Dex223 Blog

Introduction

The development of any technology is not linear; the process proceeds with the accumulation of critical mass, followed by catharsis, boom, and then a decline in interest or seeming stagnation, and so on in an endless spiral of development.

The Internet is evolving along the same lines, first it was an iteration of Web 1.0, it was replaced by the Web 2.0 era of the Internet, marked by the infamous dot-com boom, and with the advent of technologies like AI, IoT, blockchain and cryptocurrency, the Web 3.0 era began. But in reality, we are firmly stuck in the Web 2.5 era.

What exactly is Web 2.5—and how does it bridge the gap between Web 2.0 and Web 3.0? This article explores its significance, and reveals the rising role of DeFi in shaping the Internet's next evolution.

Web 1.0: The Beginnings of the Beginnings

The Web 1.0 era roughly describes the period from the release of the technology from the DARPA lab. In 1984, the U.S. The National Science Foundation created its NFSNET network based on the developments of ARPANET. The end of Web 1.0 is considered the beginning of 2000, the development of technology transforms the appearance and content of sites, which causes the shares of IT companies to inflate the dot-com bubble.

Some characteristic features of the Web 1.0 era:

Websites were static, offering little to no interactivity. Users could only consume content in read-only mode, while interactive elements like chat rooms or forums lived on entirely separate sites.
Bandwidth constraints added to the challenge. The physical limitations of data transmission meant slow load times, and distributed data storage was both expensive and difficult to manage.
Behind the scenes, websites were often nothing more than collections of files manually placed on a server—no databases, no dynamic content. Want to add a new icon to a page? You might have had to rewrite the entire HTML file, a task that demanded a skilled hand.
There was no standard playbook. Coding styles varied wildly, and the use of applets, control add-ons, and custom markup often depended on which browser was being used. This led to the infamous "Browser Wars", a turbulent era of competing web standards and incompatible experiences.

Therefore, sites often looked poor and faded, and there was no adaptability and personalization for a particular user.

Web 1.0 era website design

With such immaturity and limitations, the existence of decentralized financial instruments seemed unrealistic. However, in 1989, the history of the term “cryptocurrency” began. David Lee Chaum, an American computer scientist, came up with the idea to engage in the development of digital money. He first proposed to use cryptography to protect and confirm transactions.

Web 2.0. Collective Internet

The era of Web 2.0 is an even more conventional designation than Web 1.0, because it is not characterized by any dramatic changes in the direction of development of the Internet. On the contrary, Web 2.0 is the natural result of the development of programming standards, data transfer protocols and physical hardware. In 1985, Steve Jobs founded NeXT, which in 1996 released the WebObjects framework, which has become in demand in Internet commerce and website development

WebObjects allows you to create websites, desktop applications or web services. The current owner of NeXT, Apple stopped releasing new versions of WebObjects only in 2009.

Web 2.0 is often referred to as the “dynamic Web” or “social Web”. Web developers are moving towards a methodology of designing systems based on network interactions. Users actively interact with websites and applications and participate in content creation on these platforms.

Web 2.0 is characterized by:

Interactivity and personalization. The interaction toolkit—Flash, JavaScript, and APIs—became extensive and highly functional.
Collection and processing of user data.
Ubiquitous authorization enabled personalization and service adaptation based on user-submitted data.
Advanced algorithms were developed for content search and recommendation.
Widespread use of cloud technologies.
Integration of databases and content management systems in most web applications and services.
Cross-platform adaptability. Users could seamlessly interact with the same service across computers, smart TVs, and mobile phones.
Content censorship became more common as platforms took control over what could be published or viewed.

The most prominent representatives of Web 2.0 are streaming services and social networks: YouTube, TikTok, Reddit, X, and Telegram.

Unfortunately, with the advent of Web 2.0, privacy issues have emerged. Data in general can be collected and used inappropriately without the user's knowledge. In addition, IT companies providing the service outsource data processing to unreliable or incompetent contractors.

The issue of limited control is also acute. Users don't really own or control the content on centralized web 2.0 platforms.

Companies that survived the dot-com crash and became market giants control, manipulate and distort information for their own benefit.

“He who owns the information owns the world.” —
Nathan Mayer Rothschild 1825.

By the beginning of the Web 2.0 era, digital payment systems emerged and were actively introduced into e-commerce. Max Levchin and Peter Thiel founded PayPal in 1998. It's still a fully custodial service. In the same year, IT engineer Wei Day describes the principle of an anonymous distributed electronic money system and introduces his concept of “b-money”. At the same time, blockchain pioneer Nick Szabo introduces the concept of Bit Gold, which at first glance looks like Bitcoin. Neither “b-money” nor Bit Gold has been successful. This is the time of single-processor personal computers, which are also extremely expensive.

Web 3.0. Own Your Digital Projection

The year 2008 can rightfully be considered the beginning of the Web 3.0 era. Satoshi Nakamoto creates Bitcoin. The spread of PCs, cell phones, and broadband internet play no small role in Bitcoin's success. The beginning of decentralized and accessible digital money is laid. However, Bitcoin's code base does not provide for the execution of smart contracts on which DeFi applications are built.

In 2013, programmer and former editor of Bitcoin Magazin, Vitalik Buterin described the concept, and in 2015 launched the blockchain and the eponymous cryptocurrency Ethereum. It is on Ethereum that the first decentralized applications appear.

In 2014, Juan Bennett founded Protocol Labs, two of the company's most famous projects IPFS and Filecoin. The first decentralized file storage systems.

AI, IoT, metadata and “big data” are now ubiquitous. But it is blockchain, which can work as a backend for applications, and IPFS systems that define the Web 3.0 era.

Web 3.0 is characterized by:

Public key-based authorization, ensuring user anonymity and privacy.
Uncensored access to applications and data, free from centralized control.
Blockchain as the backend, forming the core infrastructure for logic and transactions.
Use of distributed file systems for both data storage and front-end delivery.
24/7 application availability—even if the front-end is down, smart contracts remain accessible via the ABI protocol.
Full user ownership of content, eliminating reliance on platform gatekeepers.
Transparent transactions, visible and verifiable on-chain.
Protocol governance through DAOs (Decentralized Autonomous Organizations), enabling community-led decision-making.

The most common and demanded Web 3.0 applications are DEX: Uniswap, 1Inch, DEX223 and others.

Unfortunately at the moment Web 3.0 is also not without its drawbacks:

User qualification directly affects the security of user data and assets.
The qualifications and integrity of developers directly affects the security of the project and user assets.
The high volatility of cryptocurrencies remains a major barrier to integrating public blockchain-based systems into traditional industries.

Often projects limit themselves to machine audits or do not conduct them at all. Multi-stage internal and external audits are time-consuming and costly. Project security is also affected by the design of the elements that make up the project. It has long been known that the ERC-20 standard has serious design vulnerabilities that cause users to lose huge sums of money every year, but developers continue to use ERC-20 and its analogs on other blockchains.

A good example of the right approach to security in development is DEX223. The co-founder of the project, Dexaran, is a security engineer and led the development team of Ethereum Commonwealth and Callisto Security Department. The project followed a rigorous security pipeline—undergoing multiple phases of internal audits, community testing, and ultimately a thorough independent external audit.

DEX223 is purpose-built to leverage the ERC-223 token standard, addressing a critical flaw in the widely used ERC-20. Unlike ERC-20, ERC-223 prevents the loss of funds when tokens are mistakenly sent to smart contracts that aren’t configured to handle them—effectively eliminating one of the most persistent design bugs in earlier token standards.

In order to appeal to developers and users of existing ERC-20 tokens, DEX223 is designed to work with ERC-223 and ERC-20 simultaneously, and an EIP-7417 token converter has been created to transition between the standards. In order to keep users away from unwanted tokens DEX223 has developed a mechanism to mark suspicious assets.

Unfortunately, there are few such examples on the market. Most developers copy the code of already working DeFi applications without questioning its reliability.

Web 2.5. Sitting on two chairs

Web 2.5 is an intermediate stage between traditional Web 2.0 and decentralized Web 3.0. On the one hand Web 2.5 applications combine the convenience and mass accessibility for users of the Web 2.0 era with some of the advantages of Web 3.0, on the other hand they are still centralized and censored.

Web 2.5 allows control of the flow of money and information, and is easily regulated and persecuted by regulators for political reasons.

Web 2.5 is characterized by:

Support for blockchain and cryptocurrencies, though crypto-assets are typically held in custodial wallets.
Traditional Web 2.0 authentication methods, such as email, phone number, social media accounts, and biometric data.
Extensive collection and processing of personal user data.
Strict adherence to regulatory frameworks, including KYC (Know Your Customer), AML (Anti-Money Laundering), and sanctions policies.
Limited fault tolerance due to centralized data storage, services, and infrastructure.

Centralized Cryptocurrency Exchanges (CEXes) are a Web 2.5 reference model. Web 2.5 includes companies that accept cryptocurrency, but authorization is done using Web 2.0 methods, such as game distributors, hotels and others.

Critics of Web 3.0 often highlight the frequent hacks and thefts within the DeFi space. However, Web 2.5 inherits the vulnerabilities of both Web 2.0 and Web 3.0—combining the centralized weaknesses of the former with the emerging security challenges of the latter.

In February, hackers attacked Bybit's smart wallet contract, stealing a record $1.4 billion. In May, Coinbase contractors gave hackers the personal data of the exchange's users. The founders of the FTX exchange used customers' money to live luxurious lives and support politicians. STEX (Stocks.exchange) censored users by nationality, froze their accounts and funds, closed under the pretext of hacking, then deleted their accounts and began transferring customer funds to other CEX exchanges.

Conclusion

Web 3.0 seeks to decentralize the Internet, make users owners of their data and assets, and give them financial freedom. A true Web 3.0 resists censorship, both political and corporate censorship. It preserves privacy, protects against identity theft and consequences.

In reality, most current solutions represent a compromise—falling squarely within the realm of Web 2.5. Many projects walk a fine line between Web 2.5 and full Web 3.0 ideals. Even some decentralized exchanges (DEXs), which are expected to be censorship-resistant, have begun implementing geo-based restrictions, reflecting a drift toward compliance and control.Uniswap v4 code supports hooks, allowing modules to be plugged in to implement KYC. If Uniswap decides to implement KYC centrally, users will not be able to bypass data collection and censorship, obviously the project will no longer be an example of decentralization. In addition Uniswap has only one UI hosting point.

On the other hand, 1inch offers a positive example by implementing a secondary UI hosting solution via IPFS. This decentralized approach ensures that, as long as nodes actively replicate the interface, the UI remains accessible permanently and censorship-resistant—a step closer to the ideals of true Web 3.0.

DEX223 developer declares uncompromising decentralization and lack of censorship, even at the design stage it was announced about the development of several versions of UI, which will be located on different hosting platforms, including IPFS. The platform will be accessible 24/7 from anywhere in the world.

DEX223 is more than just another Web 3.0 project—it's a forward-looking concept built to tackle today’s most pressing security challenges on the road to true decentralization. This is precisely the kind of pragmatic innovation the industry needs to bridge the gap between Web 2.5 and Web 3.0.

At the same time, it recognizes a key reality: the transition must include the vast Web 2.0 user base, much of which is still unprepared to fully take ownership of their digital identities and assets. DEX223 stands at that intersection—building a secure, scalable future while meeting users where they are, helping them transition toward true digital ownership one step at a time.

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Note: This analysis is entirely the author's vision. It is not a call to action or investment advice.