How to Build a Web3 Application: Development Guide & Tools

Web3 has been a widely discussed topic for the last few years. What’s more interesting, many companies and entrepreneurs want to get into Web3 application development while barely understanding it. If that’s the case with you — you’ve come to the right place.

According to the 2021 Electric Capital report, over 80% of developers in this community came into the market in 2019. Most of these developers (65%) came in 2021 alone, which shows a major surge in popularity. And still, only a fraction of programmers contribute to open-source Web3 projects.

Most associate Web3 with blockchain, cryptocurrency, and decentralized finance. That’s only partially correct. Web3 applications incorporate these emerging technologies but use them as the foundation for a more inclusive goal: permissionless and privacy-focused Internet.

This guide will show you the coding framework, tech stack, and engineering practices required to build a Web3 app. You’ll also learn how to avoid the common limitations of this technology during development. But for starters, let’s introduce you to Web3 technology and its potential to advance the current-generation Internet.

What is a Web3 application?

Web3 is a concept for a decentralized Internet where web applications run on peer-to-peer (P2P) networks instead of centralized servers. This technology is built on open-source standards that leverage blockchain networks, smart contracts, and open-source tools. 

How does that differ from what is currently available on the Internet? This requires a brief history lesson.

From Web 1.0 to Web 2.0

In the days of Web 1.0, which spanned 1991 to 2004, the Internet resembled a large Wikipedia. The websites were static: mostly read-only pages that you couldn’t interact with. Users were consumers that had limited abilities to create and monetize content.

The Internet transformed in 2004 with the advent of JavaScript, HTML5, and CSS, which introduced a new level of interactivity. Web 2.0 has made users into contributors. They have tools to create and share content on platforms like YouTube. In addition, Web 2.0 made it easy to express their opinion or buy each other’s content.

Web applications started collecting information about users to serve them better content. For example, your Google search queries, Facebook likes, and retweets can show what kind of content you like. At first, platforms used this to tailor your experience and keep you engaged. But in time, this led us to the age of targeted advertising.

Tech giants consolidated control in Web 2.0. Platforms can manage the information you see in your feed, moderate your content, or restrict your access if you go against their rules. At some point, platforms started selling data about your online activities to ad networks, sometimes without being transparent about it. Finally, it was the tech giants and financial institutions who were gaining the bulk of the profits from ad revenue and commissions.

Rise of Web3 applications

Web3 is a shift toward decentralization. The data is distributed across the blockchain infrastructure of computing devices (known as nodes) instead of the centralized servers of tech giants. At the same time, smart contract algorithms help users transact with each other without the middleman.

This version of the web gives users complete control over their information. It’s up to them whether to share data with ad networks or if they — not Facebook or Google — should get compensated for selling it.

Web3 applications have become synonymous with cryptocurrency, but the technology has numerous implementations. Here are just some Web3 examples:

• Decentralized Autonomous Organizations (DAOs) — legal structures without a central governing body where power is distributed across token holders who collectively vote on activity through smart contracts.
• Non-fungible tokens (NFTs) — people join NFT marketplaces to trade unique tokenized assets that represent digital objects (art, videos, music, and other assets).
• Web3 browsers — privacy-first browsers like Brave can integrate with dApps, let you control the content you see, and award you with native cryptocurrency for watching ads.
• Decentralized Finance (DeFi) Platform — blockchain-based services that allow conducting transactions through digital wallets (dApps) without third-party entities.
• Web 3 games — gamers can engage in play-to-earn games, exchange unique assets in regular games, and invest in NFT real estate in Metaverses (virtual worlds).

It’s important to note that Web3 is an actively developing concept that could shape into something much greater. But even the existing solutions highlight how it is an improvement over the current generation of the web.

Advantages of Web3 applications

Let’s talk about how web applications and user experience will transform when powered by Web3 technologies. Here are the principles they are built around:

• Direct transactions. Blockchain and smart contracts allow financial businesses, companies, entrepreneurs, and consumers to exchange, rent, and interact with digital assets directly (without intermediaries).
• Reduced costs. Users don’t have to pay commission for verification, processing, and legal proof of right to third-party companies — everything is done via automated contracts. Some centralized DeFi platforms (like Binance’s BNB Chain) will still take commission, but their fees are nothing compared to traditional finance entities.
• Permissionless (openness). Anyone can interact with most DeFi applications, NFT games, Metaverse worlds, and other Web3 applications through their digital wallet.
• Online privacy. Web3 introduces the concept of digital identity — an ability to interact with the web without providing personally identifiable information. This also means tech giants can’t collect, store, and sell your web activities to undisclosed third parties.
• Data ownership. Users decide which content they watch when they want to see ads, and whether they share personal information. 
• Transparency. Blockchain is an unalterable ledger that stores information about all transactions publicly so everyone can verify their ownership rights.
• Fail-proof storage. There’s no single point of failure in decentralized Web3 applications. Every node (server) in the network can store independent copies of the entire blockchain. So, the system keeps functioning if several servers go down, and the information can be quickly restored after incidents.
• Composability. Web3 application development is open source. Web devs have full access to the code in other apps to create digital assets, smart contracts, and consensus mechanisms. 

The leap between Web3 and Web2 is drastic, in theory. One could argue it’s as dramatic as it was between the second and the first generations of the Internet. But are the technologies you need for application development accessible enough for widespread use?

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Web3 application development tech stack

Good news for developers — the Web3 development kit has advanced immensely over the last few years. But we don’t want to list all the emerging tools you can use. Instead, we want to focus on the tech stack you’ll need for most Web3 applications.

Front-end level

The Web3 application development framework for the client side isn’t that much different from that of your typical web and mobile apps. Proficiency with HTML, CSS, and JavaScript is enough to build 99% of apps.

Your tech stack might include a React open-source library, as it offers a growing number of extensions, including React Native for mobile versions. The Next.js framework is particularly helpful for building authorization modules, website layouts, and APIs.

Blockchain protocol level

You want to choose back-end programming languages supported by popular blockchain networks. Most Web3 applications run on Ethereum Virtual Machine (EVM) — a software platform that allows executing machine code on the Ethereum ecosystem. An Ethers.js library would be a go-to option for integrating your app with this blockchain network. 

Alternatively, you can go for the less resource-intensive Solana or Polkadot blockchain platforms built on the Rust programming language. Solana’s website offers a complete tool suite with extensive documentation on interacting with the network. And to build Web3 apps on the Polkadot network, you’ll need a Substrate framework.

Node level

Web3 applications use nodes to exchange data with blockchain networks. However, running your own node requires full-time maintenance, back-end setup, and load balancing. That’s why most companies prefer node providers — companies that host the infrastructure for your application.

QuickNode, Alchemy, and Infura are popular Web3 infrastructure providers that support Ethereum, Solana, and other major testnets. In addition to nodes, these platforms offer a suite of Web3 APIs, SDKs, and other tools that simplify development.

Contract level

Choosing the programming framework for smart contract development is critical for two reasons. Contract algorithms power your Web3-based application. Posting on your blog, trading digital assets on a DeFi exchange, or interacting with players in an NFT game — all are controlled by an algorithm. The second reason is interoperability — the language you choose may lock you out of some blockchain networks (more on that later).

Your team should pick a common programming language and be proficient enough to build clean and secure code. Solidity and Vyper are the prevalent high-level programming languages for smart contracts on the EVM. On the other hand, Solana and Polkadot networks require Rust (sometimes C or C++).

A development environment is a must-have for building smart contracts. For example, Hardhat and Truffle offer Web3-compatible tools that simplify testing, debugging, and deploying algorithms for your network. 

Data storage level

Storing every piece of data for your Web3 app directly on the blockchain is an ineffective use of resources. Besides, many digital assets (primarily NFTs) don’t contain any media — they’re simply pointing to a URL. As you understand, URLs, websites, and domains can always expire. Your developers can avoid these limitations and associated risks with decentralized storage protocols. 

Many Web3 storage solutions combine The Interplanetary File System (IPFS) and Filecoin storage protocols. The IPFS nodes let you identify digital assets based on their content (instead of location or name) to create immutable links. And to make the IPFS storage persistent and ensure the integrity of your data, you could use a P2P network like Filecoin.

Indexing level

Nodes can only retrieve raw data from the blockchain and, therefore, are useless for advanced analytics. On top of that, the Web3 toolkit lacks a native indexing layer for processing this data. You could organize all the data in your network manually, but it would be months of hard work. Instead, it’s much easier to connect an indexing protocol.

The Graph lets you integrate APIs that create an abstraction layer for your Web3 application data. These APIs communicate with your nodes, smart contracts, and other data storage protocols. This lets your app quickly fetch low-level insights for your transactions, return critical metadata, extract media, and do other advanced queries. 

Serverless platforms

Web3 application development platforms are useful for many reasons. They provide the processing power for complex computational tasks. Plus, they give you the back-end you need for your application, including user authentication and database management mechanisms. The platform also automates redundant tasks, like logging user activities on the blockchain.

Amazon Web Services (AWS) is a popular solution for Web3 projects. According to Amazon itself, about 25% of Ethereum workloads run on their platforms. Moralis is another hugely accessible tool with a wealth of development tools, libraries, and APIs for blockchain-based projects.

This should cover the essential technical stack for most applications. But as our experience tells us, development is full of challenges, even with pre-built tools.

Web3 projects require deep blockchain expertise to navigate through the challenges, and thankfully Unicsoft possesses it.

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Key challenges of Web3 development

Some technical aspects of Web3 raise questions about its accessibility and can complicate application development. The core challenges this technology presents right now are:

• Application at scale. Most blockchain projects are based on Ethereum, which has higher transaction fees and a slower performance than other blockchains. To resolve these issues, we use Layer 2 solutions (like sidechains) or stick to less resource-intensive networks with better throughput.
• Interoperability problems. Smart contact and digital assets in your Web3 application might be incompatible with some blockchains depending on the tech stack you used. That’s why we prefer flexible programming frameworks and follow the latest MetaFi standards that make digital assets available across popular networks.
• Regulatory ambiguity. The decentralized Web3 ecosystem means transactions are still largely unregulated, leaving many gaps for technical mishaps and scams. Although the solution is yet unclear, the best option, for now, is to align your procedures with industry-standard data privacy laws (like GDPR, FDA, or HIPAA).
• Illegal activity. Chainalysis’s 2022 Crypto Crime Report shows that criminals have sent over $33 billion worth of illicit cryptocurrency since 2017. However, that’s less than 0.05% of the overall transaction volume in 2021 alone. Besides, this problem can be potentially resolved by implementing noninvasive KYC checks. 
• Security risks. Hacker attacks are disconcertingly common in blockchain, as your protocols are only as secure as the underlying smart contracts. What’s worse, you can’t modify the contract algorithms after release. As such, you need experienced smart contract developers and thorough audits to ensure compliant and error-free code.
• Expensive development. Developing a uniform and secure Web3 application from scratch requires more resources than most companies are willing to spend. Luckily, you don’t need to create every component of your blockchain infrastructure.

As an experienced Web3 application development company, Unicsoft can solve all of these problems. We make the most of the composability aspect of this technology to get your application off the ground in short time frames. 

Our team can develop your DeFi lending platform, NFT marketplace, or other blockchain-based apps on smart contract and front-end levels. This will give you a secure and highly scalable platform that integrates with popular blockchain networks in weeks instead of months. 

What’s next?

Web3 is an evolution of the centralized Internet to a privacy-focused, commission-free, and financially independent decentralized environment. Even with the rough edges the technology has now, its advantages are likely to attract users at scale. That’s why Web3 application development is something you might want to embrace sooner rather than later.

An advanced technical stack and coding proficiency aren’t the only things that you need. Blockchain-based projects require expertise, as you must navigate through the challenges that can accumulate during development. Thankfully, experience is something we have in abundance. Unicsoft is a blockchain service provider and Web3 developer recognized by industry luminaries like TopDevelopers, Gartner, and Techreviewer. We invite you to check our portfolio of NFT marketplace, DeFi exchange, and dApp projects. Better yet — you can reach us to discuss your business idea in depth.