Web3's Increasing Backendization: A Sixteen-Year Path of Entropy Reduction and a Disappearing Boundary

The universe remains shrouded in mystery, and time passes in a flash. As the year draws to a close, a new chapter is about to unfold.

I see the past sixteen years of Web3 development as a process of “moving from entropy increase to entropy reduction”—a fundamental restructuring of order. This is partly due to the extreme disorder and rawness that defined the industry’s early days. When examining the current global Web3 landscape and its core business models, I believe dividing these sixteen years into five distinct eras provides a clearer view of its evolutionary path.

Industry observers may have noticed that since 2023, external forces have frequently entered the field and now coexist with Web3’s native business models. Although these forces often appear in different applications or scenarios, their parallel presence remains a noteworthy phenomenon.

This sixteen-year technological evolution is driven by deep historical forces. The most significant factor is not simply a lack of performance, but a structural mismatch between “unlimited computational demand” and “limited block space.” Strictly speaking, what we are experiencing is not just a straightforward version upgrade, but a generational leap from native innovation to real-world symbiosis.

The Dawn of Chaos and the Shift to Multidimensionality

At present, the decentralized business landscape is still transitioning from disorder to order. Looking back at 2008 to 2017, I see this as the “dawn of chaos”—the first two eras.

The first and second eras addressed the fundamental question of “existence.”

Bitcoin, through its chain structure and Proof-of-Work (PoW) consensus, created a “stateless value transfer machine.” This was not just “accounting.” For the first time since the internet’s inception in 1969, information was elevated from easily replicable “bits” to conserved “digital matter,” giving the internet its own independent value anchor. Ethereum, by introducing smart contracts, brought in “global state,” transforming a simple value verification system into a globally shared “general-purpose computing environment.”

This led to a philosophical divergence in blockchain evolution, ushering in networking and platformization. From the entropy-increasing chaos of “programmable assets,” the industry began moving toward multidimensionality.

During this period, the industry’s internal structure was fragmented, and external access was largely controlled by centralized exchanges. To drive paradigm shifts, efforts were made to bring the Nasdaq order book model on-chain (such as EtherDelta). However, limited by the infrastructure of the time, this proved to be a difficult “narrow gate” to pass through.

Systemic issues caused by insufficient performance made the ideals of decentralization appear radical and immature in the face of poor user experience.

Compromise and Breakthrough Amid Contradictions

Macro-level infrastructure challenges extended to the increasingly active application layer, making the third and fourth eras a history of compromise and struggle. Decentralization, confronted by the “trilemma,” collectively experienced “performance anxiety” for the first time.

From 2017 to 2022, during the long “breakout” transition, upper-layer applications were forced to “cut to fit.” As block space on Ethereum’s mainnet became increasingly congested, infrastructure began to fragment and technology to decouple: high-performance monolithic chains diversified into multi-chain interoperability, and monolithic structures shifted toward Layer 2 modular scaling. All technical paths ultimately pointed to the group’s underlying anxiety over “scalability.”

As a segment of decentralized technology, many have discussed with me the evolution of DEX (decentralized exchanges). In my view, the repeated iterations in DEX design stem from its role as a technical solution for market liquidity within a container.

AMM (Automated Market Maker) emerged during this period as the “optimal compromise” for liquidity under the “trilemma” framework. This was another highlight of native Web3 innovation, replacing the computationally intensive order-matching engines of traditional finance with the simple x*y=k formula. By sacrificing capital efficiency and price accuracy, it achieved continuous liquidity—a structural breakthrough between infrastructure limitations and trading models, fueling a phase of prosperity for decentralized finance.

With the advent of the fifth era, infrastructure performance began to overflow, and the AMM advantage faded. The logic of decentralized technology underwent a deep inversion as applications began to “chainify.”

To break free from the capital efficiency constraints of the AMM topology, history, in a sense, revealed its coincidences as a kind of physical inevitability. The main innovation lines of single protocols tried to escape the confines of general-purpose chains and shifted toward “fundamental reconstruction.” Overflowing infrastructure performance and new-era trading demands began to converge along the timeline.

After 2023, the order book (CLOB) returned to the spotlight with physical-level precision, and DEX liquidity generation mechanisms were restructured within “egalitarian” production relations. The call for “mass adoption” is already sounding, and we see “chain abstraction” and “intent-centric” approaches converging: cross-chain bridges, gas fees, RPC nodes—all hidden within solver black boxes. Subsequently, the abstraction layer quietly stitched together isolated blockchains of various sizes, and these unfamiliar terms drifting in the developer world have all quietly moved toward the backend.

The tug-of-war between infrastructure capability and trading models, capital efficiency and liquidity costs, and the divide between decentralization and user experience—all elements of the DEX “trilemma”—began to dissolve and transform as the fifth era unfolded.

Ultimately, trading models found the most intuitive and efficient form within the roulette wheel of physical inevitability.

From “Native Islands” to “Symbiotic Continents”

Over sixteen years, this “social experiment” at the wild frontier has not been a miraculous outlier. Viewed through a broader historical lens, it remains a necessary act of self-completion in the evolution of internet technology.

The half-century chronicle of the internet is also the story of the birth of the “digital Leviathan.” Beginning with the “great decoupling” of 1969, information was freed from “atoms” and became “bits,” with the marginal cost of creation and transmission approaching zero. To achieve the efficiency and convenience required for economic activity, humans simulated order and trust with centralized databases, creating a “sea of islands” and ceding individual data rights in the process.

The genesis of Web3 is the internet’s coming of age. This virtual “ocean of information” achieved ontological “independence.” Humanity is no longer content with merely “mapping” reality through it, but aspires to reconstruct physical laws in this digital void and build a parallel universe capable of carrying value.

Across five eras, as system entropy cools, we are witnessing a tectonic shift from “native islands” to “symbiotic continents.”

Assets are becoming more substantial, and the inflow of real-world assets is not just a migration of capital, but a form of mutual redemption. The physical world seeks atomic-level efficiency and global liquidity through on-chain settlement, while Web3 requires the “negative entropy” of the real world to overcome the fragility and chaos of asset values that rely solely on internal system confidence. This collaborative compliance has given the network an unprecedented physical anchor, transforming it from a speculative “volatility playground” into the foundation for global settlement.

More profoundly, as complex logical games are delegated to AI and the execution layer, the separation of “computation and verification” is driving the backend evolution of interactions. Technology is now attempting to return simple determinism to users through “intent,” while blockchain, wrapped in layers of computation, retreats to serve as the “bedrock of truth” that establishes final consensus.

At this point, we may be witnessing the final chapter of fragmented Web3 infrastructure: as ecosystems continue to “fold,” vast pools of assets flow seamlessly between heterogeneous networks, all beneath a calm surface invisible to users.

Looking at the grand backdrop of technological civilization, like energy and internet protocols, Web3 will inevitably become a backend foundation—unseen, but verifiable.

Boundaries are dissolving. In a flash of white light, humanity adds a new name to the final verse of history—the “wisher.”

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