Building Products in Web3: Evolution, Not Revolution

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Arcana Network Blog

10 min readApr 10, 2022

Our co-founder and CEO Mayur Relekar recently gave a session on building products in web3. Organized by The Product House, the session is a great fit for non-tech individuals, web3 enthusiasts, and product managers alike.

Starting from his foray into web3 to the pressing problems plaguing web2, and how web3 products must be a result of evolution but not revolution, Mayur shares a great deal about what is needed to build in web3.

This blog is a summary of Mayur’s presentation and session, and is therefore divided into various sections. We start from introducing how Mayur got into the crypto space and then dive into the nuances between building for web2 and web3, why it is important to care about privacy, security, and transparency; and the paradigm shift needed to build in web3.

Mayur’s foray into Web3

Mayur is a two-time founder in the past who has leveraged his early endeavors in entrepreneurship to become a product manager. He continued working as a PM for about five years, until crypto and blockchain caught his attention in 2017. This period also marks his foray into web3. What began as an interest in Bitcoin and Ethereum translated to buying a bunch of cryptocurrencies. Mayur had even participated in a couple of ICOs.

Over time, dabbling in the world of crypto got him to read more and get thoroughly acquainted with understanding white papers. This was when Mayur felt like “there was no looking back.”

Currently at Arcana, Mayur oversees several things, mainly product and strategy.

Building for Web2 vs Building for Web3

Before we move on to the topic of building for web3, it is worthwhile to consider what building for web2 is like. That would in essence put several things in perspective. Since Mayur’s a PM at the end of the day, most of the information he conveys through the session is done keeping the end-user in perspective. With that perspective in mind, let us get going.

Consider a typical web2 product, say Facebook or Instagram. What you encounter here is a familiar signup process. Perhaps a social login feature where you can also opt to get an OTP for two-factor authentication and so on. Now the entire process is seamless and has been replicated multiple times across multiple platforms.

For developers, building in web2, as a result, is pretty straightforward.

This brings us to the next part of the equation– storing and sharing incredible amounts of data with huge distribution. Be it YouTube or Instagram, huge amounts of data is processed and each user gets massive distributions. You can, for instance, upload a video on YouTube and suddenly, millions of people can now choose to watch it. Enabling this kind of distribution also has become quite straightforward. You have cloud providers such as GCP and AWS to your rescue.

As a result of this massive distribution, we’re all used to consuming a lot. It is also worth noting that most of this information we consume is often personalized to our tastes. Again, enabling such suggestions that keep you consuming more is also quite doable. There are several algorithms that enable this, and these algorithms are nothing but the IP of platforms such as Facebook or YouTube.

To top it all off, India has a stable banking system with easy transaction facilitators like UPI and wallets like PayTm making things smoother and simpler. Setting up an app and accepting payments is more seamless than ever.

Uncovering the Hidden Costs of Web2

Another important aspect of most of the web2 apps we use is that they’re free. Facebook, Gmail, Instagram, and WhatsApp– all are free to use. More than 95 percent of apps on the Google Play Store are free; there may be some premiums to opt for (like YouTube premium), though.

So what do developers then have to work on? Considering the fact that selling an app and getting a user to pay is not the priority, its user acquisition that they have to focus on. So a developer can simply develop an app, raise money, and not worry about charging users. All the focus will then be on onboarding users.

Keeping all the aforementioned facts in consideration, let’s play devil’s advocate and arrive at a set of questions:

Do we ever ask why we need to enter our DOB or gender, or such personal information when signing up to use an app?
Do we wonder what exactly is happening with our data? What would these algorithms do with our data?
Do we ask ourselves who all has access to our data apart from the developers of a particular app?

We all consume tons of information on a daily basis; but how often do we wonder what traits of our personality or identity are being inferred or analyzed?

This discussion brings us back to the quote that says if something’s free, we’re often the product.

“If you’re not paying for the product, you’re the product.”

If we really sit down and think about the various free products we use, it becomes clear that most of them are free as in puppy. It’s like this: someone can give you a puppy for free. But now, you have to feed it, take care of it, and keep it safe. In essence, there’s a lot of hidden costs that don’t surface when the free puppy is handed over to you.

Consider Facebook or Google. Most of their products are free. But they never tell you what they exactly do with your data or what practices they’re following. It’s completely opaque.

We’ve all seen cases where one talks about a certain product and they end up seeing ads for the same product a while later. An ex-Googler tweeted about such incidents saying Google and Android never listen to your conversations. This is because they don’t have to in the first place.

If you book airline tickets to a destination, it’s likely that you’ll get hotel recommendations in your email. We never really know much data about us is being shared between our ISP and e-commerce sites. All of this, in essence, shows us the costs of doing things the web2 way. And this cost is getting amplified since the advent of smartphones.

Everything said and done, there have been cyberpunks and people aware of the grim reality who have always pointed out the flaws with the way information is being accessed, shared, and sold. But all of this has done little to nothing in terms of changing the ways of the world.

Decentralization is the Future

We all know decentralization is the future, and we say so, that too on Twitter– a centralized platform. Because no one can deny the fact that Twitter offers massive distribution. What this means is that people, at the end of the day, want a useful product. So it becomes hard to care about things like transparency, security, and privacy when the key emphasis is on useability. Not only that, but you can’t also do anything about it. Writing on Google Forum and reporting an issue won’t do much.

Let’s go back to the fundamental question of why it’s hard to care about privacy or anything on those lines.

Imagine you sign up with a fleet service such as Uber. The first thing you do is hit “Yes” to all the terms and conditions. This is because we all want to get to using the product as quickly as possible. And frankly, nobody likes to read pages long legal conditions and terms. There could be a clause that says NSA or the Indian equivalent of NSA would spy on you through the app.

It is important to care about the Terms & Conditions because the way one company would process your information could be massively different from another one. Say Signal vs Facebook. That being said, there’s nothing wrong with companies writing their set of Terms & Conditions. Each product needs legal document(s) to cover its bases. But then, when things get slipped in and users start to ignore some big red flags, that’s when it becomes complicated.

Instagram’s Terms & Conditions, for instance, state that they’re free to sell your data and give it up in the name of advertising. Then there’s deplatforming. There have been cases where people have been deplatformed just like that. And there’s no reconciliation for any of these things. That’s because the user(s) who got deplatformed have agreed to the Terms & Conditions.

Even governments across the world are looking to implement their own version of the GDPR. India wants its own GDPR, the USA is implementing the same through its SAFE DATA Act. While the implementation of these data regulation acts can end up becoming draconian, there’s some good that can come out of it.

Corporations like Apple too are now becoming stringent about privacy requirements and security standards. Since late 2019, Apple has kept raising the bar in terms of privacy standards for apps. For app-developers in specific, these privacy implications and considerations are quite important.

There was a point when WhatsApp’s changes in privacy terms triggered several users to install Telegram or Signal as a replacement for WhatsApp. Though the wave died down shortly and most got back to using WhatsApp, there is certainly at least either Telegram or Signal installed on most people’s smartphones. This indicates that there’s a need for building privacy-preserving apps. As a matter of fact, apps that are aligning themselves with privacy, security, and transparency are actually seeing improved ROI and much lower churn rate since users end up being very loyal to such brands.

For reasons such as the ones above and more, it’s high time that you as an end-user and developer should start caring about what happens with user data. So now, how does web3 fit in?

Web3 is a Game Changer

With web3, you can perhaps build similar products you do in web2, albeit with more security, privacy, and transparency. By connecting a wallet, users simply give away a Pseudonymous Identifier which doesn’t leave any scope to infer much information about them. This doesn’t mean developers can’t do A/B testing like they’re used to with web2 apps. They can, but without collecting information such as the user’s phone number or date of birth.

Web3 innovations such as NFTs can help make royalty and ownership seamless and transparent, DIDs help with portability, and most of the code is open source and verifiable. Moreover, with wallets, you can always pull back your information from any app that you no longer want to use.

Cryptocurrencies and tokens, on the other hand, make it easy for the community to have a say in what happens. Just like how a shareholder can have a say in the shareholder meeting of a company such as Reliance, cryptocurrencies owners and token holders can get the same freedom and say from day one about what happens in their communities.

All things said and done, web3 is still like a bubble some people are part of. Because quite frankly, we people in the web3 space believe that it solves everything. There are also quite popular memes on Bitcoin and crypto fixing this and that. If not anything, web3 has introduced a bunch of new problems to tackle. What are cryptographic public keys and private keys? How to store and manage these? What is gas fees and why do I have to pay for transactions? For anyone knee-deep in the web3 space may find things like this second nature. But other tech natives on the internet never really know any of this.

Even when we say the code in web3 is verifiable and open-source, who would understand a program written in solidity? Questions like this and the ones mentioned above bring us to a clear realization that there’s a lot of friction for users looking to venture into web3.

So the right way to build in web3 is by evolution, not revolution.

An everyday user is not looking to wage wars with web2 giants like Google or Facebook. While inciting a revolution against the existing practices and companies may earn a lot of followers in the short-run, it is worth noting that most users are simply looking for useful products that make life easy. So we have to take the responsibility of taking users through the merits of web3, decentralization, and why it’s important to care about privacy, transparency, and security. Creating user awareness as to why a web3 alternative to a web2 solution may be the right option is an evolutionary process that needs to be adopted.

What we do at Arcana

For us at Arcana, usability is the focus. Simplifying onboarding your first user, providing them with a seamless experience where they don’t have to worry about getting a wallet and use their Gmail login instead. On top of this, we provide basic primitives for encryption and have a storage network that allows you to store data in a decentralized, redundant fashion.

We also provide various methods to allow you to manage the access to this data that you want to store or your user to store. So in essence, any data pipeline that exists in any app, such as between a user and another user, we help secure it. And we let you do all of this within minutes with simplistic integrations.

Mayur concluded the session by talking about how building in web3 should be an evolution, and not revolution. Q&A followed, and some of the informative questions and insightful responses will soon be shared in an upcoming blog post.

“We only care about increasing the size of the pie. That’s honestly all we care about. We want to make it very easy for devs to build and more people to come into the space. We are always available. So come with all your thoughts, there are no silly, dumb, or naive questions. It’s a very inclusive space. So make the most of it,” said Mayur Relekar, Co-founder & CEO of Arcana Network.

About Arcana Network

Arcana is the Web3 Infra to manage your data layer. Web3 App and wallet developers use Arcana’s SDK to authenticate users by generating wallets with Social and Passwordless Auth, Store Encrypted Data, and Manage Access. Built for Ethereum and EVM based chains, with Arcana’s privacy stack, developers can build secure and privacy-preserving apps with a seamless user experience.

Arcana has raised 2.7Mn USD from some of the leading investors and founders in the ecosystem such as Balaji Srinivasan, Founders of Polygon, Woodstock, Republic Crypto, and Digital Currency Group.

Watch out for Arcana’s upcoming Testnet and Mainnet in 2022.

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