What is Smart Layer? How to integrate Web3 with real-life scenarios?
The infrastructure Smart Layer, which has been developed since 2018, focuses on enhancing the scalability of token functionality. It integrates Web3 with real-life applications, bringing the composability of tokens into the real world. This article is based on official documents and whitepapers. (This article is not investment advice)
Contents:
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What problem does Smart Layer aim to solve?
Traditional Web2 integration is limited to three functions
Insufficient infrastructure for integrating real-life applications with Web3
Goal: Highly integrated use cases for tokens
Solution provided by Smart Layer
Smart Tokens – intelligent tokens
Middleware architecture in Smart Layer
Successful Cases
Smart Layer provides Web3 integration solutions for small businesses
Web3 integration is the privilege of large companies
Smart Layer fills the gap in integration needs for small companies
While it may seem that Web2 has already achieved most of its integration, this is not the case. Most websites still rely on three main types of integration: login, social media sharing, and checkout functions. The most common tools for these three functions are Google ID, Twitter, and Apple Pay.
Although integration is known to be fundamental to internet functionality, existing websites or applications usually cannot integrate more than three functions. This phenomenon is known as the “Limit of 3” problem, and there is currently no good solution for it.
Companies aim to create better user experiences and improve business efficiency. However, the complex integration and data sharing regulations of existing Web2 hinder such developments.
Web3 itself is characterized by composability and should be able to solve the problems of Web2 mentioned above. This is what many Web3 supporters advocate. However, it has not become mainstream yet, and the question is why?
The token hype of ICOs in 2017 and the NFT bull market in 2021 both treated tokens as speculative assets. These two waves failed to provide mainstream use cases beyond DeFi and digital collectibles, resulting in the absence of killer applications.
The next wave of tokenization is not about assets but experiences.
Tokens can be combined with smart contracts to demonstrate high composability and applications. The market also expects to combine more real-life applications and problem scenarios in the future. However, the infrastructure to achieve the latter is currently severely lacking.
Although it is known that integrating real-life scenarios is important, there is still no perfect way for general websites or applications to read on-chain data. The on-chain logic of tokens is also not suitable for extension to external services, which leads to the existence of existing tokens merely as asset proofs.
Blockchain currently only provides trust guarantees and does not allow tokens to be directly used on any off-chain websites.
If a high level of integration between Web3 and real-life can be achieved, imagine the following scenario using airline tickets as an example.
In the future, airline tickets can be tokens that demonstrate value within their issuing platforms (already achievable with Web3). But imagine that this ticket can be integrated across different systems. The ticket can update a user’s travel status on social media, guide the traveler to the boarding gate using Google Maps, or automatically communicate flight change information to the hotel or car booking system reserved by the user.
These simple applications should have been available, but due to the isolated nature of the internet, they have not been realized. The existing centralized solutions only provide fragmented solutions.
The Smart Layer team specifically provides two main components to bring the scalability of Web3 tokens into the real world:
Introducing a new token standard (Smart Tokens):
The current token functionality is limited by smart contracts. Smart Layer solves the problem of expanding token functionality by introducing the TokenScript, which is based on the new token standard EIP-5169. This allows tokens to provide more functionality beyond representing assets and enables more composable business services.
Web2 and Web3 Middleware (Smart Layer):
For Web2 services that need to integrate token functionality, direct integration with underlying smart contracts is required. The lack of relevant infrastructure currently results in low scalability. Smart Layer acts as middleware, allowing Web2 services to embed advanced token functionality into existing products.
Smart Tokens are the key components of Smart Layer, aimed at facilitating interaction between applications across multiple platforms. Smart Tokens are not just valuable digital assets; they expand token functionality and support the applications of external applications.
For example, a smart token for a car can be used between different applications and merchants, seamlessly connecting car owners with various vehicle services and features. It can be used on a car rental website to authorize short-term access keys for customers or on an insurance website to report the latest location of the car and receive immediate roadside assistance. This level of integration and practicality is different from traditional tokens or NFTs, and it is the uniqueness of smart tokens and Smart Layer.
Specifically, smart tokens add a layer of TokenScript code to the original token contract. This provides operational logic for tokens beyond the contract layer and allows traditional service providers and applications to read or operate specific token logics.
TokenScript adds a layer of code that transforms tokens into programmable objects that can provide services to the outside world. This is something that smart contracts themselves cannot do. While smart contracts define rules, they do not provide services based on these rules.
Smart Layer is the final step in bringing the composability of tokens into the real world.
For the intermediate layer linking Web2 and Web3, a centralized network design framework is also introduced:
Blockchain:
Provides the execution environment for smart contracts and the transaction rules for tokens. It also maintains snapshots of token operations for verification. Smart Layer can operate on any blockchain that can provide the above functions.
Anchoring Nodes:
Responsible for network governance and security. These nodes, operated by reputable organizations selected by the Smart Layer DAO, maintain network stability and security. They verify whether service nodes perform their tasks properly and issue proofs. Well-performing nodes can receive mining rewards.
Service Nodes:
Responsible for providing TokenAPI to implement the aforementioned service integration. In addition to mining rewards, service nodes can earn fees by providing services. This means that when websites, applications, and token issuers request data, they pay for the services.
These components work together to create a dynamic, secure, and efficient network, forming Smart Layer, which provides the data and operational logic required for highly integrated solutions.
Last year, the Smart Token Labs project introduced a new marketing concept for the Open Loyalty loyalty program at EDCON 2023.
The project sent URLs to attendees as ticket proofs. In addition to proving ownership of the ticket, these proofs were stored in the user’s browser through Smart Layer. This allowed the holders to verify ownership without opening a wallet or signing transactions, simply by using the URL in the browser.
This successfully improved the user experience for users and saved costs for the brand by not having to build a loyalty program system.
In fact, the market is not lacking in Web2 integrating with Web3 cases. Major brands, including Starbucks, Visa, Nike, and traditional financial institutions like JPMorgan Chase and HSBC, have already tried to integrate blockchain into their own products and marketing activities.
However, most existing cases are limited to specific use cases (such as Starbucks loyalty programs) or specific blockchain networks that have already been integrated (JPMorgan Chase’s blockchain integration platform based on the Quorum network). Currently, there is no comprehensive and all-encompassing solution in the market. Such demand is crucial for small companies without resources.
Large companies have been trying first, leveraging their financial advantages, and most of them have achieved good results. However, small companies currently do not have the opportunity to try. Smart Layer fills the missing layer in connecting Web2 services to Web3, providing a complete and low-cost solution that allows anyone to try.
Smart Layer supports most blockchains and can be used in any use case as long as the code can be written. The universality and scalability of Smart Layer are the advantages that allow it to enter the market for small and medium-sized enterprises. (This article is not investment advice)
Smart Layer
Smart Tokens
Web3
User experience
Loyalty program
Integration
