This week, we launched The Web3 Index, an entirely new kind of crypto benchmark that uses objective metrics to track the performance of Web3 protocols, beginning with the emerging and increasingly important category: the work protocol.
Also known as "service", "middleware", or "infrastructure" protocols, these are token-coordinated, distributed networks on which developers are building Web3 applications. Developers turn to these networks for resources (e.g. computing power, bandwidth, storage, indexing, and data services) they would ordinarily have to source -- at a much higher cost and with greater trust assumptions -- from centralized providers.
The Web3 Index is designed to help you see past the hype around Web3 and identify the protocols generating real fees for doing real work. Drawing on open-source data, it ranks protocols based on the fees they are generating for providing services.
By highlighting protocols that have proven their utility, the index aims to be of value to a wide range of users, including:
We've set out to make The Web3 Index as simple and readable as possible, but there are a few points to consider when consulting it and/or citing it.
Unlike many other benchmarks in the crypto space, the index does not weight protocols according to the market value or performance of their native tokens. It instead assesses projects based on a fundamental index methodology. This reflects our conviction that empirical metrics, such as demand-side fees and usage data, are a far better reflection of a project's intrinsic worth than are market gyrations.
The second point to stress is that while The Web3 Index will expand, over time, to cover the whole Web3 spectrum (e.g. application layer protocols), it will initially be confined to developer-facing work protocols comprising the Web3 infrastructure layer. Once the index reaches 10 work protocol listings, it will broaden out to the rest of the Web3 universe.
Here are the first six listings:
Learn more about the index here.
For a project to be listed on The Web3 Index, for now, it must be a developer-facing protocol that fits into the work protocol category of web3.
And because the index depends upon open-source daily fee data for rankings, protocols hoping to be considered for the index must provide auditable data in a format the application can consume. There are a few ways to do this, explained in detail here.
Protocols will be evaluated on whether they have exposed the right API/data for the integration, whether their "fees" are truly representative of usage by developers, and whether they fit within the work protocol category the index is initially focused on.
Ultimately, though, the decision on whether to list a project rests in the hands of the protocols already listed. Initially, voting will be coordinated informally by Discord and based on a simple majority rule. Each listed project's representative gets one vote.