The concept of Web3, or the third version of the internet, often refers to a future iteration of the web that incorporates decentralization and blockchain technology. This new version of the internet is envisioned to be less dependent on centralized authorities, with more direct user control and peer-to-peer interactions.
However, as of my knowledge cutoff in September 2021, the use of a particular top-level domain (TLD) like .xyz or .com does not inherently make a website "Web3." It is not the domain itself but the technologies used by the website or platform that would categorize it as part of Web1, Web2, or Web3.
Web1 refers to the early days of the internet where content was mostly static and read-only. Web2, the version of the internet most prevalent as of 2021, is characterized by interactive content, social media, and a high degree of centralization in companies like Google, Facebook, and Amazon.
Web3 is seen as the next evolution, with the potential to be more decentralized, privacy-focused, and utilizing blockchain technology to enable things like cryptocurrency transactions, smart contracts, and decentralized applications (dApps).
If people are saying that .xyz is "Web3," they might mean that it's becoming a popular choice for new projects associated with blockchain, cryptocurrencies, or other aspects of the envisioned Web3. However, simply having a .xyz domain does not inherently involve any of the technologies or decentralization associated with Web3.