💡1. Introduction

Generally, web3 refers to "a decentralized web that does not depend on a specific service entity", which is realized by utilizing blockchain technology. However, the barrier to achieving such a web3 ideal is still high, and there have not been many successful adoption cases widely accepted by society.

In particular, the definitions of terms such as vary widely, and differences in interpretation and ideology may lead to exaggerated expectations and community fragmentation, preventing the realization of the web3 ideals that were originally desired.

We at DMM Crypto are committed to overcoming these ideological divisions and working with our many partners and community members to solve problems to fulfill the ideals of web3, and to create businesses that utilize the inherent characteristics of web3.

In this chapter, we will explain how we are attempting to solve the issues surrounding web3 through SMP.

Current Status and Issues of Web3

One of the characteristics expected of web3 is to ensure data permanence and immutability.

The wave of digitization of content that accompanied the invention of the Internet is expected to accelerate in the future due to its high level of convenience. Under this trend, it has been anticipated that content will be spared from physical deterioration through digitization and that its quality and value will be preserved semi-permanently. For example there were arguments that video content recorded on videotape will deteriorate through repeated dubbing, but digitalized content will not deteriorate even after copying and can be preserved semi-permanently.

In reality, however, a digital dilemma has surfaced: storing digitized data is more expensive in the long run than analog storage methods. In particular, many cases have proven that content provided through Internet services can easily disappear at the convenience of the service provider. For example, in-game items acquired through social games or book data purchased through e-book services often become inaccessible when the service ends.

In addition, downloadable games and e-books are more difficult to lend and borrow among family and friends or trade on the second-hand market than packaged games and paperbacks, making it difficult to feel a sense of ownership of the content.

For these reasons, traditional analog media are being reevaluated from the perspective of long-term ownership and free use of content.

On the other hand, there were some expectations that decentralized management using web3 technology could meet the needs for long-term retention and free use of content, while also providing the convenience of digital content. For example, by representing in-game items and book data as NFTs on the blockchain, users will be able to manage their content and continue to access it semi-permanently as long as the blockchain system continues to operate even after service termination, thus ensuring permanence and immutability.

However, due to various challenges in web3, the aforementioned ideals have not always been realized. We believe that there are two major factors contributing to this issue. These are the following ideological and technical challenges.

Ideological and Technical Challenges Facing Web3

First of all, there are ideological challenges such as gaps in understanding and expectations of web3.

As mentioned above, the term "web3" itself is multidimensional, and there is no clear consensus on what it aims to be or what it specifically entails, and the information gap between those who are well-knowledged and those who are not is exacerbated. The multisensitivity and sheer progress speed of the web3 industry make it difficult for many people, including the masses, to work together to solve problems.

In order to establish the "decentralized management" method described above, all participants must share the various operational costs that have been borne by specific service providers in the past. On the other hand, only a limited number of knowledgeable people are able to do this, and there is currently a gap between them and the majority of people in the current situation.

As a result, for services that want to attract a large number of users, the old model in which the service provider bears the operational costs is a reasonable option, and many users are choosing such services, causing a swing back to a more centralized system. In contrast, there tends to be criticism that this model runs counter to the web3 ideal, and it is undeniable that this division of ideology is having a negative impact on the healthy development of technology.

Next is the technical challenge of achieving the desired level of service provision.

Unfortunately, it is difficult for existing web3 technologies alone to both fulfill the goals of web3-based projects and ensure the quality required for general services. For example, in order to maintain security under the constraints of single-factor authentication using private keys, which is a feature of blockchain, usability is reduced and users are required to be extremely knowledgeable. In addition, although blockchain is a type of decentralized system, its structure is not scalable, as its primary focus is on consensus building for the entire system, and the processing capacity of the entire network does not increase as the network grows. Furthermore, interoperability is difficult to achieve, such as connecting different blockchains and linking them with non-blockchain systems.

Therefore, even for projects with a strict web3 vision, the reality is that in many cases they are relegated to utilizing traditional, centralized management systems. Many of these services are no longer available when the project is discontinued.

Of course, some projects and protocols have emerged to propose and implement promising solutions to improve individual technical issues, but due to the ideological fragmentation described above, there are not many cases where these solutions are combined comprehensively to solve problems.

We aim to "achieve sustainability" (see Chapter 2) by overcoming these ideological divisions and proactively incorporating leading-edge technologies to take advantage of the expected benefits of web3.

The technologies and elements have inherent characteristics that contribute greatly to the development of sustainable businesses. This challenge is of great significance to us, the DMM Group.