As a seasoned crypto investor and observer of the blockchain landscape for over a decade, I’ve witnessed the meteoric rise of Ethereum and the birth of web3. The innovation and creativity that has emerged from the dreamers and developers in this space have transformed the world of finance, art, and technology beyond recognition.
Over the past ten years, the vision of a new digital domain pioneered by Ethereum co-founder Gavin Wood under the name “web3” has started to materialize. Cryptocurrencies have grown into a significant component of the global economy, valued at over a trillion dollars. Non-Fungible Tokens (NFTs) have made their mark in high-value art and investment markets. Blockchain technology has transformed financial services from novelties to commonplace.
The visionaries and innovators behind the scenes were instrumental in bringing about all the advancements mentioned above. They took the initiative to develop solutions that consumers weren’t yet aware of, and their tenacity played a significant role in establishing the foundations of our current web3 landscape. This vibrant ecosystem now comprises tens of thousands of decentralized applications (dApps) and a rich tapestry of DeFi services.
The question is, will that same creativity topple it, too?
Web3 proliferation is undercutting user adoption
In theory, the rapid advancement of web3 technology should lead to a surge in user interest. As more and varied offerings emerge, the ecosystem becomes increasingly appealing. Yet, despite this potential, the current rate of user adoption falls short of what one would expect given web3’s perceived value.
What’s the reason behind this? We encounter an issue called chain fragmentation. As per a CoinPaper report published in January 2024, there were around 1,000 active blockchains. The Ethereum network specifically hosts over 50 Layer 2 (L2) solutions currently, with approximately 50 more planned for launch imminently. All these platforms are vying for user base and liquidity.
The fragmented nature of the blockchain landscape significantly influences user experience. Individuals frequently have to manually transition between networks within their digital wallets or interfaces, which can result in confusion and potential mistakes, some of which could be expensive. The proliferation of L2, L2, and L3 chains necessitates keeping various assets and gas tokens in users’ wallets if they wish to engage with emerging applications developed on these chains. When they do so, they encounter a learning curve as each blockchain presents distinct rules, transaction costs, and features.
Considering the obstacles at hand, isn’t it understandable that the average consumer has been hesitant to dive into web3? To encourage mass acceptance among this demographic, we need to provide smoother, more user-friendly interfaces.
As a researcher studying the topic of blockchain interoperability, I’ve considered the apparent solution of urging developers to enhance cross-chain compatibility. However, expecting individual developers to deliver global interoperability is akin to asking one person to drain the ocean with a single bucket. The magnitude of this task makes such a request seem absurd.
Chain fragmentation is constraining blockchain developers
In the current web3 landscape, over a thousand blockchains are actively in use. This number could potentially increase tenfold within the next five years. The rapid growth of blockchains is a result of innovators creating chains tailored to specific industries, niches, or business applications. Given the initial achievements and widespread acceptance of the modularity concept in blockchain technology, this trend towards fragmentation is expected to accelerate.
Even if the rate of chain proliferation were only one-tenth of its current speed, web3 developers would still struggle to keep up. In contrast to web2, where innovators can create a product once and attract users from around the internet with minimal restrictions, web3 developers typically have to deploy their applications on numerous chains to reach users and liquidity. Consequently, developers must dedicate significant time to designing and implementing insecure, inefficient, and unsightly cross-chain communication systems instead of focusing on enhancing their primary value proposition.
Using the imperial metaphor once more: Rather than extending the dominion of web3 by adding new territories and wealth, architects and developers are left to mend existing flaws and lay foundations for better communication between distinct districts. This laborious task often goes unnoticed by most inhabitants.
One potential solution to enhancing the user experience in web3 and providing developers with more time for innovative value-additions is through the implementation of chain abstraction. In simpler terms, this means creating layers or interfaces that hide the complexities of blockchain technology from end users, allowing them to interact with decentralized applications in a smoother, more intuitive way. Developers can then focus their efforts on building valuable features and improvements rather than being bogged down by the intricacies of the underlying blockchain infrastructure.
Chain abstraction is a necessity for users, developers, and web3 overall
Picture a universe where the disparate components are seamlessly integrated. In this scenario, developers could construct a unified version of their application on any blockchain they prefer. Users could effortlessly access these applications across various chains without interruption or hassle, oblivious to the underlying blockchain infrastructure. Their assets and gas tokens would automatically adapt to each new platform they visit.
To create a functional and interconnected web3 ecosystem, several prerequisites must be met by its advocates. Initially, user balances necessitate unification and aggregation across various blockchains. This ensures that users can seamlessly spend their balances without complications while preventing unintentional or accidental overspending. Furthermore, developers should not have to incorporate intricate integrations into their projects for cross-chain accessibility. Instead, the ecosystem should provide a simplified and streamlined solution.
Just as Rome wasn’t built in a day, an abstracted web3 empire won’t be created overnight. However, it’s clear that we need to begin constructing it today if we hope to achieve mainstream adoption. Without a collective focus on abstraction across the ecosystem, we risk missing out on the opportunity to fully realize the potential of web3 architects and innovators’ groundbreaking ideas. It’s essential that we support their visionary work by giving it the recognition, appreciation, and practical application it merits.
Mayur Relekar is the cocreator of Arcana. Previously serving as the chief product officer at Wow Labz, Mayur teamed up to establish Arcana with the mission to streamline blockchain intricacies and elevate user experience. The venture has secured investments from prominent industry investors such as Balaji Srinivasan, Polygon Ventures, Republic Crypto, and Woodstock Fund.
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2024-07-20 19:42