How to ensure the high quality of the processes of working with crypto and become a good specialist in this field?
"Cryptocurrency" and "blockchain" are words that arouse the interest of many. In 2023 performed twice as many transactions with cryptocurrency as in 2022. The number of services that accept payments in this way increased by 15-20%. Engineers who specialize in blockchain are working to make it safe and convenient to use digital currencies. Danila Sudbin, Staff Software Engineer at MoneyCat Financing Inc., explains how to ensure a high quality of work processes in the Web3 industry and become a good specialist in this field.
Danila, how would you describe Web3 in a few sentences?
— Web3 is the next round of technologies. It became possible thanks to the increased capacity of computing systems. Basically, this concept boils down to the decentralization of finance—that is, in fact, to the creation of financial institutions that do not depend on any regulation. In other words, it is a transition to an anonymous horizontal management system.
What are the trends in the market and in which direction are the projects developing?
— At the moment, however, there is a tendency to move away from decentralization towards CBDC (Central bank digital currency). These are digital currencies of central banks of countries. In addition to the possibility of centralized management, they help to manage tax collection and track transactions of network users more efficiently.
As an example, let's compare the processes in a regular bank and a stablecoin system, such as USDT. In conventional fintech, there is a concept of partial reservation of funds. If, in the presence of $100, the bank provides funds for $1000, this means it has a partial reserve of 10% of the total money supply. However, in such financial systems as USDT, 100% collateral is required because this system is still new in circulation.
Another trend is the development of cross-chain technologies. Cross-chain technologies allow data and assets to be transferred between different blockchain networks. This opens up new opportunities for the integration of various blockchain projects and the creation of larger and more complex applications.
Under your technical guidance as a Staff Software Engineer, MoneyCat Financing Inc. created an innovative service your-token.com. Can you explain, what are your-token.com and decentralized autonomous organizations? In which way can they come in handy to an ordinary citizen who wants to invest money in something?
— Decentralized autonomous organizations are communities managed by token owners. In your-token.com you can invest money, but the decision to issue a loan/investment will be made through decentralized voting. For example in the usual DAO, you, me, and a hundred readers of your publication gather to buy a token and thereby join such a community. I came up with an idea: "I think it would be interesting to invest in company N. What do you think?" You and a hundred other participants evaluate my idea and vote whether you agree or not. If the majority votes positively, we invest all our common funds in company N. At the same time, each participant has equal weight in voting, which reduces the risk of unfair manipulation and collusion. Plus, of course, there is less bureaucracy, more flexibility, and a higher speed. Funds can be withdrawn at any time without having to go through complex procedures.
What is the peculiarity of blockchain development when working with investment DAOs?
— The peculiarity of investing through decentralized autonomous organizations is that thanks to the use of cryptography and smart contracts, investors' funds are stored on the blockchain and are protected from fraud and unauthorized access.
In general, decentralized autonomous organizations were created with the aim of providing greater transparency and openness to make the decision-making process more democratic. This is important because traditional financial institutions often restrict the access of ordinary people to participating in investing.
Of course, it is important to say that increased security and greater transparency in decentralized autonomous organizations reduce the risks of the investment process - but do not eliminate them completely. If the community members unanimously decide to invest in company N, they may make a mistake. Then, their funds will be in a vulnerable position. Therefore, every person who wants to invest in something needs to improve their financial literacy - apart from relying on technology and partners in a decentralized autonomous organization.
Tell us what are the features and differences in the development processes in the Web3 industry and how they differ from the usual one?
— If we talk about development, it requires additional computing power. To do this, you can use the provider's service or install your own node. The second option is more reliable because the stability and availability of the node depend on the company. New tools such as Truffle, Ganache, Hardhat, Solidity, Move,
OricilizedDB, GraphQL, and others are used to develop and test Web3 applications.
If we talk about the features of development processes:
- Architecture: Decentralized applications often have a more complex architecture than traditional web applications. They can include components that work at different levels, such as blockchain, smart contracts, and the user interface.
- Security: Security is a key factor in the development of decentralized applications. Developers should take into account the risks associated with decentralization, such as hacking the blockchain or compromising smart contracts.
- Compatibility: Decentralized applications must be compatible with various blockchains and smart contracts. This can complicate the development and support of these applications.
In general, Web3 application development requires more in-depth knowledge and skills than traditional web application development. However, the advantages of decentralization make Web3 an attractive platform for developing new applications such as DeFi, DAO, and metaverses.
What do you think are the prospects for Web3 technologies?
— I think Web3 technologies have great prospects. They have the potential to transform many sectors of the economy and society, including finance, business, healthcare, and education.
Of course, Web3 is still in its infancy. There are a number of issues that need to be addressed before it can reach its full potential. However, I believe that these problems can be solved and Web3 will become one of the most important technological trends in the coming years.
