Introduction To Web3(Class Guide)

 What Is Web3
 What is Cryptocurrency
 What is Blockchain
 Sections Of Web3
 Bitcoin
 Ethereum
 L1-L2-L3(L=Layer)
 Dex & Dex Wallets (Decentralized Exchanges)
 Cex (Centralized Exchanges)
 ______________________________________
 Spots/Funding/Futures
 Airdrop
 Understanding Airdrop
 Materials needed
 Security
Web3 is a term often used to describe the next iteration or evolution of the
internet. While there isn't a universally agreed-upon definition, it generally
refers to a version of a decentralized internet built on blockchain technology.
The current internet, like google, WhatsApp, Instagram and the likes are often
referred to as Web 2,
Web 2 is characterized by centralized platforms where your(users) data is
controlled by a few large corporations, but Web3 seeks to change this by
introducing decentralized protocols, applications, and systems that put users
back in control of their data and digital identities. Blockchain technology, which
underpins Web3, enables decentralized consensus, tamper-proof record-
keeping, and smart contracts. This decentralization aims to create a more
transparent, secure, and censorship-resistant internet.

Key elements of Web3 include decentralized finance (DeFi), decentralized

autonomous organizations (DAOs), non-fungible tokens (NFTs), decentralized
social networks, and more.

Where DeFi entails mostly the financial aspect of this ecosystem, like your
crypto tokens, funding, yield staking, lending and borrowing etc.

DAO on the other hand is like a community of leaders, governors and selected
few members to certain project and protocols. They create structures often used
to manage and govern DeFi protocols, allowing users to participate in protocol
upgrades, fee distribution, voting and other governance functions.

NFT’s, you must have at one point heard of the word, it went mainstream in
2021 and there was mad adoptions, hype momentum and speculations
surrounding it. I once thought NFT was just a digital picture or image, but a
non-fungible token(NFT) represents a unique digital asset that cannot be
replicated or replaced with something else, it depicts ownership of digital items.
It can be an in-game asset, for the gamers here, your legendary or mythic gun
can be an nft, it the creator tokenize it and publish it on blockchain. It can also
be a music or video, if the artist tokenize its sale or ownership as nft. Like the
way you buy music on iTunes. You can buy it on nft marketplaces to own and
use as you desire.

These applications leverage blockchain technology to operate without reliance

on centralized intermediaries, giving users greater autonomy and ownership
over their digital assets and interactions online.
Cryptocurrency is a type of digital or virtual currency that uses cryptography for
security and operates on decentralized networks, typically based on blockchain
technology. Unlike traditional currencies issued by governments (such as the
US dollar or the euro), cryptocurrencies are not

controlled by any central authority, such as a central bank. So, you can see from
the above explanation of web3, that cryptocurrency is just a section.

Properties Of Cryptocurrency
Decentralization: Cryptocurrencies operate on decentralized networks of
computers, known as blockchain, which eliminates the need for a central
authority like a bank to oversee transactions.
Security: Cryptocurrencies use cryptographic techniques to secure transactions
and control the creation of new units. This ensures the integrity and security of
the currency.
Transparency: Transactions on a blockchain are transparent and can be viewed
by anyone. This transparency helps prevent fraud and ensures the integrity of
the system.
Anonymity: While transactions are transparent, the identities of the parties
involved are often pseudonymous, providing a certain level of privacy.
Limited Supply: Many cryptocurrencies have a finite supply, meaning there is a
maximum number of coins or tokens that can ever be created. Bitcoin, for
example, has a maximum supply of 21 million coins.
Digital nature: Cryptocurrencies exist only in digital form and do not have a
physical counterpart like paper money or coins.

Cryptocurrencies can be used for various purposes, including online purchases,

investment, remittances, and as a means of transferring value across borders.
However, they are also subject to regulatory scrutiny, price volatility, and
security risks, which are important considerations for anyone looking to use or
invest in cryptocurrencies. Due to the decentralization and anonymity nature of
crypto, they are many looking to exploit and use this asset for fraudulent
activities like money laundering, theft, financing terrorists groups and all that,
which a lot of regulatory bodies are trying to clamp down on especially the SEC.
Next, what is blockchain
Blockchain is a decentralized ledger technology that records transactions across
multiple computers. It forms the underlying technology behind cryptocurrencies
like Bitcoin, but its potential applications extend far beyond digital currencies.
Its more like a digital book keeper or accountant that keeps details of every
transaction or asset on web3. NB wallet address is a unique identifier associated
with a crypto wallet. Its more like your account number. So If I send 200$ USDT
to an address. A transaction(txn) hash is generated, like a receipt, that gives
detail of time it’s sent, time it’s received, the sender wallet address, the receiver
wallet address, the network used and the status of transaction from failed or
pending to completed.

Sections Of Web3
Decentralized Finance (DeFi): DeFi refers to a variety of financial services and
applications built on blockchain technology, aiming to eliminate intermediaries
like banks and enable peer-to-peer transactions. DeFi platforms facilitate
lending, borrowing, trading, and other financial activities without the need for
traditional financial institutions.
Decentralized Applications (dApps): These are applications built on
decentralized networks like Ethereum, Solana, Avax which operate without a
central authority and are resistant to censorship or downtime. DApps span
various industries and use cases, including finance, gaming, social media.
Non-Fungible Tokens (NFTs): NFTs are unique digital assets that represent
ownership of a specific item or piece of content. Unlike cryptocurrencies like
Bitcoin, which are fungible and interchangeable, each NFT has distinct
properties and
cannot be replicated. NFTs have applications in digital art, collectibles, gaming,
virtual real estate, and more.
Decentralized Identity (DID): DID systems enable individuals to have full control
over their digital identities, allowing them to manage and share personal data
securely without relying on centralized identity providers. These systems use
blockchain technology to ensure privacy, security, and interoperability across
different platforms and services.
Blockchain Interoperability: Interoperability solutions aim to enable different
blockchain networks to communicate and share data seamlessly. This allows for
greater flexibility and scalability in building decentralized applications, as
developers can leverage the strengths of multiple blockchains while avoiding
vendor lock-in.
Decentralized Autonomous Organizations (DAOs): DAOs are organizations
governed by smart contracts and run autonomously on blockchain networks.
Participants in a DAO collectively make decisions and manage resources without
the need for centralized management or intermediaries. DAOs have the
potential to revolutionize governance, collaboration, and incentive structures in
various industries.

We have various sections of web3, DeFi, NFT, Dao, DApps meaning

decentralized application, they are applications built on various networks like
Ethereum, Solana, BNB and the likes, DID which means Decentralized Identity
example of this are ENS Ethereum Name Service, SNS Solana Name Service it
allows you to rename your addresses in human readable terms or name like
Nimah.eth or Teror.sol. So instead of that gibberish long ones like
0xa072d876355f5ce5a2009fcf85d328e63630c82e.

What Is Bitcoin
Bitcoin is a digital or virtual cryptocurrency that operates on a decentralized
peer-to-peer network known as blockchain technology. It was invented in 2008
by an anonymous person or group of people using the pseudonym Satoshi
Nakamoto and was released as open-source software in 2009.
Transactions are verified and recorded on the blockchain, a public ledger
maintained by a network of computers (often referred to as miners) running
specialized software. And we all understand what blockchain is now!
One of the key features of Bitcoin is its scarcity. There will only ever be 21
million bitcoin in existence, making it a deflationary asset, which means more of
it can never be printed or created. Bitcoins can be acquired through various
means, including purchasing on cryptocurrency exchanges, accepting them as
payment for goods or services, or mining.
Bitcoin has gained significant attention and adoption over the years, serving as
both a digital currency and a store of value. Its price has been highly volatile,
experiencing both rapid increases and sharp declines. Additionally, Bitcoin has
spurred the development of thousands of other cryptocurrencies, collectively
known as altcoins, and has influenced the broader blockchain and
cryptocurrency industry.
What is Ethereum
Ethereum, first is a digital currency, it enables the creation and execution of
smart contracts and decentralized applications (DApps)
Ethereum's allows developers to build and deploy decentralized applications.
These applications can range from simple games and financial tools to complex
decentralized finance (DeFi) protocols, non-fungible token (NFT) marketplaces,
and more. It went live 2015, developed by Vitalik Buterin
It is mostly referred to as the mother of altcoins( usally used to represent tokens
neither bitcoin or Ethereum)

Layer. (Layer 1; Layer 2; Layer 3)

Layer 1 (L1):

This is the base or fundamental layer of a blockchain network.

Examples of Layer 1 blockchains include Bitcoin, Ethereum, Solana,


Avalanche, Cosmos and other mainnet blockchains.



Layer 1 protocols handle fundamental functions such as transaction

validation, block creation, and network security.


 It also allows other protocol and projects to build on them

Layer 2 (L2):
 Layer 2 solutions are built on top of Layer 1 blockchains to improve
scalability, speed, and cost efficiency.
 These solutions aim to relieve congestion and increase throughput
without directly modifying the underlying Layer 1 protocol. So most
times layer 2 are created to solve certain technical or operation issue on
the layer 1 blockchain.
 Examples of Layer 2 solutions include the Lightning Network for Bitcoin
and various scaling solutions for Ethereum like Optimism, Arbitrum,
Polygon etc
 Layer 2 solutions often provide faster and cheaper transactions by
moving some transactions off the main blockchain, processing them
separately, and then settling the results on the main blockchain.

Layer 3 (L3):
 Layer 3 encompasses applications and services built on top of Layer 2
solutions or other Layer 1, majorly DApps


Layer 3 applications can include decentralized finance (DeFi) platforms,

non-fungible token (NFT) marketplaces, decentralized exchanges (DEXs),


gaming platforms, and more.

Examples of Layer 3 applications include Uniswap, Jupiter, and various
NFT marketplaces like OpenSea, Tensor HQ etc


Layer 3 applications often benefit from the improved scalability and

reduced costs provided by Layer 2 solutions, enabling better user


experiences and broader adoption

A DEX, or Decentralized Exchange, is a type of cryptocurrency exchange that

operates without a central authority or intermediary. Because DEXs operate on
decentralized networks, they are resistant to censorship and regulatory
interference.
This allows users to trade cryptocurrencies freely without restrictions imposed
by governments or other centralized authorities. Users retain control of their
funds throughout the trading process. Just so you know dex are a type of dapps
There are several decentralized exchange (DEX) platforms in the
cryptocurrency space, each with its own unique features.

Uniswap: Uniswap is one of the most popular decentralized exchanges built on

the Ethereum blockchain. It operates using an automated market maker (AMM)
model, where liquidity providers contribute funds to liquidity pools, it enable
users to trade ERC-20 tokens directly from their Ethereum wallets. Erc20-
tokens relate to any token built on the Ethereum blockchain

SushiSwap: SushiSwap is a decentralized exchange forked from Uniswap that

offers additional features such as yield farming, staking, and governance
through its native token, SUSHI. It aims to incentivize liquidity providers and
community participation through its tokenomics and governance mechanisms.
PancakeSwap: PancakeSwap is a decentralized exchange built on the Binance
Smart Chain (BSC), offering low fees and fast transaction speeds compared to
Ethereum-based DEXs. It features an AMM model similar to Uniswap and
supports various DeFi functionalities, including yield farming, staking, and
token swapping.
Curve Finance: Curve Finance is a decentralized exchange optimized for
stablecoin trading and low-slippage swaps . Curve Finance is popular among
DeFi users for its stablecoin liquidity pools and low-cost transactions. Would
explain stable coin and slippage in later discussion
1inch Exchange: 1inch Exchange is a decentralized aggregator that sources
liquidity from multiple DEXs to offer users the best possible prices for their
trades. So this one here is like a middleman with connect to multiple Dex’s. It
finds and give you the best rate for the transaction you are looking to make.
Lets say you want to swap Ethereum to Arbitrum, you can go directly to
Uniswap to do that. But it might not have the best rate or slippage as at the
moment, instead of sourcing through various dex’s for best rate, aggregators
like 1inch can do that for you. In other words 1inch Exchange aims to provide
users with access to the deepest liquidity pools and the most competitive rates
across various DEX platforms.

Decentralized Wallet: Decentralized wallets are designed specifically for

interacting with decentralized exchanges. These wallets allow users to securely
store or hodl their cryptocurrency assets while also providing seamless access
to decentralized trading platforms. Most or all decentralized exchange trading
operations are funded through a Dex wallet. So you need to understand
Decentralized wallet holds the funds while Dex is the trading platform that offer
various services from swapping tokens to buying or selling, placing limit orders,
dca and more. Here are a few notable DEX wallets;

MetaMask is one of the most popular DEX wallets. MetaMask allows users to
manage Ethereum-based assets and interact with various decentralized
applications (DApps) and decentralized exchanges directly from their browser
or mobile device.
Trust Wallet is a mobile cryptocurrency wallet that supports a wide range of
cryptocurrencies and tokens, including those on different blockchain networks.
Phantom Wallet is a popular decentralized cryptocurrency wallet designed
specifically for the Solana blockchain ecosystem

Other wallets may include. Zerion, Argent, Backpack, Solflare etc

Note: Ethereum and Solana are Layer 1 token and blockchain.
Centralized exchanges (CEX) are platforms where users can buy, sell, and trade
cryptocurrencies using traditional fiat currencies or other cryptocurrencies.
These exchanges are operated by centralized entities and act as intermediaries.
Example of Popular CEX are: Binance, Kraken, Coinbase, Bybit, Huobi, OKX,
MEXC
While centralized exchanges offer convenience and liquidity, they also pose
certain risks, including security vulnerabilities, potential for hacking.
Additionally, some users may prefer decentralized exchanges (DEXs) for their
emphasis on decentralization, privacy, and control over funds(autonomy).
Explaining Stable coin, they are various types of stable coins ranging from
algorithmic stablecoin, asset backed stablecoin, crypto collaterized stable coin. I
will only be explaining one, which appears to be one with utmost importance, If
you want more knowledge on others, you can make research. So the asset
backed stablecoin are backed by reserves of fiat currencies, or other assets held
in custody by a trusted entity. Examples include Tether (USDT), which is backed
by reserves of USD, and USD Coin (USDC), which is backed by a reserve of US
dollars. We will come back to why this is the most important stable.
Slippage refers to the difference between the expected price of a trade and the
actual executed price. It often occurs as a result of volatility, order size and
other factors
So, i think with that we have come to the end of this session. Questions can start
coming in, if there is any
Tomorrow we will be concluding the last part of this class, which involves the
monetary aspect. And not to get you all hopes high, crypto is not a get rich quick
scheme. If you are looking to make millions in matter of weeks, sorry to
disappoint you. But on the optimistic side, its possible if you are on the right
track and right mind.

Spots/Futures
"Spots," and "Futures" are terms commonly used in cryptocurrency trading,
particularly on exchanges. They refer to different types of trading products and
mechanisms available to traders.
Spots:
Spot trading involves buying or selling cryptocurrencies for immediate
delivery at the current market price or via limit orders.

 Traders engage in this type of trading with objective of buying low and
selling high. And unlike futures it is quite less risky.


Spot markets are the most common type of trading markets on exchanges
and are where most trading activity occurs.


Futures:
"Futures" In the context of cryptocurrency trading, futures contracts allow
traders to speculate on the future price movements of cryptocurrencies without
actually owning the underlying assets.
 Futures contracts on cryptocurrency exchanges can have various
expiration dates and settlement mechanisms, including physically settled
and cash-settled contracts.
 Trading futures contracts allows traders to hedge against price
fluctuations, leverage their positions, and engage in speculative trading
strategies.
 It also involves the use of leverages or multiplier

A great way to start your web3 journey with zero capital is through airdrop, as
most of its task are completely free and offer rewards for participation.
Airdrop
In the context of cryptocurrencies, an "airdrop" refers to the distribution of free
tokens or coins to holders of a particular cryptocurrency. Airdrops are typically
used by projects to promote their cryptocurrency, increase its adoption, or
reward existing holders.
There are different types of airdrops:
Promotional Airdrops: These are conducted by new projects or established ones
to raise awareness about their token or platform. They distribute free tokens to
users who fulfill certain criteria, such as holding a minimum amount of a
specific cryptocurrency, following them on social media, or signing up for their
newsletter.
Hard Fork Airdrops: Sometimes, when a blockchain undergoes a hard fork (a
significant divergence in the protocol resulting in two separate chains), holders
of the original cryptocurrency might receive an equivalent amount of the new
cryptocurrency. Bitcoin Cash, Bitcoin Gold, and Ethereum Classic are examples
of cryptocurrencies that were created through hard forks, and holders of Bitcoin
or Ethereum at the time of these forks received equivalent amounts of the new
cryptocurrencies.
Community Airdrops: These airdrops are often organized by the community of a
particular cryptocurrency or token. Community members might decide to
distribute tokens amongst themselves as a way to promote the project or as a
gesture of appreciation for their support.
Holder Airdrops: Projects might distribute tokens to existing holders of a
particular cryptocurrency to incentivize them to hold onto their coins or to
reward them for their loyalty.

Airdrops can be an effective way for projects to bootstrap their communities,

increase liquidity, and distribute tokens fairly among potential users. However,
participants should exercise caution and thoroughly research the legitimacy and
intentions of the projects conducting airdrops, as there have been instances of
scams and fraudulent airdrops in the past.

Materials needed for airdrop

A laptop
This is quite important, as there are some site and task that can’t be done or
easily done on your mobile device Various extensions like wallets can be added
to sign or interact with the project you are arming.
We also have Galxe and guild task that are requirement to some protocol
eligibility for their airdrop.
Internet Access
A mobile device
Gas fee: These are fees usually used to approve or send transaction on your
wallet or on the blockchain. Ethereum in this instance has to be one of the
chains with the highest gas fee. In most cases gas fees are always the native
token of that chain… So lets say you want to send USDT on eth chain to
someone, USDT is the token you sending but it will require you to have existing
Eth in your wallet as fee for the transfer, same as on other chain and network
like solana, bnb and the likes
Dex Wallets most likely MetaMask and phantom
For those of you with zero capital. Airdrop will be the best place to start... For
those of you with capital, after your understanding of crypto, if you wish to
invest spot trading will be the best place to start. Futures is built and meant for
professionals only. As you will be up with or against Whales, Institution and very
well experienced individuals. Its subject to very high volatility, And assets can
be lost forever in the event of liquidation. If you do become a pro with good
capital, Futures also make millionaires! you can venture into it.