Web3 is an "emerging web economy," it's where we’ll go from web2; which is where we are currently. Web3 is starting to influence much more than simply the development of the web; as it expands its impact on other human-related interactions.

In this piece, I share my thoughts on how web3 might change our current perception about DATA.

 with the current state of things, therefore it's best that you brace for impact!

Ehhh.... I hope that wasn't creepy? You know what, let's just get right into this.

Web3 will have a significant impact on activities relating to data, different from the current state of things. 

A subsequent read-through this piece will at least explain why data is important and deserves paying attention to.

Data has different meanings for various sectors of the economy and facets of our life, but a bulk of this piece will focus more on data produced, consumed, and curated online.

Data is something we simply can't ignore because it influences so many of our decisions. Almost everything we do involves data of some kind. Scientists need data to forecast future events, marketers need data to increase sales, product managers leverage data on customers behavior to improve their products, and a new firm needs data to understand the market it is entering.

Isn’t it interesting to hear that you generate up to 

 you spend online, but you might want to ask data analysts why they believe you generate that much data each second. 

, according to SG Analytics. Another study by 

What do you make of these numbers? It’s obvious that data is simply just a big part of us!

It's also worth noting that every one of these numbers were made available since there is at least data to support their authenticity.

Anything that can affect how we produce, consume, and curate data is something that is definitely worth paying attention to.

One of the key tenets of web3 is that it would support an environment for data privacy and control. This typically makes web3 worth paying attention to. 

Data privacy and control in web3 refers to the ability of data owners to maintain control over their data, choose which portions of it to make public, and decide whether or not to make their data publicly available at all. Web3 is prepped to introduce a decentralized web.

What does this decentralized web mean, then?

Would it be that there wouldn't be any data available at all? Or that the internet would simply be a dead-end in gathering data? What would it imply for everyone if there were no means for centralized corporations to track our activities online?

To understand this, a lack of data will most likely result in poor decision-making, missed opportunities, unguided judgment, and even potential revenue loss.

According to SteveMo, a 2014 Salesforce MVP, "Bad data is the fruitcake nobody eats." This is exactly what would occur if there were to be no data made available at all; all that would be left would be data no one really wants to use.

Web3 doesn't necessarily project that data will cease to exist; it only emphasizes the need for data control to reside with individuals. The approach to data will, however, change considering data is not left flying around and manipulated by big techs like in web2.

Data curation in web3 would be carried out significantly different than it is with web2. Big techs would need to work their way around differently this time to access the new form that data would take. 

Data will continue to play a significant role in our lives even in web3. 

To say that web3 supports data privacy doesn’t mean that data will cease to be available. 

It would, in fact, mean that more data is being produced if we had a fully operational web3 environment where the internet is decentralized, where social media platforms allow for data privacy and are run as DAOs, where we own NFTs, where we all have our own unique avatars in the metaverse while remaining completely anonymous, and where everything else leverages blockchain technology.

Data privacy in web3 will, however, affect how data will be curated. 

Instead of granting free access to your data, it’d characterize owning an account on a platform that fully supports anonymity or conducting an internet search that doesn't necessarily gather any data about you or your device. Think of Chrome's Incognito mode.

The big techs still need your data to operate at peak, and one of the trends to easily anticipate in web3 is data monetization. 

Data monetization simply refers to being able to make money from your own data. 

There will be incentives for making your data accessible for use. Although these incentives may mimic a well-known web2 data curation strategy, this time you’d be the one deciding to monetize your data or not. Lots of big techs mainly capitalize on selling your data to third parties without you benefiting from it, in web3, you’ll choose who you want to sell your data to and what you’re willing to exchange for it. 

Along with the data monetization trend is a feature that may guarantee you with the opportunity to choose what happens with the data that you share. You will decide which portions of your data you want to share, the specifics of how you want your data to be used, and whether or not you want to provide a third party access.

In web3, blockchain concepts like the Zero-knowledge (Z-k) proof can be used to verify eligibility in the event that certain platforms need to confirm your eligibility for the platform, such as whether you graduated from college or not, rather than asking you to provide your college diploma, which would necessitate the release of your personal data. You can validate your eligibility without having to reveal your personal information.

Because some industries, such as the sciences and medical fields, may find it challenging to function optimally in an environment where access to data is restricted, they may start to offer exclusive non-disclosure agreements that makes a violation of data protection severely punishable in other to access quality data in web3.

The web2 can personalize your online experience by offering content based on your past behaviors that is most likely to catch your attention, since there is enough information about you. To take advantage of this level of personalization in the web3, your data might still need to be tracked. This time, though, your online data is not being tracked by a third-party. On the blockchain-enabled web, a smart contract might be written to interact with you, track your data and create a personalized experience for you. There would be no third party involved in this automated blockchain personalization.

With web3, anonymity is the norm. Platforms like 

 already support anonymity so that creators can onboard on the platform and register a pen name without necessarily having to provide personal information about themselves to access the platform.

Since every transaction and piece of data on public blockchains is accessible to anyone due to blockchain's inherent transparency, achieving web3 anonymity may be as simple as connecting to a platform using your wallet address, which serves as a representation of your digital identity, rather than providing your personal data. This will be one of several strategies for managing the kind of data about you that is made public. There's only so much personal information anyone can access with your wallet address. 

You probably receive those unsolicited emails because someone has access to information about your email address. If all of your online interactions are initiated through your Ethereum wallet, then you won't likely get any cold emails. The new phase of interactivity with the web where you don’t have to leverage your personal data for accessibility is what will largely characterize web3.

You can still provide your favorite brands with pertinent data that will help them improve their products or services on the web3. Unlike web2, where you were viewed as a product, in web3 you will be playing the role of a contributor when supplying data. You’ll have choices in how you participate in this process since it’ll entail more flexibility than the web2.

Given that web3 platforms are decentralized and lack a centralized authority that may take down data, whatever information you put on these platforms is likely to remain fully permanent. This will eliminate the data distortion that easily influenced web2. Since web3 data is permanent and cannot be altered, real-time data has better feasibility than distorted data, and data will enjoy better interpretation and utility. 

Web3 interoperability enhances data privacy while protecting you from a single point of failure. With interoperability, you won't need to enter your personal information each time you need to register a new account, as you would with web2, and you may utilize numerous web3 platforms with only a single wallet address. In web2, regardless of whether your information is secure on other platforms, if a platform is hacked with your personal information on it, this could result in a single point of failure for you and disturb your data security. Your wallet address wouldn't be enough to compromise your personal information, even if a platform in web3 were compromised.

It's not improbable to observe trends where companies start to create their own private blockchain in order to tailor your interactions in web3 to match their business goals and use 

 to uncover user data patterns. Companies like 

 have already begun to invest in their education on web3-related concepts.

Do you read and thoroughly comprehend those lengthy and boring terms and conditions when you sign up on a platform? The answer may help you realize why data privacy is an important aspect of web3 that merits promoting. Except you're desperate for a way to pass time after your lover broke up with you, you'll most likely just click on "I Agree," and presto, you're in. 

The more of these terms you agree to, the more permission you allow these companies to use your data without consulting you and speaking to you in a language you can comprehend.

Although efforts have been made in web2 to create fair data privacy policies, web3 will allow for greater data privacy and control than web2 ever allowed. For the first time, users on the web will own complete access to their data and may independently decide how those data are influenced.

The web3 represents very exciting ideas on how data privacy would be attained, which is in fact what web3 represents.

It's important to pay attention to reality, comprehend the function data serves in society, and consider the forms that data privacy and control will take in web3.

iWrite

NAVIGATING DATA IN WEB3

Those who made the most money from holding Bitcoin probably had to HODL for years before they could profit. The highest profit ever made per Bitcoin held was when it reached its all-time high (ATH) of $68,000. While this is undoubtedly a good profit, cryptocurrencies are not only subject to holdings. Your crypto holdings can do a lot more if you look in the right places.

DeFi is short for Decentralized Finance. It is one of the advantages that the crypto space offers to its investors. Its distinguishing feature is the ability to initiate and complete financial transactions without relying on a central body.

DeFi is what makes it possible for you to buy a crypto token directly from a decentralized exchange without going through a centralized platform like Binance.  If cryptocurrency is ever to fully replace the conventional financial system, it must be capable of providing all of the services that conventional banking provides. It is, in fact, the reason DeFi was created.

Thanks to Ethereum, the token was created to be more than just a decentralized payment option and means of exchange, like Bitcoin was. At launch, Ethereum enabled DeFi functionalities, and users quickly began to benefit from it. Following Ethereum's popularity, more DeFi projects began to emerge, eventually flooding the crypto space with a variety of DeFi products, services, and perks.

The 2021 DeFi season saw a lot of DeFi products, both cryptocurrency and protocols. At the time of this writing, 

. A number of buzzwords that are now more common in crypto communities emerged as a result of DeFi. DeFi has its place in a variety of blockchain functionalities.

While there is nothing wrong with aiming for capital gains with your cryptocurrency holdings, it never hurts to learn about techniques to enhance your profits. Let’s dive into ways through which you can make more from your crypto holdings. 

 allow you to swap your tokens for other crypto assets or stablecoins in an instant at market pricing, because there is enough liquidity to let these swaps go through. This liquidity, however, does not just end up in a liquidity pool by magic. Liquidity providers provide liquidity pools.

By depositing your tokens into a liquidity pool, you can become a liquidity provider. The exchange or protocol to which you deposit your tokens as liquidity will then reward you for each transaction completed through the liquidity pool. Some exchanges allow you to earn their native tokens as well as a percentage of transaction fees from other traders using the liquidity pool, while others only let you benefit from transaction fees paid by traders.

Typically, being a liquidity provider requires you to deposit two tokens into a pool. For example, you will need to deposit both ETH and USDC into an ETH/USDC pool. This will make it possible for those that want to swap ETH to USDC and vice versa to access liquidity. Recent improvements enable the provision of a single token as liquidity while earning liquidity rewards. You can earn passively for providing liquidity in pools with good APR.

What happens when you place money in a bank's fixed deposit account? The bank gives you interest that will be paid at the end of the tenure, while using your money to make more money throughout that time.

Similarly, you can become a lender on DeFi lending protocols. The good news is that you stand to earn more interest than with conventional banks. While banks often provide less than 10% APY at best, earning more than 10% APY is not unpopular with DeFi.

DeFi lending protocols are made to serve both borrowers and lenders, and one way you can actively earn from these protocols is to participate as a lender.

You can lock up your crypto holdings or stablecoins in a lending protocol, which provides liquidity to borrowers while earning interest.

The lending protocol makes sure that your funds are protected by overcollateralizing borrowers, ensuring that you are still in good standing even in the worst-case scenario.

Imagine lending your $ETH to a lending platform when it was around $200. You would have benefited not only from its price appreciation, but also from the income connected with being a lender. This is not to imply you wouldn't be concerned at moments where there was a large price drop. Overall, that would have been a good long-term use of your $ETH.

 is a lending and borrowing protocol that you can look into and see how it works.

The upcoming Ethereum merge will move the coin from a PoW consensus mechanism to a PoS consensus mechanism. The goal is to assist Ethereum in resolving its scalability issues and help its users in completing transactions more quickly, so that Ethereum can fit in with use in everyday life.

If Ethereum uses a PoS consensus, there will be no need for miners to solve complex math problems in order to protect the blockchain as with PoW; instead, validators will secure the blockchain by staking their $ETH. Everyone who contributes to the security of a blockchain, whether PoW or PoS, is rewarded.

Validators will need to stake at least 32 ETH per node to secure the Ethereum chain in PoS. Even at the present market price, 32 ETH is a lot for many people to own. The advantage of DeFi is that you do not need to own 32 ETH to stake and get staking incentives.

There are protocols and exchanges that allow you to stake a small amount of ETH with their platform and earn a percentage of the benefits for your fraction of the node they manage. Most of these exchanges will lock away your $ETH for the duration of the staking period. 

, on the other hand, have begun to offer 

 alternatives, allowing users to stake their $ETH and receive a staked $ETH. Users can then use their staked $ETH with other DeFi functionalities. You can earn staking rewards while also using your token to participate in other opportunities provided by DeFi.

Many additional PoS networks enable users to stake their tokens and gain rewards. You can either stake through protocols and gain staking incentives, or you can become a direct validator by owning the necessary amount of tokens.

The strategies for earning from your crypto assets mentioned in this essay are the simple for anyone interested in taking advantage of DeFi to use.

It is, however, important to understand the risk connected with these DeFi passive income options. Each has its own set of risks and rewards.

3 ways to earn with your crypto holdings

If you had information that the real estate industry will be big in 6 months from now and after doing your own research, you’re convinced that a growth will happen, the most natural thing to do will be to act on the information; invest in real estate. 

You’ve looked through all you’ve got, and you realize you can spare up to $4,000 for a real estate investment. Sadly, in our hypothetical 

, to own a unit of investment in the real estate industry costs $100,000. Yeah, you’ve got a strong conviction that real estate will do well soon, but how do your raise $100,000?

Even a 10x of your $4,000 still wouldn’t be anywhere near paying for a unit.

You’ll most likely give up on this opportunity, it just don’t seem like there’s a way around it. 

Your curiosity for a way out of your hurdle led you to a community of like-minded individuals interested in investing their little sums in real estate. This community has proposed that members pool their money and acquire a real estate unit. The profit and loss is to be shared among pool’s participants. Members began pouring money into the pool, and within a few days, the community could buy a unit of real estate investment. 

A $20,000 contribution from a single member to invest into a unit of real estate means the member is willing to share 20% risk of the unit’s risk and reward. In the same way, your $4,000 investment will give you a 4% portion of the unit. Now, if everything goes fine, you’re poised to benefit from the growth of the real estate industry, thanks to the community that put a pool together. 

So it means it wouldn’t even matter if a person has $500, they’d still be able to own a part of real estate, provided they find a community like yours.

What you’ve done with owning a bit of a real estate unit worth $100,000 with a $4,000 investment can in fact be replicated with NFTs. 

You’ve heard about NFTs like every other time right? I could even believe you, if you claim to have minted a Bored Ape in your dream; I’d still think you’re weird though. 

This piece will discuss a break-away from the regular NFT. Hang in there buddy, and let’s go for a ride!

You can find an NFT everywhere! Does it do the job? Oh, I guess not. 

NFT is short for Non Fungible Token. It’s marks the representation of a digital asset on the blockchain. NFT is a digital asset class that is not liquid.

An NFT could be a digitally stored music, arts, designs, game characters, social media content, or even a digital representation of a physical property.  

NFTs gained popularity in 2021 (though a technology that has been present since 2014) and since then, the concept continues to evolve. Today, NFTs can do more than be a speculative asset to gain use as access to events, get VIP experiences, make decision within a DAO, get in on a metaverse experience and even confirm access to a real-world property.

As a non-fungible asset, no two NFTs can ever have the same digital properties on the blockchain. While it’s possible that the content of different NFTs may be similar, there are never different NFTs with the same digital property.  

Simply put, NFT = JPEG, or say a simple ‘right click’ + ‘save’ is enough to own the exact Bored Ape thingy that Justin Bieber bought for $1.29 million, and have it sit conveniently in your gallery. 

While it’s cool to get anything super easy just like that, I’m not convinced that you have Justine Bieber’s Bored Ape NFTs in your gallery. JB has it in his wallet and that’s why he is the owner. The NFT information is saved on the blockchain and not only can we verify that JB owns it, we can also see if it moves between wallet, and most note-worthy, we can discover that JB didn’t actually transfer the ownership to you. Errr….I mean not yet.

JPEG is not equals to NFT, and ‘right click’ + ‘save' is not equals to minting. NFTs are on the blockchain, JPEGs are not. 

One similarity, however, is that both NFTs and JPEGs can attract value. 

Maybe you even like the CryptoPunks NFT community better, but no matter how much you think about it, you’ve come to a view that the most performing NFTs are for the affluent. Plus, you’re probably not even a fan of Ethereum’s high gas fee. It now makes sense to see why 

 by trading volume (all the juice lives on it), which has surpassed a $20 billion trading volume. Though OpenSea interoperates with networks like Polygon, Solana and Klatyn, outside of Ethereum, it’s still a favorite to Eth-based NFTs.

It’s not in my place to judge how you think about it, but the floor price for NFTs like BAYC and CryptoPunks makes them a no-go area for the average person, making them more of a sacred community rather than being entirely decentralized. 

To meet the needs of the growing NFT community, it’s only a matter of time for solutions that serve the wider market to be rolled out. 

If NFTs represent a digital asset class that 

You won’t be wrong to say Fungible-NFT. However, the more likely used term within the NFT community is Fractionalized NFT, also F-NFT. 

, don’t you think? Literature really do leave its mark on everything ehh. 

A fractionalized NFT is basically an NFT that’s divided into fractions. The fractions of an NFT represent a part of the original NFT. 

This way, much more than one person can own a single NFT, which is quite different from the norms with NFTs; which is that an NFT should typically be non-fungible, meaning it cannot be reproduced or shared into other similar part. 

Fractionalized NFTs work similar to the real estate example in the introduction of this piece. Having different people put money together to buy a unit in real estate investment, which would have been otherwise limited to ownership of a single person means more people can now participate.

, fractional NFTs solve illiquidity found in the NFT market . 

The idea of F-NFTs is to provide a market environment where trading NFTs become completely instant rather than hoping that an NFT gets picked for a listed price at some point.

With cryptocurrencies, you’re much more certain of what you’ll exchange your token for at the point of trading. With NFTs, you never can really tell. 

 as at the time of this writing. Total F-NFT market cap did peak to over $212 million in 2021. 

NFTs are typically developed as ERC-721 tokens, which supports 

To make NFTs into F-NFTs, the original ERC-721 NFT is locked into a smart contract written to execute this type of program. 

To be made into fractions of tokens that is easily tradable, the smart contract creates F-NFTs as ERC-20 tokens, like regular tokens built on the ETH chain. These tokens will then have the same value, and can be exchanged for each other as they do not carry different unique identity in their ERC-20 form.

Since fractional NFTs are made into ERC-20 tokens to become liquid, it’s not so out of place to anticipate their involvement with DeFi. F-NFTs are already gaining use with liquidity and identity on lending protocols. 

Buying ERC-20 tokens as F-NFTs, means you’re buying a part of an original NFT, making the ownership of an NFT flexible than ever. If Justin Bieber decides to lock up his BAYC NFT into a vault and issue 20% as Fractional NFTs, I tell you my friend, you’ll own a part of Justin Bieber’s BAYC NFT.

BAYC issued F-NFTs should not be mistaken for the project’s official token which is the ApeCoin.  Buying Apecoin does not represent a fractional ownership of the BAYC.

With Fractional NFTs, a bunch of people can come together and own an NFT -providing them the opportunity to own the most decorated NFTs with small funds.

Some F-NFTs give holders access to DAOs of a project. 

Fractional NFTs is a way for an NFT project to attract investors that would have otherwise avoid investing into NFT. It can increase NFT adoption and utility. 

Fractional NFTs can be a pool of an NFT collection, or  different NFT collections or a pool of a rare NFTs from a collection. 

F-NFTs are not always particularly tied to the price of the underlying NFT collection. 

F-NFTs can be utilized to hedge against market risk for the most part. Although cryptocurrencies and NFT do not operate in the same way, they do share significant similarities. The risk linked with both concepts is one of these similarities. To hedge against this risk in the event of a market downturn, crypto traders can simply exchange their crypto for stablecoins, which have a fiat equivalent and are not volatile. Due to NFTs illiquid nature, this type of hedge would not be achievable with regular NFT trading. Fractional NFTs will, however, make hedging against market risk possible in the event that a bear market is anticipated. 

Fractional NFTs can take different form, and depending on the protocol supporting the F-NFTs, the possibilities differ.

Let’s look at the well accepted F-NFTs protocol. These protocols allow you to find F-NFTs in the market and also give you the opportunity to create yours.

 is, without a doubt, the one-stop shop for F-NFTs. Just as the enormous statement on the front page of the website states, "buy, sell, and mint fractions of NFTs," it’s exactly what you'll be doing on fractional.

Fractional allows you to fractionalize ERC-721 compliant NFTs. The protocol is adaptable, allowing you to build a collection, calculate token supply, select a token symbol, and set the price for NFT bids, assisting you in the creation of your own ERC-20 F-NFT token.

Fractional also allows you to combine multiple NFT collections and issue them as one.

your deposited NFTs and make them tradable at any time. The protocol has its own automated market maker exchange where you can trade your tokens for other crypto assets at a go. You can also receive farming rewards by providing liquidity on the protocol.

Unicly also accepts both ERC-721 and ERC-1155 NFTs. These NFTs can be converted into liquid tokens known as uTokens.

Say you lock up BAYC on the protocol, you’ll be provided with uBAYC, which represents your portion of BAYC in the vault. 

Anyone who holds the protocol's governance token, UNIC, is eligible to participate in its DAO. 

If anything, I hope this article has opened your eyes to that an expensive floor price is not enough to stop you from owning the NFT you most fancy.

The content of this piece should, however, not be mistaken for a financial advice. You should be responsible for DYOR and make decisions you’re comfortable with. 

More importantly, you know JB got nothing on you now and you can very well own a portion of his 

The easiest way to own Justin Bieber’s BAYC NFT

Thanks to DeFi, you may now enjoy financial services in the crypto space  that were previously only available through the conventional banking system. Not only does DeFi allow you to participate in conventional financial services, but it also offers better returns and more flexibility than conventional financial institutions.

DeFi provides access to lending, borrowing, staking, farming, liquidity provision, and other related services. It enables crypto investors to maximize returns on their crypto assets in methods other than capital gains.

In this piece, I'll discuss how cryptocurrency-based loans work and why these loans are used in DeFi. You'll identify what type of crypto loan is suitable for you if you're considering taking one.

A crypto loan provides you the opportunity to borrow cryptocurrency assets.

Oh! You may be thinking that since cryptocurrency is really volatile, why would anyone in their right mind seek crypto-based loans?

ICYMI, accessing a crypto loan is super easy as there's no need for any paper work, there are no constraints as found in conventional lending systems and most importantly you can take a loan in 

, which is a cryptocurrency pegged to a fiat value. This means that $1 in fiat will always be equal to $1 in stablecoin, and stablecoins are not affected by crypto market volatility.

There are two major forms crypto loans could take in DeFi. Crypto loans are either collateralized or uncollateralized.

Crypto loans involving DeFi are also called DeFi lending.

A further read down this piece will explain the most likely ways a crypto loan may be accessible to you in DeFi.

 Similar to the conventional loan system where a bank would require that you provide a collateral before you have access to loans, the collateralized crypto loan works exactly the same way.

Financial institutions ensure that your loans are 

 to protect against losses caused by unforeseen occurrences and to control risk. Crypto loans that need collateral before being accessed are simply overcollateralized too.

To put it simply, in order to obtain a $100 loan, you may be required to provide crypto assets worth up to $500. If this scenario plays out, the loan is collateralized at 500% of the borrowed amount. As a result, the protocol/lenders in charge of making the loan available is not subject to an absolute risk.

When applying for crypto loans, you will most likely lock up your volatile crypto assets, such as $ETH, with the crypto lending protocol in order to get stablecoins, such as $USDC, $DAI and so on.

Following our hypothetical scenario, a $500 ETH lock up would qualify you for up to $100 in USDC at a 5:1 collateral to lending protocol rates. Lending protocols allow their users to access both lending and borrowing services.

The lending protocol and the borrowers have an agreement with this loan type that may give the lending protocol the option to sell off a borrower's crypto asset when a bearish price impact pulls down the price of the locked up asset by a specified  proportion. 

In our example, if the lending protocol limits the drawdown of the locked up crypto asset to about 380% of the initial collateralization of 500%, once the price of the locked up $ETH drops to $120, the protocol automatically sells and realizes $120 for both the loan repayment and the charges associated with using the protocol. If this occurs, the borrower is no longer obligated to the lending protocol.

In case you're wondering who funds the lending protocol, lenders provide their crypto assets/stablecoins as liquidity to the protocol and earn commissions for it. The protocol then protects the lenders fund by heavily collateralizing borrowers. 

Instead of leaving your cryptocurrency in your wallet all day, why not become a lender and earn passive income from it?

no need to think hard about it, the flash is fast, flash loans are fast too!

Only this time, we're not talking about the DC Comics character.

Similar to how  there are several reasons for seeking a bank loan in the conventional finance system, there are also just numerous reasons for seeking a loan through a lending protocol.

Loans are sometimes required to meet immediate needs and do not always imply that the borrower would take a long time to repay.

Considering that collateralized crypto loans may not always be the best option for borrowers, there was a need to implement a system that welcomed other procedures if crypto loans were to fully outperform conventional lending systems.

Flash loans are another sort of crypto loan. Unlike collateralized loans, you do not require collateral to access flash loans. Flash loans are uncollateralized loans. 

Doesn't it sound good? And it's no a fairy tale at all. You can simply obtain a loan, use it for your intended purpose, and then repay the lending protocol without having any collateral on the line.

But how do lending protocols ensure that people take crypto loans and repay them? Well, they make sure that borrowers can complete both access to loan and repayment back to the protocol within a single 

Oops! I didn't mention smart contracts before now (this is because I want this read to be as straightforward as possible, with no technicalities). it's, however, worth noting that the entire time we've gone about borrowing loans and paying them back in our example, we'd have been interacting with a smart contract.

A smart contract is a computer program that is developed to automate operations between a user and a protocol if specific conditions are met as specified in the smart contract.

Smart contracts can determine whether you have adequate collateral to obtain collateralized loans and whether you can repay a flash loan in a single block

I've bored you enough with that, let's get into why anyone would need a flash loan in the first place.

Arbitrage trading opportunities exist in cryptocurrency trading. Arbitrage opportunities exist when the price of the same crypto asset differs between exchanges. These price disparities across exchanges could be leveraged to generate a profit.

If you notice an arbitrage opportunity but lack the funds to capitalize on it, you could simply take a no-collateral flash loan, trade crypto across exchanges where there is arbitrage potential, and then pay back the loan plus interest in a single block.

Accessing the flash loan will be denied if the smart contract cannot confirm that the arbitrage can be completed in a single block.

An hypothetical asset, say $XXX, trading at $10 on one exchange and $9.7 on another is an example of an arbitrage opportunity where flash loans can come in handy. There is a $0.3 pricing differential here, which gives an arbitrage opportunity and profit possibility when done in sufficient quantities.

You may apply for a flash loan and receive $10,000 with a 3% interest rate. Purchase $XXX worth $10,000 from an exchange trading at $9.7 and sell the same asset on an exchange trading at $10. You'll end up with $13,000 after this arbitrage trade, according to a simple maths calculation. You must repay the $10,000 loan plus $300 for the 3% interest charged on the loan. After you refund this, you will be left with $2,700, which is your realized profit for taking advantage of the arbitrage opportunity.

This possibility is made available without requiring any collateral; it easily outperforms conventional lending methods if you’re asking me.

Returning to our original $ETH for $USDC collateralized loan example, it's likely that you may want to switch your locked up assets for assets you believe have better stability. In this case, you may anticipate $SOL will experience more stability than $ETH in the near future, or you wish to hedge against a fud present with $ETH.

Utilizing flash loans gives you access to switch between collateral.

Assume you've decided to switch your locked up $ETH to $SOL. You'll need to gain access to a protocol that provides flash loans. You come across one that is charging 3% APR on flash loans. You can then obtain a $100 USDC flash loan and repay the lending protocol that has your $500 ETH locked up. The next step is to swap your $500 in ETH for $500 in SOL (let's pretend they're easily interoperable). You can now return to the initial lending protocol and exchange your $500 in sol for $100 in USDC. Get the USDC and return it to the protocol where you obtained the flash loan. The $100 in flash loan will cost you additional $3 in interest based on our example. Presto! You're ready to go. You can go about your day knowing well that you've locked up the collateral asset of your choice.

Switching collateral is not a popular topic in the conventional lending system. In most circumstances, switching between collaterals is impossible due to the lengthy paperwork process and the very strict procedure for applying for loans.

DeFi is presenting an option that would only exist as a pipe dream in conventional finance.

Yup! Sometimes you just want to self-liquidate and take your L's while the stakes are still low. Isn't that the rule of life? Sometimes you win, and sometimes you just can't get around it.

You remember the line that says, "give the lending protocol the option to sell off  a borrower’s crypto asset" if borrower hits asset drawdown limit?

What if there was a method to get out of your position before it dropped below $100? Could you accept it?

Well, flash loans allow you to do just that. 

In our $ETH and $USDC scenario, suppose your $ETH has plummeted to $350 and you believe it will fall further. You can obtain a $100 USDC flash loan from a protocol that supports it and pay the protocol that holds your $ETH. The $ETH can then be exchanged for $USDC to liquidate your stake, which is now only worth $350. You repay the flash loan with interest, leaving you with nothing less than $200. This will be the best case scenario if $ETH maintains its downward spiral, which would have resulted in an automated liquidation by the lending protocol, which is the worst case scenario.

DeFi continues to improve cryptocurrency's utility, taking it away from the conventional "speculative use case" and shedding more light on the numerous possibilities that the world of cryptocurrency enables.

Perhaps NFTs, GameFi, and the Metaverse are the buzzwords in the web3/crypto community right now, I'm confident that DeFi will have a home in web3 for everyday crypto use as well.

Figured out which sort of crypto loan is best for you?

Since the goal of this piece is to help you grab the concept of crypto loan in the easiest way possible, no precise lending protocols are mentioned. You should look into lending protocols such as 

. Though I didn't mention them in this article, you'll find their use remarkably identical to the examples and explanations in this piece.

CRYPTO LOANS - introduction to a DeFi masterpiece

“Web 3”…..“WEB 3.0” or just “web3!”

While these variations refer to the same thing, you've probably seen them used in diverse contexts and can't seem to escape hearing about it, especially if you're an enthusiast of blockchain technology and its product. 

Yup, it's because the concept is that important.

If you've ever spent time reading about web3, I must commend you for choosing to be one of the 68 million people who are interested in blockchain technology and its product.

It's, however, important to understand that this piece does not discuss the evolution of the web and some history on web3; history is boring. It's a piece written with the intent to help you to keep up with web3 developments, moving on.

And yes.....this read is beginner's friendly. Cheers to having a good read!

 is a novel and intriguing idea, many people have associated it with fantasy and consider it as if it were a miraculous discovery. Perhaps you've been on that train for a while as well. It's time to get off the train, buddy.

Web3 is many things, but it most certainly isn't a fantasy.

Web3 is a synthesis of various advances in reality.

It's best to be aware that the concept incorporates other underlying advancements rather than just the next phase of "web/internet development." It truly is an 