5 Ways Web3 is Making Positive Social Impact This decentralized system is not only enabling financial transparency and making enterprises more efficient but also creating a positive social impact in the world. Simply put, it is transforming several parts of the society.

Web3, a decentralized, blockchain-based digital environment, is a term you must now be accustomed to. This ecosystem which was valued at USD 3.3 billion in 2021, is expected to reach USD 82.72 billion by 2030, according to Statista. But, Web3 is more than just the funding amounts and number of startups. It aims to be a largely accepted system across industries, processes, and the world and for all good reasons.

What sets Web3 apart from any other technologies are its five core values- ownership, security, decentralization, transparency, and verifiability. All these combined make your digital experience a transparent and safe one.

This decentralized system is not only enabling financial transparency and making enterprises more efficient but also creating a positive social impact in the world. Simply put, it is transforming several parts of the society.

How is Web3 creating social impact?

The nature of this decentralized protocol has given birth to several use cases and projects where it has positively impacted society at large. Here are five ways how Web3 is creating social impact-

1. Empowerment through decentralization- Currently, any data of ours online can be used with our consent and knowledge but not when it comes to the Web3 space. This is where ownership over data plays a big role when endorsing the space. Web3 offers users greater control over their data and privacy with some players and platforms offering incentives and content tokenization when users opt to share their data or partake in data sharing.

Decentralized protocol prevents power concentration in a few hands and also advocates free speech and reduces censorship.

2. Quadratic Funding- Fundraising from a Decentralized Autonomous Organization or DAO is a common thing in the Web3 ecosystem. Simply put, startups or organizations are not controlled by a handful of individuals but through a group who have invested in it and hence have a say in the decision-making.

Quadratic funding is a form of democratized fundraising where the aim is to promote fair and inclusive funding for the public good. The idea behind this is to match modest individual contributions with larger sums from sponsors or contributors.

3. Crypto Philanthropy- A new form of philanthropy, cryptocurrency and non-fungible token donations make it easy for donors to track through blockchain and make direct donations to social projects and initiatives.

The Giving Block, a crypto philanthropy platform, was founded in 2018 by Alex Wilson and Pat Duffy. In 2022, an average nonprofit registered on the platform raised USD 26,000 in crypto, with a few raising even millions. Over 50 per cent of America's top 100 charities are now fundraising via crypto and NFTs. In August, Binance Charity partnered with Hope for Haiti to raise USD 100,000 in cryptocurrency, with the former donating USD 50,000 in cryptocurrency.

Fidelity Charitable reported that about 45 per cent of cryptocurrency investors donated USD 1,000 or more to charity in 2020. Some of the notable platforms for engaging in crypto philanthropy are Givepact, Endaoment, and The Giving Block.

Nonprofits such as UNICEF, Save the Children, The Leukemia and Lymphoma Society, United Way Worldwide, CARE, the American Cancer Society, Mental Health America, and Feeding America are now accepting cryptocurrency donations.

4. Environmental sustainability- One of the key ways how Web3 can help create environmental sustainability is through building resilience against climate risks. Some of the ways that Web3 can create social impact in sustainability include carbon credits, energy infrastructure, parametric insurance, supply chain transparency, and circular economy.

5ire is a 2021-established fifth-generation blockchain ecosystem which aims to bring s paradigm shift from a for-profit economy to a for-benefit economy where sustainability and social impact form the core of the startup. "The heart of the blockchain is consensus, and 5ire's consensus follows what you call a sustainable proof of stake model, which nobody else is following. The way we have designed the consensus architecture is that anybody who follows more sustainable practices has a higher chance of making more money in the system," shares Pratik Gauri, founder and CEO, 5ire.

Rahul Pagidipati, CEO, ZebPay, echoes the PoS championing among crypto players, "First, transitioning from proof-of-work (PoW) to proof-of-stake (PoS) consensus algorithms reduces energy consumption significantly. PoS validates transactions based on the amount of crypto held, requiring minimal computational power. One of the best examples of this transition is the "Ethereum merge". By transitioning from a PoW to a PoS consensus mechanism, the Ethereum blockchain's energy consumption was reduced by more than 99%. Second, promoting renewable energy sources for mining operations can reduce reliance on fossil fuels, making the process eco-friendly. Moreover, leveraging blockchain technology to enhance transparency in supply chains can encourage sustainable practices, such as verifying green energy usage and responsible mining. Lastly, supporting projects that offset carbon emissions generated by crypto activities through reforestation or renewable energy initiatives further contributes to a greener future for the crypto industry."

5. Addressing social issues- NFTs and crypto are being leveraged to bring attention to social issues critical to society. LegalAbortion.eth is an ETH wallet by UnicornDAO which functions as a donation centre for traditional reproductive rights institutions. Cowgirl DAO launched an NFT collection with the intention of fighting back against the overturning of Roe V. Wade in the United States. The funds raised are diverted to nonprofit organizations supporting abortion rights.

Chinese dissident artist Badiucao's five-piece NFT collection, Beijing 2022, sheds light on the oppression of the Chinese government on the Tibetan, the Uyghur genocide, the dismantling of democracy in Hong Kong, surveillance systems, and the COVID-19 pandemic.

The collection was created as a collaboration between Gray Area Foundation for the Arts and the Human Rights Foundation.

"When conventional galleries and venues are too intimidated to exhibit my art due to the threat from Beijing, the Internet has been a last resort for artists like me. NFTs and blockchain technologies not only provide a safe way to offer critical financial support to dissident artists but serve as an important immutable public record outside of authoritarian tampering and control," shared Badiucao in a Grey Area Foundation blog.