The prevailing narrative is that 2023 was a challenging year for Web3 adoption. Following an exodus of users and liquidity after the high-profile collapses of 2022, the markets languished in bearish territory, and VC investment tanked compared to the previous year.
However, narratives are used to paint broad strokes and don’t always reveal the full picture. While it’s true that the crypto-asset markets and startup funding faltered in 2023, Web3 adoption and development among institutions and enterprises is, if anything, accelerating. Financial firms and central banks are launching ambitious experiments, such as asset management giant Franklin Templeton’s tokenized money markets on the Polygon blockchain or Societe Generale’s recent listing of a euro-backed stablecoin on crypto-native exchange Bitstamp. These developments come alongside big brands such as Nike, Visa, and Gucci, furthering their efforts in Web3 with launches of token- and NFT-based loyalty reward and engagement programs for customers.
Furthermore, based on this trend, along with developments that are making the underlying blockchain technology more enterprise-friendly, we can expect to see more use cases and industry adoption emerging in 2024.
ZK Proofs for Better Patient Privacy
Healthcare is one example – an industry where Web3 has long held significant promise, such as more efficient patient record-keeping. However, healthcare companies naturally cannot adopt the “move fast and break things” mentality of a typical tech startup, so the promise has been slow to deliver. Now, the increasing availability of privacy-centric solutions using zero-knowledge (ZK) technologies is bearing fruit. Blockchain-native healthcare projects such as Solve.Care have been in development for several years, but can now leverage ZK technologies to facilitate clinical trials. However, development platforms such as Namada offer a way for established healthcare providers to experiment with Web3 technologies in a safe and flexible environment. Namada uses ZK proofs to encrypt data on-chain, while allowing data to be stored across multiple chains with customized privacy and access controls.
Integrating ZK technology at the platform level, rather than the application level, also opens up the technology to be adopted across an array of other use cases. Namada is showcasing the possibilities of its platform with an incentivized testnet launch based on a multiplayer game, where players compete against one another to execute shielded transfers of crypto assets across almost any blockchain. The ability for players to engage in covert activities is a critical component of many games and one that’s only just becoming possible on blockchain with the use of ZK technologies.
On-chain Encryption for Private Polling
Similarly to healthcare, the adoption of Web3 technologies for voting systems, either in public elections or for uses such as shareholder voting, has been slow due to an inherent risk aversion and a lack of sufficiently scalable and private platforms. However, Indian academics have found that blockchain-based voting systems can strengthen the democratic process, increasing voter engagement by allowing people to vote from their own homes, saving time and public resources, and reducing the number of false votes registered.
Bringing new encryption methods on-chain now makes blockchain-based voting applications a reality. Fhenix is the first platform to bring Fully Homomorphic Encryption (FHE) to the blockchain ecosystem, enabling data to be encrypted and computed on-chain, without ever moving it off-chain. It’s also an EVM-compatible Layer 2, meaning it’s open to Ethereum developers to build encrypted smart contracts for voting applications or a range of other use cases using the familiar Solidity smart contract language.
Harnessing Off-chain Data for On-chain Utility
Blockchain infrastructure has also come a long way. Only a few years ago, many blockchains operated as walled gardens, unable to deal with data from the outside on the basis that it required the same trustless verification as on-chain activities. The emergence of oracles went some way to bringing off-chain data on-chain, but one project, Space and Time, is taking this a step further with the development of a decentralized data warehouse that enables smart contracts to retrieve and process data with SQL, which is verified using ZK proofs.
However, recognizing that SQL doesn’t cover 100% of business use cases, Space and Time has now developed a similar solution for long-running Python jobs. It enables anyone to extract data from their existing database and load it into Space and Time without using any code and then connect Python jobs to smart contracts with ZK-proof guarantees. The solution enables a huge array of new blockchain use cases, such as tamperproof price calculations for on-chain perpetual options or the development of on-chain indices based on mass volumes of data from off-chain feeds.
The developments we’re seeing in enterprise blockchain are emerging at a pivotal moment when adoption momentum among organizations is already picking up. 2024 appears set to become a tipping point where interest meets truly industry-ready Web3 technologies for the first time.
Image by Kohji Asakawa from Pixabay