What Exactly Is An “Infrastructure Provider” In Web3?

While most people do not yet fully understand the term “Web3”, fewer still will comprehend the meaning of a Web3 “infrastructure provider” - shortened to “infra” within crypto circles. But these are essential terms that people need to familiarize themselves with. They will represent the underlying infrastructure upon which blockchains will be built and play a critical role in how information is stored, sent, and received.

The mistakes of the previous era, with an over-reliance on centralized technology storage, cannot be repeated. This is why people need to think deeply with regard to the technology they use, where their information is going, and how it is stored.

Web3, built on distributed ledgers, provides a series of decentralized protocols to enhance development. This leads to dApps, smart contracts, DAOs, AI, machine-to-machine communication, and many new paradigms that can disrupt older models.

But even dApps, smart contracts, DAOs, AI, and M2M devices are surface-level technologies. What do they run on, and where is the information stored?

Building Web3, Within Web3

The central engine of Web3 has mainly distributed ledgers. These ledgers are essentially a new form of database where information is automatically recorded and open to public viewing, but without the element of personally identifiable information.

Anybody can deploy a “node” and take part in a given blockchain ecosystem. But this is like saying that anybody can purchase their own server and self-host their own blog. Nobody ever does - they use a cloud provider. As do most businesses.

In this sense, most Web3 infra companies could also be called “node providers”. They remove a very time-consuming step of the development process by providing easy node access - nodes being the primary point of infrastructure in Web3.

In order to build and scale their applications, Web3 developers will often use an infrastructure provider. Infura is a case in point. This provider is mainly focused on Ethereum development. The issue is that it could potentially lead to the same problems we saw within Web2, with restricted access to your own information.

To sum up, infrastructure providers basically allow Web3 developers to build and develop at scale. They are low-cost and offer RPC endpoints so that calls/requests can be made to a given blockchain network. But the priority is that this ease of development does not come at the expense of centralization. If it does, alternative options are needed.

Centralized Infra Providers

Infura is a centralized infrastructure provider. This means that while developers get many benefits, they don’t have full ownership or autonomy. For instance, access to Metamask was recently restricted to certain jurisdictions. This was because Metamask relied on an Infura API for a portion of its functionality.

While this may not sound like the end of the world, it bodes ill for all Web3 applications. Metamask is the biggest and most widely used of all decentralized wallets, a prominent application for making purchases from decentralized exchanges and NFT marketplaces. Infura has since publicly apologized and has reconfigured its API, but the point is that no commercial entity should have this kind of authority.

OpenSea users were also affected due to the Infura API. Opensea is a huge NFT marketplace. Both Metamask and OpenSea advertise themselves as decentralized. But if they rely on centralized node providers, this is not the case. An application is only as decentralized as its most decentralized point. As one Twitter user commented:

“If Metamask/Infura is open and willing to block countries like Venezuela by IP addresses, it's only a matter of time until they are forced by regulators to censor individual people's IP addresses. We need alternatives immediately, hoping that Alchemy and others don't do this”

Decentralized Infra Providers

There are no fully decentralized infrastructure providers right now. This makes sense when you consider that we are still in the early stages and experimenting with many different tools, applications, and networks to see which ones really work.

Still, many are far ahead of the curve. Ankr is currently all set to become the world’s leading infrastructure provider. While Infura, Alchemy, and Moralis often come to mind, Ankr has multiple advantages for developers. These include:

• RPCs - Ankr is the leading RPC provider, at 15. This means developers have access to 15 supported blockchains, instead of only one or two.
• Cost - Ankr is very cost-effective. Its premium plan allows unlimited network requests for a fraction of the price compared to other providers.
• Decentralization - Ankr is not yet fully decentralized, but is moving in that direction. Infura, meanwhile, is owned by ConsenSys.
• Position - Ankr is currently the main infrastructure partner for Binance, Polygon, and Fantom, which are massive projects.
• Functionality - Ankr offers products for enterprises, developers, and DeFi stakers. It offers a full suite of tools and multiple chains, even gaming SDKs. Most Infra providers simply offer nodes without any advanced functionality for building or scaling.

Realistically, Web3 can only be built when the issues of centralization are fully eradicated. Ankr is a leader in the space - when it does migrate to a fully decentralized protocol, then we should finally be able to build without concern. And the Web3 development world will never look back.

Infrastructure Providers Pave Path To Web3

Infrastructure providers can offer nodes, protocols and tools to freely build and scale in Web3. There has already been a substantial shift and we are globally moving away from centralized service providers toward decentralized protocol services.

Infrastructure providers offer the best way to develop decentralized applications. They are critical to the growth of Web3. As infrastructure, they can be likened to roads that support the traffic (blockchain protocols) that contain information (people).

There is a long road ahead, but good infrastructure makes the journey easier for everyone.