Web3 is still in its early days, but Gateway.fm is re-envisioning how the industry must proceed to reach mass adoption. Even then, there are many crucial issues to overcome.
A decentralized blockchain node developer, the Norway-based company recently raised $4.6 million from a group led by Lemniscap.
Its offerings begin with Gateway Access, a dedicated remote procedure call node service built for scale. Gateway Access currently supports ETH, Fantom, NEAR, and Gnosis. (Aka RPC nodes, remote procedure calls are computer servers allowing users to read blockchain data and send transactions to different networks.) Gateway.fm also hosts a staking service on ethereum and Gnosis and collaborates with protocols and blockchains to foster adoption.
Some current Web3 roadblocks
Co-founder and CTO Igor Mandrigin said Gateway.fm is trying to decentralize Web3 from the bottom up. In its purest form, that means software running on each computer on the network.
We’re a long way from that ideal, Mandrigin added. More services are outsourced, like data centers in the cloud. He understands such moves because the software that powers blockchains can be challenging to manage.
Some decentralized providers address this by running an open or semi-open set where a DAO determines who can participate. Such systems also require “relayers” to transfer information. One problem with this structure is it doesn’t track the locations of nodes, Mandrigin explained. That brings a higher level of needed trust into the relationship.
Gateway. fm solves this by creating independent data centers near their clients in Northern Europe, Sweden, Switzerland, Germany, and Singapore. If one data center stops participating, activity can easily be transferred to another. Less infrastructure is required, and that keeps costs down. (Participating centers must meet security and uptime requirements.)
These locations offer stability, Mandrigin said. Switzerland is a proven center for blockchain innovation from a legal standpoint and an interest in technology. Scandinavia takes a slow and transparent approach.
The keys behind the mass adoption of Web3
It’s early days, and Gateway.fm is carefully picking its spots, Mandrigin cautioned. The goal is to foster mass adoption, so the product must be optimal. Master a few aspects and keep building instead of attracting everyone simultaneously.
It’s a lesson Mandrigin and co-founder and CEO Cuautemoc “Temoc” Weber learned earlier in their careers when they worked with browsers and cloud technology. They expected certain uptimes and knew they’d need assurances if companies changed technologies. Solid infrastructure helps provide that.
“These things are needed because if you want people to build on your blockchain or protocol, they will expect things like RPCs, testnets, and documentation,” Mandrigin said. “If you don’t have them, it’s game over. If you have them, then maybe people will build and expand.”
Mass adoption of Web3 is likely years away, but that doesn’t mean significant progress cannot happen in the short term, Mandrigin said. Progress sometimes comes in waves. Recent improvements have been seen in lower energy consumption, infrastructure, and tools for creating and recovering accounts.
One key area that needs to improve is communication between layers, Mandrigin said. Foster a secure and efficient way for layers and chains to communicate, and many can collaborate.
Gateway.fm addresses this by participating in the core development of the protocols they are involved with. Consistent communication during the design and development stages allows easier adjustments that improve interoperability. Provide strong tech support.
Meeting needs vs. attracting investors
These are the issues and discussions typical of an industry just getting into the stadium parking lot, never mind the early innings. But it causes a problem when courting investors, Mandrigin said. These are dry yet crucial issues that must be solved before the more exciting tasks can be addressed.
But it doesn’t excite investors.
“It hurts the industry right now,” Mandrigin said. “The projects failing to have money from somewhere is a bit of a shame; it slows it down. But I think more investors will understand it with time.”
Perhaps the recent bull market clouded judgment. One certainty is that money easily flows, sometimes without the proper due diligence. Now that the market has changed, the battle scars will bring wisdom.
“The bear market is, I think, good for that,” Mandrigin said. “That’s when investors and the projects will have to figure out if there is an actual product market fit of what they’re building. Is this something markets need, or is it tech for tech’s sake?”
“We’ve talked to many VCs, and what we see in this space is that not many investors today in Web3 understand infrastructure,” Weber said. “It is a bit of a shame because this is the foundational level to build the stack on top of. Investors are interested in L1s, protocols, and tokens. They don’t care too much about the underlying infrastructure, which, if you look at tech before that, it’s been pivotal.”
The industry cannot scale without good infrastructure, which needs investment. Without both, startups will struggle because they’ll need staff to create mobile applications and smart contracts. Then come auditors, back-end developers, and folks to run the infrastructure. That’s a 10-person startup team.
“If we want to get mass adoption, we need to cater to both new builders and in the space and also to companies who want to integrate this,” Mandrigin said. “This is where infrastructure becomes very important.”
The Web3 labor shortage
Just as important is having enough skilled workers, and beyond smart contract developers, there’s a shortage.
“That’s where the problem lies,” Mandrigin said. “You cannot customize the nodes because there are no people who understand how they run. It’s hard to hire for DeFi protocols. It’s hard to hire DevOps who understand how to run nodes or security people.”