The emergence of any disruptive new technology is often followed by the creation of narratives that aim to place something novel and unfamiliar in a framework that the general public can not only understand but also appreciate.
In the case of Web3, narratives play a critical role in helping people deconstruct their preconceived notions about the nature of money and value while embracing a new understanding of these concepts that are supported by open, permissionless, and decentralized technologies rather than blind faith in top-down institutions.
Within the broader narrative of Web3 are several sub narratives (or themes) that have emerged over the past few years, propelled by famous investors, entrepreneurs, and thought leaders in the industry, including Raoul Pal of Real Vision Finance and Global Macro Investors (GMI).
These themes include the idea of crypto’s future being multi-chain, enabling seamless interoperability between chains, developing a UX layer to facilitate ease of use of Web3 applications, and an Identity layer to pin a user on-chain activities to a single digital identity that can be used to build an online reputation, access credit and more.
In a recent GMI publication, Raoul describes how these themes are all centered around the harnessing of blockchain technology to facilitate more transparent, trustless, and efficient exchanges of information and value across multiple chains using a common framework (or ‘layer’) to facilitate peer to peer multi-chain communication.
The Accumulate network is at the forefront of establishing a decentralized communication and audit layer for all individuals, entities, and blockchains to transact with each other, enabling the creation of a truly global marketplace built on open and permissionless technology.
We highlight some of the features we are developing and how they align with the themes promoted by prominent players in the Web3 space.
The benefits of open and permissionless technology include the ability for anyone to build their own vision for a decentralized future. This includes launching new blockchain networks, new decentralized applications (or DApps), and new tokens that accrue value and incentivize user adoption of these platforms.
Today, Web3 represents one of the last examples of an unrestrained and truly free market. With the help of nothing more than a few lines of code and a passionate developer community, new blockchain networks are able to emerge and engage in healthy competition and collaboration with existing chains, much to the benefit of the millions of users and investors who are free to choose which networks to store, transfer or trade their funds.
In the past year alone we have seen a significant increase in new layer 1 blockchains like Solana, Binance Smart Chain, Fantom, and Avalanche that seek to challenge Ethereum’s dominance.
Each proclaims to offer a more scalable network that can support faster transaction speeds while making limited compromises to decentralization and security.
A multi-chain future provides consumers with a choice of different blockchains to choose from based on their preferences for speed, security, or decentralization. Users can send funds to Solana to make fast and low-cost trades while placing higher value assets on the Ethereum network because it is more decentralized and therefore more secure.
The Accumulate Network embraces the multi-chain future by enabling all of these networks to converge on top of a communication and audit layer where individuals and entities are represented as digital identifiers.
Lack of blockchain-agnostic interoperability solutions remains one of the biggest hindrances to the global adoption of web3. Imagine each blockchain network as a city and the bridges between cities serving as an analogy for the bridges we use to transfer tokens such as Wormhole or the Inter-Blockchain Communication Protocol (IBC).
Now imagine if each bridge to a new city required a different car in order to cross, or if certain cities required moving through multiple bridges as opposed to a direct path to your destination.
This example broadly describes the current state of blockchain interoperability, connected in certain areas yet still too fragmented to enable users at the enterprise and institutional level to feel comfortable moving billions of dollars on-chain.
Accumulate’s contribution to the Web3 space comes in the form of the Accumulate network and Accumulate digital identifiers or ADIs.
The Accumulate Network is a layer 2, proof of stake blockchain that serves as the de-facto communication and audit layer between all blockchains, enabling the seamless transfer of tokens or other kinds of digital assets between Accumulate Digital Identifiers (ADIs) across different chains regardless of their consensus mechanism
ADIs are human-readable addresses similar to website URLs that are chosen by individuals or assigned by organizations to represent their presence on the blockchain.
Individuals or entities that have wallet addresses on Layer 1 and Layer 2 networks can use ADIs to represent themselves on the Accumulate network.
At the same time, companies can connect to the Accumulate network directly and set up ADIs to represent themselves along with different aspects of their organization as sub-identities underneath a single ADI. This can include specific departments, individual roles, or even corporate assets.
Creating a Single UX and Identity Layer for Web3
As Rauol Pal points out in his GMI piece, in the future, consumers of decentralized applications will no longer need to be concerned about what blockchain network they are currently using.
In a world where blockchain interoperability is perfected, the act of transferring tokens across chains will become as seamless as sending an email from Yahoo Mail to Gmail to Outlook. While the front-facing applications look different, the underlying infrastructure for each email provider is unknown to the vast majority of users.
This is what the future could look like under the ADI system. Users represented as ADI’s would be able to migrate tokens from Dapps on Solana to Dapps on Avalanche, Ethereum, or other networks all underneath the UX and identity layer of the Accumulate networks.
For corporate entities, ADIs would provide a common framework for the execution of smart contracts between other regulated entities chain, as well as the seamless and efficient audits of transactions between ADIs without the need to investigate transaction data on individual chains.
Accumulate allows blockchain networks to outsource execution functions to a scalability-optimized and identity-based network. At the same time, Accumulate leverages the security of decentralization-optimized blockchains like Bitcoin and Ethereum to backup transaction data between ADIs in order to ensure that the data remains tamper-proof and censorship-resistant.
Identity as a Core Infrastructure of Web3
While other interoperability solutions like Layer Zero and Thorchain seek to reduce the friction of sending messages and tokens between chains, Accumulate is the only solution that achieves this through a robust and customizable identity layer.
We view digital identity as a core piece of Web3 infrastructure that provides legitimacy to the concept of property rights in the digital world.
Without digital identity, property rights of token assets could only be enforced through the protocol that dictates how pseudonymous wallet addresses interact. In the event that these protocols fail to prevent theft or fraud, a digital identity system can serve as a backstop by using reputation or conducting on-chain audits on wallets addresses owned by a single ADI as a means to catch bad actors or prevent them from using certain Dapps or protocols.
Without a cross-chain identity system, networks are forced to string together cross-chain interoperability solutions that only work for specific address formats and require adjustments when dealing with a new address from a new chain.
For corporations and governments that operate on a global scale, the inability to view the web3 landscape as one whole instead of multiple-segmented parts presents a huge problem in terms of usability, transparency, and regulatory compliance.
This is why we strongly believe that ADIs can serve as the bridge that not only connects blockchain networks to each other, but also connects the traditional economy to the Web3 space under a framework that enables open, permissionless, and censorship-resistant transactions while ensuring that the safety, compliance and usability needs of corporations, governments, and other institutions are met.
Ultimately, Accumulate is at the center of multiple converging narratives in the web3 space.
These narratives and themes are providing web2 users with a framework of understanding that allows them to appreciate concepts such as decentralization, censorship resistance, permissionless-ness, and digital property rights.
Just as disruptive new technologies rely on narratives to communicate their value to the general public, these narratives naturally lead to expectations that the new technologies must meet in order to convert user interest into user adoption.
Accumulate Network aims to become the solution that achieves this conversion by realizing the promise of an interconnected multi-chain future for Web3 that will propel free trade and the free flow of capital between the digital realm and the traditional economy to new heights.