Web3 Protocol Design Guide

In the cryptocurrency field, protocol design is crucial for the success of a project. Recently, Eddy Lazzarin, the CTO of a16z crypto, shared a course on "protocol design," providing valuable insights and inspiration for entrepreneurs. This article summarizes the core content of the course.

The Inherent Laws of Protocol Evolution

The Internet is a network composed of various protocols that facilitate complex group behaviors. The strength of Internet protocols lies in their ability to not only connect interactions between people but also to interact with software.

The evolution of the protocol has gone through three stages: Web1, Web2, and Web3.

• Web1: Decentralized & No Clear Economic Model
• Web2: Centralized & Clear Economic Model
• Web3: Decentralized & Explicit Economic Model

Although Web1 protocol is decentralized, it lacks a clear economic model, making it difficult to sustain development. Web2 addressed the limitations of functionality but moved towards centralization. Web3, on the other hand, utilizes encryption and blockchain technology to introduce a clear economic model while maintaining decentralization.

Web3 Protocol Design Case

Taking "Unstable Confusion" as an example, several aspects need to be considered when designing a Web3 protocol:

1. Verification mechanism: Ensure the accuracy of the inference results.
2. Pricing Strategy: How to Reasonably Price Services
3. Storage Mechanism: How to Securely Store Data
4. Task Allocation Strategy: How to Fairly and Efficiently Allocate Tasks

Key Points of Decentralized Protocol Design

1. Be cautious of the 7 key design elements that may lead to centralization.
2. Reduce switching costs and promote interoperability
3. Create a truly decentralized system using Web3 technology
4. Conduct in-depth research in all aspects and choose the best solution.

When designing decentralized systems, it is necessary to comprehensively consider these points to build a protocol with long-term robustness and decentralized characteristics. Web3 protocols provide a broader space for innovation through decentralization and clear economic models.