Adapter Companies: The Key to Connecting Web3 and Legacy Systems
Adapter Companies: The Key to Connecting Web3 and Legacy Systems
An adapter company serves as a bridge between decentralized physical infrastructure networks and traditional systems, enabling web3-based protocols to connect with legacy infrastructure.
At Teleport.XYZ, we're creating an open ridesharing network called the TRIP Network. Our vision is to have an open network similar to the open nature of the web and email. Just as you can use different web browsers like Chrome or Safari to access your email and website hosted on different providers like Squarespace, Wix, GMail, and Outlook, our ridesharing network will allow anyone to build on top of it without a single company controlling every aspect of it.
We believe that in the future, there will be many service providers offering ridesharing, food delivery, and other services, without any single company taking up to 50% from every transaction. With digital money, this vision is now possible, but connecting the digital world of smart contracts and DAOs to the realms of law, regulation, identity, and finance required the invention of bridges.
Adapter companies serve as these bridges and are the key to achieving seamless integration of Decentralized Physical Infrastructure Networks with traditional systems. Such adapter companies enable web3-based protocols to operate within established frameworks (such as ridesharing and financial regulation) while retaining their decentralized nature, facilitating seamless collaboration between the old and new economies.
One of the first examples of an adapter company were Bitcoin miners. Despite participating in a decentralized network, they function as traditional businesses, such as LLCs or sole proprietorships, allowing them to rent offices and pay for electricity using a bank account.
In the case of the TRIP Rideshare Protocol we needed to define two primary types of Adapter Companies:
Operating Companies that run software to connect drivers and riders, plan routes, set prices, provide customer support, interact with local ridesharing regulation and insurance, and perform background checks on drivers.
Client Companies that publish ridesharing software to the Apple and Google App Stores, process credit card transactions, and enable drivers and riders to connect to the Operating Companies to find each other.
In conclusion: To create an open network for ridesharing in which many Operating Companies and many Client Companies can interact, bridges between the world of digital money and smart contracts to the worlds of finance, regulation, insurance, and off-chain computation are required. We call these bridges Adapter Companies and we encourage others who are developing open networks and decentralized protocols that touch the physical world to reuse this as a design pattern.