By Zhen Yu Yong, CEO and co-founder of Web3Auth
There’s an endless amount of theories as to what exactly is holding cryptocurrency and DeFi back from true mainstream adoption, even as the industry continues to expand into the hundreds of billions. However different DeFi fancies itself from traditional economic modes and markets, it’s exactly alike in terms of its obsession with trend forecasts and growth predictions of varying and increasingly arbitrary proportions. It’s easy to get excited by the idea that “the decentralized finance sector currently represents only 0.1% of its maximum potential,” as reported in Cointelegraph, but what exactly that means – or how one might measure “maximum potential” – is characteristically fuzzy.
All this trend forecasting and predicting has a very specific madcap enthusiasm to it, one that permeates DeFi and crypto even at its markets’ most bearish. That’s not a criticism. This is indeed exciting. One unfortunate side effect, however, of this excitement and enthusiasm among the true believers (and, periodically, even the skeptics) is either an unintentional avoidance or a vast overcomplication of the mass adoption problem and its potential solutions.
When you’re deep in DeFi and watching it grow as it is, it’s easy to forget your own myopia. But DeFi’s recent growth has yet to translate into mass adoption. Blockchain tech is totally opaque to the vast majority of people, and crypto types, if you will, are thought of as a slightly bizarre subculture and routinely derided as buffoonish bros (or worse) on Twitter.
But the solution to this is actually quite simple. It’s not Matt Damon or Kyle Lowry shilling for Crypto.com and BitBuy in Super Bowl commercials. It’s not even Coinbase’s viral bouncing QR code, which enough people scanned to temporarily crash the website. If anything, the number of crypto commercials during the Super Bowl and the Coinbase crash demonstrate that awareness isn’t the issue. People are aware. They’re even curious!
The issue is UX. Across the board, crypto wallet and DeFi product UX is not up to par. It doesn’t matter if everyone scans your QR code if you can’t keep them there after the fact.
Inside the infrastructure, UX, use case feedback loop
Truly useful and intuitive UX in this space starts with underlying infrastructure. Core infrastructure is what allows the UX to improve. Scalability allows users to not have to wait for every interaction, and allows for more interactions over blockchain which costs less, so more people can use it. That’s infrastructure-to-user experience.
But right now, you need to know which blockchain you’re interacting on. You need to know how exactly to interact with it. There’s an endless amount of jargon and a general assumption and expectation that users will just know. This is a huge stumbling block to mainstream progress.
We need an industry-wide push to bolster our infrastructure, speed the onboarding process along, create backstops to theft and loss and make day-to-day key management less of a nightmare. Efforts to improve and increase the scalability of platforms are ongoing and exactly what needs to be happening.
This equation is simple: as technical barriers decrease, use cases will increase, and more people who didn’t have a use for DeFi applications before will be drawn in. Imagine decentralized Twitter, decentralized Google Maps or decentralized anything that’s already intuitive to non-crypto-heads. That’s a start.
What crypto adoption does from an information theory standpoint is coordinate different participants in an ecosystem quickly. It works in DeFi because you don’t need a central entity coordinating the issuance and burning of currency. It works in the art and real estate space to establish uniqueness and social consensus around digital ownership.
But these are still niche cases. People already have banks and cash. Most people would rather hang something on their wall than own an NFT. This is where decentralized tech’s real-world and obviously intelligent use cases should come in: supply chains and political elections are two such examples.
Two keys to real UX improvement
UX-ing our way to mainstream adoption depends on two crucial improvements.
The first is better key management. The single point of failure must go. We need intuitive logins that don’t depend on an overlong phrase that will take all your funds with it if it’s lost or stolen. This is a terrible system and it’s bizarre we’ve come this far with it. It’s time to phase seed phrases out.
The second is genuinely legible FIAT to crypto onramps. I’m not anti-FIAT. There’s value in central FIAT currencies based on underlying promises being used to manage assets. There’s value in decentralized economic ecosystems too, particularly now that cryptocurrency is more efficient than standard currencies.
We’ll convince people to adopt crypto when we build onramps that make crypto genuinely appealing and easy to buy and manage as part of a larger asset portfolio. The UX must be ironclad for this to happen, and PayPal’s crypto portal is a great start here. Eventually you’ll be able to use a credit card to purchase any crypto item and not have to go through KYC. That’s core infrastructure (along with the legal FIAT-to-crypto rails coming down) improving on UX, and that’s the key to the future).
Everything is about ultimately improving the end user experience. Improving the UX, bolstering our infrastructure, and the road to mainstream adoption are ultimately just one thing. And it’s the one thing that might actually take us to the mainstream adoption moon.
About the author:
Zhen Yu Yong is the Co-Founder and CEO of Web3Auth (FKA Torus). Prior to Web3Auth, Zhen was an ETH researcher with a focus on scalability and state channels. He led Peace Bridge funded by both the Ethereum Foundation and ETC Cooperative. He lives and works in Singapore.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.