provide an impor-
At the core of the Ethereum network in the Ethereum
tant survey of blockchain technology in 2018, as well as the
Virtual Machine, or EVM. The EVM is a Turing-Complete
impact the technology is making on the web and society as
256bit Virtual Machine. [6] The EVM uses a State Ma-
a whole.
chine to perform computation the state machine uses a new
form of byte code which is similar to Bitcoin script, as-
2. Global Consensus Engines sembly language, and LISP. [7] The environment is also
both trustless and entirely deterministic. For developers
In traditional software architecture each application is re-
there exists languages such as Solidity and Serpent (Similar
sponsible for maintaining its own state. In the context of
to JavaScript and Python), which compile into EVM byte
the web, servers are responsible for storing this state infor-
code. These languages, primarily Solidity, are the ones used
mation. When transactions occur data is manipulated and
by developers to create smart contracts to provide logic and
updated in whatever database a server is referencing. The
instructions within Dapps of all types. At a high level this
paradigm does not apply to decentralized systems as appli-
implementation creates a ”programmable blockchain” that
cations do not store information within their own servers.
can be used to build any type of decentralized application
However, there is still a need for some global state so that
or structure.
users can interact consistently. Additionally, there is also a
need for a protocol that defines how transactions occur and 2.3. Peer to Peer Network Protocol
some definitive set of rules for interaction. Gavin Wood
presented this idea in his original article on Web 3.0 by stat- Alongside the EVM there is also a communication pro-
ing that ”A consensus engine is a means of agreeing some tocol within Ethereum that allows all nodes on the network
rules of interaction, in the knowledge that future interac- to communicate in parallel. Like many blockchains, the
tions (or lack thereof) will automatically and irrevocably re- Ethereum blockchain can be viewed as a large database that
sult in the enforcement exactly as specified. It is effectively is consistently updated by all nodes in the network. Ev-
an all-encompassing social-contract and draws its strength ery node in the network runs the EVM, which is the basis
from the network effect of consensus.” [4] There are mul- for the distributed nature of the network and the backbone
tiple blockchain projects working to provide this layer of of global consensus. The Ethereum documentation asserts
functionality, the most widely used being Ethereum. that this method of global consensus provides ”extreme lev-
els of fault tolerance, ensures zero downtime, and makes
2.1. Ethereum - The World’s Decentralized Com- data stored on the blockchain forever unchangeable and
puter censorship-resistant.” [8] When combined with the EVM it
becomes relatively simple to create a truly decentralized ap-
Ethereum is the leading consensus engine in the plication. [9]
blockchain space and it being used as a base layer pro-
tocol for many of the projects that we will survey in
the remainder of this report. Ethereum, as described in
the Ethereum White Paper, is a ”blockchain with a built-
in Turing-complete programming language, allowing any-
one to write smart contracts and decentralized applications
where they can create their own arbitrary rules for owner-
ship, transaction formats and state transition functions.” [5]
Ethereum operates uses a public blockchain to store in-
formation and process information. Whats unique about the
Ethereum blockchain is that each block holds information
about state, which includes new transaction, and also ex-
ecutable bits of code called ”smart contracts” (described
next). As each block is mined updates are made to this
global representation of state and distributed to all nodes in
the network. All together, Ethereum is providing a platform
for developing decentralized applications. To accomplish
this Ethereum has two major functions a runtime environ-
ment for smart contracts, and a peer-to-peer network proto-
col. EVM Within Web Stack

3
2.4. Additional Projects
Other blockchain projects are working to build similar
and better versions of Ethereum. NEO is a blockchain
project based in China. NEO is similar to Ethereum in that
it acts as a ”blockchain platform” that enables to develop-
ment of decentralized networks and applications. However,
NEO has some technical advantages over the Ethereum net-
work. First, the transaction speed is much faster on the
NEO blockchain - at this time NEO can handle 10,000
transactions per second vs. Ethereum 15. [10] Addi-
tionally NEO uses a more economic version of consensus
called Delegated Byzantine Fault Tolerance (dBFT) where
Ethereum currently uses Proof of Work. (Further Read-
ing 1) From a security perspective NEO is designed to be
quantum-resistant, making it secure against quantum at-
tacks where Ethereum is not. [10]. These technical differ-
ences give NEO advantages in scalability and performance
over Ethereum. However, there are many proposed changes
to the Ethereum blockchain architecture which may im-
prove the performance of Ethereum in the future (described
in 2.5).
Lisk is another blockchain project working to provide
a consensus engine for application developers. Lisk has
a main chain similar to Neo and Ethereum that stores the
global state for all applications built on the platform. It
also allows develops to create unique ”side-chains” for any
application they develop (A side-chain is a blockchain that
holds data specific to one application that is connected to the
main chain through standardized protocols). Additionally,
Lisk can be compiled from JavaScript which is a benefit for
developers wanting to build decentralized applications with
a traditional language.
2.5. Current State of Development
Currently research and development is being conducted
to make these consensus engines more efficient, scalable
and secure. The first major area of work is within the con-
sensus mechanisms themselves. There exist many problems
with the Proof of Work consensus generation methods. The
first is that massive amounts of energy are wasted to per-
form the hash-based mining work required to add blocks to
the block chain. There are additional economics vulnerabil-
ities to the security of PoW-based blockchains as well. The
original concept of PoW assumed that mining would be dis-
tributed across many nodes where people could mine blocks
using just the CPUs on their desktop computers. How-
ever, in recent years, advancements in GPUs and Virtual
Machines have created an economic threshold to profitable
mining in other words, only those with access to incredi-
bly large amounts of computational power can benefit from
mining in a PoW environment. [11] This has lead to the
development of centralized mining pools where individuals
can join the pool and receive proportional payouts to their
4
purchased hashing power. For these reasons proof of stake
(PoS) consensus mechanisms such as Ethereums Casper
protocol are currently being developed. (Further Reading
2).
Next, there are issues with scalability and efficiency
within these consensus engines. Blockchain sharding is a
technique currently being researched and developed with
the space to help solve the efficiency problem within the
Ethereum network. Currently whenever a node wants to
add transaction information to the Ethereum blockchain it
needs to download and compute the entire history of the
chain in order to gain access to the network. This results
in a slow network that is unsalable and unfit for large, real-
time applications. One solution to this involves breaking
the entire state of the blockchain into smaller components
and distributing them across the entire network for valida-
tion. [12] Multiple projects are under development to im-
plement this technique including the Trinity EVM project,
Geth-Sharding, and Nimbus (Further Reading 3) [12]. Ad-
ditionally, the Ethereum founder Vitalik Buterin (and many
other volunteer developers) are working on a more scalable
execution environment for smart contracts called Plasma.
Alternative solutions to scalability will be discussed in sec-
tion 4 of this report.
2.6. Implications
These consensus platforms have allowed for the develop-
ment of thousands of decentralized applications the are run-
ning live on the networks. At this point over 1,400 Dapps
are running on the Ethereum network alone. More work
will be required to bring these technologies to a scale that
competes with leading enterprises, yet the concepts have
thoroughly been proven and are receiving attention from
developers, firms, and investors across the globe. These
projects have become fundamental in the development of
these decentralized applications and will be critical layers
in the development stack within Web 3.0.
3. Decentralized Data Protocols
Methods for data exchange and management are essen-
tial for the functionality of applications on the web. In Web
2.0, data is stored in centralized servers referenced by vari-
ous applications. In Web 2.0 there is also no literal instance
of a ”user” of the web. You as a person do not exist as a
single entity, but rather as a set of users for the various ap-
plications you engage with. For instance, your identity is
known by Uber and stored as data in their servers, but that
information is generally not accessible to other applications
such as Google. However, in Web 3.0 it is possible to act
as one identity across applications and across channels of
communication.
Additionally, in Web 2.0 communication is generally
open and traceable. In the current web environment users
trade ownership of their data in exchange for access to the
platforms and services they use. While your information
is generally kept private, it is still stored and owned in a
centralized server which is susceptible to security breaches,
manipulation, and government intervention. In Web 3.0 the
goal is to add more privacy and security to users communi-
cation and data. Various blockchain projects are currently
working to provide these exact features as part of the Web
3.0 environment.
3.1. Decentralized File Storage
Many blockchain projects are working to provide a de-
centralized alternative to file storage. This component of
the Web 3.0 stack is essential to realizing truly decentral-
ized applications without it user data still remains stored in
servers operated by centralized parties.
The Inter-Planetary File System, or IPFS, is one
project that has made it easier for decentralized file stor-
age to exist. IPFS functions by storing hashed versions of
files on nodes throughout the network. In the white paper
proposal, the technology is described as a system comprised
of ”a distributed hashtable, an incentivized block exchange,
and a self-certifying namespace. IPFS has no single point
of failure, and nodes do not need to trust each other.” [12].
Technically the system is an implementation of a Merkle
Dag, which is a data structure that links objects using cryp-
tographic hashes. (Further reading 4).
IPFS Vs. HTTP
5
IPFS is an extension of similar distributed technologies
that have already proven to be effective such as BitTorrent
and the Git versioning system. The network can be viewed
as a graph of IPFS objects, each with its own hash acting
as an index. Edges on the graph are also labeled and the
nodes hold file data or portions of file data internally. IPFS
is especially useful because it protects against file corrup-
tion (because copies of data are made) and there is no single
point of attack because information is distributed. [13]
FileCoin is another project created by the IPFS founders
to incentivize usage of the system. FileCoin is building a
marketplace for data storage that is distributed across the
world. FileCoin uses the IPFS network to build this mar-
ketplace, and storage is traded as a commodity (unlike its
traditional role as a service). The FileCoin network al-
lows individuals to participate in cloud storage which al-
lows the system to scale extremely economically. Within
the FileCoin marketplace there are two markets, hosting
and retrieval which individuals can participate in. FileCoin
has proposed a new consensus algorithm, Proof-of-Storage,
which relies on two sub-methods called Proof-of-Spacetime
and Proof-of-Replication, both of which are currently being
researched for proof of functionality. [14]
These networks are live and currently being used by
many Dapps. However, more work is required to make
these systems reliable and efficient. Despite this, there
are still many benefits to using systems like these includ-
ing added decentralization and cost reduction. For exam-
ple, there is another file storage project called Storj which
claims to provide storage at a price $0.015 GB/Month
whereas Amazon Web Services rates are closer to $0.023
GB/Month.
3.2. Identity Management
Identity management is an important component of Web
3.0 that allows users to control and protect their personal
data. Currently on the web there is no secure and efficient
way to identify yourself when using applications. Your user
data is stored on centralized servers and you need to create
new accounts for every application you use. Governments
attempt to assign identifiers such as Social Security and doc-
uments of citizenship, yet these do not apply within the web
environment. Multiple project teams are using blockchain
to solve these issues.
Uport is a project working to provide ”self-sovereign
identity management” for services on the Ethereum
blockchain as well as traditional centralized services like
email and banking [15] Uport is developing a suite of so-
lutions that will be used by both end-users and developers.
They provide a ”self-sovereign” Wallet which allows users
to authenticate transactions and manage personal informa-
tion from a mobile-app on iOS and Android. With this wal-
let, users can create an identity on the Ethereum network
and use it to authenticate themselves across all applications
that have integrated the Uport protocol. Uport also pro-
vides a service called ”connect” which allows developers
to integrate the Uport protocol into decentralized applica-
tions. Dunphy and Petitcolas performed an analysis into the
technical design of identity management protocols. They
asserted that some aspects of the system could potentially
become too centralized, and that some complexities of key
management could be difficult for users. However, the mo-
bile application provides a consistent experience for users
that effectively reduces the need for multiple accounts when
using the web. [16]
Uport Application Design
Civic is another project working to provide a more de-
centralized version of identity management. Civic is specif-
ically aiming to create an identity management system that
is compliant with government regulations around the world.
To do this they are building a network of identity requestors
and validators to streamline the process of identity verifica-
tion. When a user engages with a service on the Civic net-
work they provide some form of personal identity informa-
tion. A validator performs standard validation procedures
to ensure that the user has provided truthful information.
Once information is verified a hashed version is stored in
the Civic blockchain. That validator can then sell that same
information to requestors in need of the information only af-
ter a user provides consent. This system design allows user
data to be stored in a secure, decentralized format, but still
widely available to all services and applications to which
which the user grants access. This eliminates the need for
users to enter personal information multiple times and cre-
ates one sense of identity on the Civic blockchain.
Identity management will be crucial to the user-
experience within the Web 3.0 environment. More work
will be required however to ensure that these systems are
secure and to grow the networks to a critical-mass size such
that they become useful.
6
Civic Data marketplace
3.3. Privacy in Communication
The vision for Web 3.0 includes an aspect of control-
lable privacy for users. Absolute privacy would require that
no adversary, such as corporations or government, is able to
view an individuals transaction history. This type of privacy
applies to things such as communication or payments, but
also extends to other types of engagements such as elections
and location based services. There are multiple projects
working to add this layer of privacy into blockchain net-
works.
Monero is one project that has built a system for anony-
mous payments. Monero currently utilizes a system built
around ”Ring Confident Transactions” which is a combina-
tion of recently developed cryptographic tools. On a high
level these transactions provide security by first relaying a
message to a one-time anonymous address that is generated
by the network itself. Additionally, when sending funds be-
tween addresses, ring signatures are used to break messages
into smaller components that are invisible to both the sender
and receiver, but still verifiable to the network as a whole.
[17] They are currently testing a concept of ”BulletProofs”,
which are implementations of zero-knowledge proofs that
are quick to execute and lightweight within the network. So
far this has led to a reduction in fees up to 77% making it
one of the most inexpensive options for anonymous pay-
ment transactions. [17]
Zcash is another project that has built an anonymous
payment platform using blockchain technology. Zcash uti-
lizes a recent advancement in cryptography called zero-
knowledge Succinct Non-Interactive Arguments of Knowl-
edge (zk-SNARKs). Essentially these methods allow a user
to send information over an open channel and prove that the
information is true without having to broadcast the infor-
mation itself. Using this method users can ensure that no
other entities can get access to the information of a trans-
action they make or any transactions made in the past. [18]
However, the Zcash network does not make transaction pri-
vate by default. As a result a majority of the network is
public and traceable by third-party entities. Additionally,
the Zcash project is not decentralized. It it run by a private
company and sponsored by corporations and government
entities such as Darpa.
Aside from private payment technology research is being
conducted to create decentralized e-voting systems. Sev-
eral frameworks have been proposed such as the system
designed by Hsiao, Tso and Wu in their proposal ”Decen-
tralized E-Voting Systems Based on the blockchain Tech-
nology”. [19] They provide a model for a system that is
decentralized that also protects voter identities and main-
tains data privacy during transmission. Implementations of
models like these will be important for creating more ad-
vanced decentralized organizations within the Web 3.0 en-
vironment.
3.4. Implications
These projects are all helping to create more private and
efficient methods for data exchange within decentralized ar-
chitectures. The cryptographic techniques being used have
resulted in new paradigms for data storage and retrieval, and
transaction privacy (specifically in payments). These tech-
nologies are currently integrated into many Dapps and are
used within some centralized applications as well. How-
ever, more research must be conducted to ensure that these
technologies remain truly decentralized and confidently se-
cure.
4. Blockchain Scalability
Many of these proposed decentralized architectures are
powerful in theory, but face many challenges regarding scal-
ability and functionality. In order for individuals, corpo-
rations, and even governments to switch to decentralized
architectures, performance must be comparable to the sys-
tems we currently use. The client-server models we use
in the majority of applications today can process thou-
sands of transactions per second, and feel relatively instan-
taneous to users. To achieve this level of performance many
blockchain projects are working to increase the speed of the
blockchain networks already in place.
4.1. State Channels and the Raiden Network
State channels are one solution to the slow transaction
speeds on traditional blockchains. A general requirement
for a blockchain network is shared consensus. This implies
that every node in the network needs to constantly be up-
dated with changes to the global ledger. Yet with the cur-
rent state of bandwidth and CPU hardware there is a small
upper-limit on the amount of transactions that can be pro-
cessed per second. State channels solve this problem by
7
creating smaller versions of a global ledger which act as a
communication private channel between two parties. Trans-
actions within these side chains can occur without knowl-
edge of the global ledger, and upon closing, send informa-
tion to update the state of the global ledger. [20]
The Raiden Network is a project working to provide
state channel functionality to the Ethereum blockchain.
Specifically, the project is working to facilitate off-chain
payments. The Raiden Network is building a set of pro-
tocols along with an API developers can use to integrate the
state-channel functionality into their applications. When a
state channel is opened a smart contract is created with a
set of rules and balances that dictate which actions can be
taken by either party included in the channel. This ensures
that the ”double-spending” problem remains solved, and no
party can perform invalid actions. [21]
Example Dapp Architecture With Raiden Network
From a performance standpoint there are both posi-
tive and negative aspects of the Raiden Network design.
First, because the network runs on top of the Ethereum
blockchain, the amount of channels that can be opened
remains limited proportional to the performance of the
Ethereum blockchain, creating a bottleneck in performance.
From a users perspective the current implementation pro-
vides near instant transaction speed which is optimal. The
project is open sourced and currently in progress, and a ba-
sic implementation has been achieved.
4.2. Side Chains - Plasma Protocol
Side chains are similar to state channel, except more
robust in several ways. Side chains can be viewed as
blockchains within blockchains, which form a tree of
chains. The motivation behind side chains is to have a main
blockchain perform as little work as possible, while out-
sourcing the majority of computation to child chains that
are only given parts of the global state relevant to that par-
ticular child chain. [22]
Plasma is a project being developed by many mem-
bers of the Ethereum community, including Vitalik Buterin.
Plasma is an implementation of a side chain architecture
that will hopefully be used to increase the performance and
scalability of the Ethereum network itself. Plasma has a
few features that are essential to its functionality. In the
original Plasma proposal Vitalik defines Plasma as follows:
”Plasma is a proposed framework for incentivized and en-
forced execution of smart contracts which is scalable to a
significant amount of state updates per second (potentially
billions) enabling the blockchain to be able to represent a
significant amount of decentralized financial applications
worldwide. These smart contracts are incentivized to con-
tinue operation autonomously via network transaction fees,
which is ultimately reliant upon the underlying blockchain
(e.g. Ethereum) to enforce transactional state transitions.”
[23] A benefit of the Plasma design is that many child chains
can co-exist, all with different purposes and business logic
but one global reference of state.
Plasma Multi-chain Example
As described in the proposal, Plasma arranges child
chains in a tree-format in such a way where computation ef-
ficiency is maximized and computation cost is minimized.
Additionally, a MapReduced computing framework is used
to handle state transitions within the chain in order to main-
tain a valid state of consensus. See Further Reading 6 for
a more detailed explanation of the Plasma network. Plasma
is currently being developed and there are versions of the
prototype available for use.
4.3. Alternatives Scaling Techniques
There are additional proposed solutions that have been
gaining traction in the scalability space as well. TruBit
is one project that is working to provide an off-chain vir-
tual machine which can handle heavy computational loads.
Within the TruBit system there is a ”marketplace for com-
putation”. A smart contract is created on the main chain,
but the computation is picked up by a client within the mar-
ketplace and conducted within some new virtual machine.
An incentive structure is built into the marketplace so that
solvers are incentivized to perform computations and ap-
8
plications entities are incentivized to move their computa-
tion onto the TruBit VM. [24] TruBit could potentially work
synchronously with Plasma, as well as additional scaling
networks like Raiden.
Another alternative was briefly mentioned in section
2 of this report called sharding. Diamond Drops is a
project working to implement sharding within the Ethereum
blockchain and is set to release phase 1 of the solution
in July 2018. The implementation is written in Rust and
has several phases within the roadmap. The goal is to di-
vide computational resources evenly amongst many child
nodes which will enhance the performance of the Ethereum
blockchain.
4.4. Future Work Required
Evidently there is a lot of research and further develop-
ment required to fully implement these scaling solutions.
Within each of these projects bottlenecks still exist related
to the functionality of the parent chain, which in most cases
is the Ethereum blockchain. For both Raiden and Plasma,
prototypes will need to be tested on the live network once
the developers have made enough progress. Additionally,
developers will need to decide on what protocols to adopt
and which to ignore. For many of these scaling method ap-
plications need to be designed specifically within the con-
straints of the protocol.
4.5. Implications
Scalability is one of the most important requirements for
applications to succeed within the Web 3.0 environment.
Decentralized concepts provide inherent value to users, but
the value is lost if applications cant handle the transac-
tion loads that occur in current system. However, if im-
plemented correctly these scalability methods could dras-
tically improve the performance of decentralized applica-
tions, which would make the transition to a Web 3.0 en-
vironment easier and more appealing to corporations, gov-
ernments, and other organizations that rely on peer-to-peer
networks.
5. Interoperability
The last sub-sector we will focus on is interoperability
between different blockchains. Within the entire blockchain
space there are thousands of projects, many of which have
their own blockchains that function independently of other
chains. Within these chains are many Dapps that use dif-
ferent tokens and protocols for transactions. This presents
problems if we want applications to be able to communicate
with each other within the Web 3.0 landscape. As a result
many blockchain projects are working to create methods
that allow different blockchain networks to communicate
and share data efficiently.
5.1. Decentralized Token Exchanges tween blockchains, and the Aion protocol which is a set
of rules new blockchains must follow in order to partici-
Decentralized exchanges (DEX) are used in the
pate within the Aion network. Within the Aion blockchain
blockchain space to convert one crypto currency to another.
will be a virtual machine called the Aion Virtual Machine
With so many application using their own unique tokens it is
(AVM) which will abstract logic away from the blockchain
important that we have efficient methods for currency con-
itself and allow for more powerful inter-chain logic to be
version. DEXs help blockchains interoperate by facilitating
applied, which is described in further detail in the Aion
the currency conversion in a way that is decentralized and
whitepaper. [27]
free of interference from third-parties. Multiple projects are
Aion is designed to work on top of existing consen-
working to implement efficient protocols for currency ex-
sus engines such as Ethereum and will help enable cross-
change.
platform Dapps to exist. A unique feature of the Aion net-
The 0x Project is a protocol that has been developed for work is that it will allow both private and public chains to
ERC20 token exchange. (See further reading 6 for an ex- interact. This is especially useful for enterprises who need
planation on ERC20 tokens). They have built a developer- to store information on a private ledger but still want to en-
friendly system that can be integrated into an Dapp that re- gage in public networks like Ethereum.
quires exchange functionality. 0x computes transaction off-
Cosmos is another project to establish interoperability
chain as described in the previous section to increase trans-
between public blockchains. Cosmos is attempting to solve
action speed and lower transaction cost within the Ethereum
the interoperability problem in a similar way to Aion, ex-
blockchain. After orders are executed the settlement returns
cept with less rigid requirements for new blockchains that
to the Ethereum blockchain. This allows Dapps to instantly
want to integrate with the network. The network operates
execute orders and provide immediate resolution to user re-
with a main blockchain called the Tendermint Core. This
quests. The 0x whitepaper outlines a network of relayers
core is Byzantine-Fault-Tolerant and acts as its own con-
who able to broadcast orders and collect fees when they fa-
sensus engine. [29] The consensus system will use a set of
cilitate a trade. [25] The project is open-sourced and cur-
validators, capped at 300, which will perform large amounts
rently being used by other notable blockchain projects like
of processing for the ”block validating” within the Tender-
dEX, Maker, district0x and more.
mint core. The whitepaper explains that this will produce
5.2. Multi-Channel Communication high levels of efficiency even under adversarial conditions:
”Notably, the performance of well over a thousand trans-
Aside from currency exchange, communication proto- actions per second is maintained even in harsh adversarial
cols must exist so that different blockchains can commu- conditions, with validators crashing or broadcasting mali-
nicate with one another. Several techniques have been pro- ciously crafted votes”. [30]
posed to do this, each with certain upsides and downsides.

Aion Network Linked to Ethereum Network Cosmos Performance related to Block Size

Aion is one project working to add cross-channel func- Cosmos is working closely with Ethereum and hoping
tionality to the block ecosystem. There will be two main that developers will use Cosmos as an interoperability layer
components to the Aion network - the Aion 3rd generation on top of the Ethereum EVM when creating Dapps. Cosmos
blockchain which will act as the connecting network be- works particularly well with Ethereum because it is opti-

9
mized for PoS consensus, which Ethereum will be moving
to soon. [28]
A final big player in the interoperability space is Polka-
dot. Polkadot is working to build a multi-chain framework
and protocol which will allow for cross-chain communica-
tion. Polkadot is unique is that is places an emphasis on to-
ken holders of their native currency DOT. Holders are given
the power to vote and make decisions about transactions on
the network. Polkadot is focused on the governance aspect
of scalability and is working to build governance methods
directly into the protocol. [31] However, in 2017 over $176
million in funds were potentially locked forever due to a
vulnerability in one of their multisig wallets, which will
make it harder for the project to attract enterprise attention.
5.3. Future Work and Implications
As we progress with Web 3.0 application development,
blockchain interoperability will be one of the most impor-
tant problems to solve. Many of these technologies have
only just begun to release prototypes and tested implemen-
tations are still months and years away. Aion has a roadmap
that spans from 2018-2020, and they are the most funded
project in the scalability space with backing from their par-
ent company Nuco, and expert in the enterprise blockchain
space. [28] They are also a founding member of the Enter-
prise Ethereum Alliance which is a consortium of high pro-
file businesses interested in blockchain. With this proven
development team and financial resources, they are in a
good position to exceed, but more development will need
to be completed before the Dapps can successfully integrate
into the network.
Additional research must be conducted on governance
models in general in order to ensure that these networks
succeed at larger scales. Polkadot specifically builds dis-
tributed governance into the network, yet it is unsure if vul-
nerabilities will arise during implementation. [26] Once we
have established effective interoperability methods Dapps
within the Web 3.0 environment will be able to easily com-
municate and exchange data. This will create opportunities
to build more robust Dapps that are highly capable and more
innovative.
6. Analysis and Summary
This report has provided a survey on many blockchain
projects working to build the infrastructure behind a decen-
tralized web. These projects are building new protocols and
changing the paradigms of the web from the ground up. In
many of these sectors, especially scalability and interoper-
ability, more development will be required before the net-
works and proven to be efficient and secure. Despite the
need for more research and development the progress made
within the blockchain space is staggering and increasing in
speed. It is projected that the crypto currency market cap
10
will reach $1 Trillion dollars before the end of 2018 and
continue to increase afterwards. Within tech in general ICO
funding has almost exceeded angel and seed investing as
well.
ICO Funding Vs. Traditional Methods
Additionally, the majority of these projects are making a
dedicated effort to provide open-sourced technologies that
are as decentralized as possible. This approach to software
development will be crucial in the implementation of Web
3.0 layers, and many rely on decentralized architectures in
order to be truly useful. Aside from the 4 sub-sectors exam-
ined in this report there are many other sub-sectors working
to solve entirely different problems. Some are focused con-
tent marketplaces, content monetization, social uses, and
prediction markets for example. Additionally, an entire new
user experience will need to be designed and iterated on in
order to make Web 3.0 user-friendly. In this new landscape
users will need to keep track of private keys, potentially use
new browsers, and understand general concepts of decen-
tralized peer-to-peer transactions. Software developers will
have to work closely with design experts in order to provide
an experience that is enjoyable for users.
6.1. Related Work
This report can be used alongside additional survey
papers to get an understanding of the current state of
blockchain in 2018. See further reading 7 for the Ger-
man Institute for Developments survey on financial uses
of blockchain technology. See further reading 8 for a de-
tailed industry survey and primer on blockchain technol-
ogy produced by Credit Suisse. Appendix A provides a
graphic with information on the major blockchain consor-
tia building solutions right now. Appendix B provides an-
other graphic attempting to organize some of the major
blockchain projects into sub-sectors.
6.2. Concluding Remarks
It is evident that major advancements are being made
within the blockchain space. However, as new paradigms
are being constructed and new architectures are being built
we must be careful in our design and methods. Many of
these projects claim to provide decentralized services that
are controlled by no organization and no set of individuals.
However, blockchain is a complicated technology, and there
is a question of whether these systems are truly decentral-
ized when the logic built into the systems is constructed by
only small groups of developers with their individual aims
and goals. Blockchain technology and Web 3.0 has the ca-
pability to improve many aspects of society, but we must be
responsible and inclusive when implementing these new so-
lutions. Using these technologies together will soon allow
us to build a more transparent and efficient web architecture
that will benefit individuals, corporations, governments and
more in future years.

7. Further Reading
1. https://steemit.
com/neo/@basiccrypto/
neo-s-consensus-protocol-how-delegated-byzantine-fault-tolerance-works

2. https://github.com/ethereum/EIPs/
blob/master/EIPS/eip-1011.md

3. https://github.com/ethereum/
wiki/wiki/Sharding-introduction-R&
D-compendium

4. https://medium.com/@ConsenSys/
an-introduction-to-ipfs-9bba4860abd0

5. https://www.hlengage.
com/_uploads/downloads/
5425GuidetoblockchainV9FORWEB.pdf

6. https://cointelegraph.com/
explained/erc-20-tokens-explained

7. https://www.die-gdi.de/uploads/
media/DP_2.2018.pdf

8. https://research-doc.credit-suisse.
com/docView?language=ENG&format=
PDF&sourceid=csplusresearchcp&
document_id=1080109971&serialid=
pTkp8RFIoVyHegdqM8EllLNi1z%
2Fk8mInqoBSQ5KDZG4%3D

11
8. References
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Technology, 1 Dec. 2017.
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[3] Buterin, Vitalik. The Meaning of Decentralization Vitalik Buterin Medium.Medium, Augmenting Humanity, 6 Feb.
2017, medium.com/@VitalikButerin/the-meaning-of-decentralization-a0c92b76a274.
[4] Wood, Gavin. Apps: What Web 3.0 Looks Like.Gavinwood.com, 17 Apr. 2014, gavwood.com/dappsweb3.html.
[5] Ethereum Foundation. Ethereum/Wiki.GitHub, 3 May 2018, github.com/ethereum/wiki/wiki/White-Paper.
[6] Wilcke, Jeffrey. Optimising the Ethereum Virtual Machine Jeffrey Wilcke Medium.Medium, Augmenting Humanity,
18 May 2016, medium.com/@jeff.ethereum/optimising-the-ethereum-virtual-machine-58457e61ca15.
[7] Ethereum Group. Ethereum/Wiki.GitHub, 25 Mar. 2018,
github.com/ethereum/wiki/wiki/Ethereum-Development-Tutorial.
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[9] Anderson, Ankar. Simple Chart of How Smart Contract and Web Tools Work Together on Ethereum - Steemit.Medium,
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[10] Bester, Nadja. NEO vs Ethereum.Invest In Blockchain, 3 May 2018, www.investinblockchain.com/neo-vs-ethereum/.
[11] Ethereum Community. Research Problems in Ethereum.GitHub, 8 May 2018,
github.com/ethereum/wiki/wiki/Problems.
[12] Ethereum Community. Sharding Introduction.GitHub, 8 May 2018,
github.com/ethereum/wiki/wiki/Sharding-introduction-RD-compendium.
[13] Benet, Juan. IPFS - Content Addressed, Versioned, P2P File System.IPFS
[14] Protocol Labs. Filecoin: A Decentralized Storage Network.FileCoin, 14 Aug. 2017, filecoin.io/filecoin.pdf.
[15] ConsenSys Group. Protocols — UPort Developer Portal.Uport, ConsenSys Group , Feb. 2018,
developer.uport.me/protocol/.
[16] Dunphy, Paul. A First Look at Identity Management Schemes on the Blockchain*.Cornell University Library, VASCO
Data Security, arxiv.org/pdf/1801.03294.pdf.
[17] Bardinell, John. Monero 2018 Roadmap: The Future of Private Digital Currency Looks Bright.Invest In Blockchain, 3
Apr. 2018, www.investinblockchain.com/monero-2018-roadmap/.
[18] Ben-Sasson, Eli, and Alessandro Chiesa. Zerocash: Decentralized Anonymous Payments from Bitcoin.ZeroCash
Project, 18 May 2014.
[19] Hsiao JH., Tso R., Chen CM., Wu ME. (2018) Decentralized E-Voting Systems Based on the Blockchain Technology.
In: Park J., Loia V., Yi G., Sung Y. (eds) Advances in Computer Science and Ubiquitous Computing. CUTE 2017, CSA
2017. Lecture Notes in Electrical Engineering, vol 474. Springer, Singapore
[20] Coleman, Jeff. State Channels - an Explanation.Jeff Coleman, Jeff Coleman, 18 Nov. 2015,
www.jeffcoleman.ca/state-channels/.
[21] Raidien Community. Raiden Specification.Raiden Specification - Raiden Network 0.3.0 Documentation, Feb. 2018,
raiden-network.readthedocs.io.
[22] Akentiev, Anthony. Plasma in 10 Minutes Chain.Cloud Company Blog Medium.Medium, Augmenting Humanity, 10
Aug. 2017, medium.com/chain-cloud-company-blog/plasma-in-10-minutes-c856da94e339.
[23] Poon, Josep, and Vitalik Buterin. Plasma: Scalable Autonomous Smart Contracts. 11 Aug. 2017.

12
[24] Teutsch, Jason. A Scalable Verification Solution for Blockchains. 16 Nov. 2017,
people.cs.uchicago.edu/ teutsch/papers/truebit.pdf.

[25] Warren, Will. 0x: An Open Protocol for Decentralized Exchange on the Ethereum Blockchain.0x Project, 0x
Community, 21 Feb. 2017, 0xproject.com/wikiBuild-A-Relayer.

[26] Tual, Stephan. Web 3.0 RevisitedŁ-ŁPart Two: Introduction to Polkadot: What It Is, What It Ain’t.Medium, 9 July
2017, blog.stephantual.com/web-three-revisited-part-two-introduction-to-polkadot-what-it-is-what-it-aint-657782051d34.

[27] Spoke, Mathew, and Nuco Development Team. Aion: Enabling the Decentralized Internet.Aion Network,
aion.network/media/en-aion-network-technical-introduction.pdf.

[28] Ethereum’s AI Authors. The Coming Network of Blockchains - Aion, Cosmos, and Others.Medium, Augmenting
Humanity, 12 Nov. 2017,
medium.com/@EthereumAI/the-coming-network-of-blockchains-aion-cosmos-and-others-2b94f034e89f.

[29] Blockgeeks. What Is Cosmos Blockchain ? Most Comprehensive Guide.Blockgeeks, Apr. 2018,
blockgeeks.com/guides/what-is-cosmos-blockchain.

[30] Kwon , Jae, and Ethan Buchman. Cosmos White Paper.Internet of Blockchains - Cosmos Network, Feb. 2018,
cosmos.network/resources/whitepaper.

[31] O’Leary, Rachel. Polkadot’s Plan for Governing a Blockchain of Blockchains.CoinDesk, CoinDesk, 22 Mar. 2018,
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[32] Brennan, Charles, et al. Cryptocurrencies Are Only the Beginning.Credit Suisse Research, Credit Suisse, 11 Jan. 2018,
research-doc.credit-suisse.com/docView.

9. Appendix
A. Blockchain Consortia

13
B. Blockchain Project Ecosystem

14