Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.
Crypto is becoming a lot more popular, which means all derivatives that come with the web3 industry are also growing in popularity. While there is more news, regulation, government acceptance, and users now taking part in the decentralized finance sector, there is also an increasing number of people who feel intimidated by the complex nature of trading or using defi tools, which leaves them left out. This is a natural friction the industry would have as it grows and matures.
You might also like: Is web3’s innovative explosion constraining user adoption? | Opinion
We need to address a few different types of users, as their needs vary greatly.
- The Newbies: These individuals have recently noticed crypto in the headlines and are now eager to get involved. They might create their first wallet address or open an account on a centralized exchange.
- The Degens: These are seasoned users who are well-versed in the defi experience. They typically manage multiple wallets and hold accounts on numerous exchanges. While they are comfortable with the technology, they seek greater efficiency in their operations.
There are also many other types of users, such as Bitcoin Maxis, whales, traditional traders, and more. However, for now, we will focus on these two main groups, as many products and companies design their solutions to cater to one of these groups but rarely both.
User experience and user custody: A balancing act
For some people, the reason they are in web3 in the first place is because of the technical features available—pseudonymity, custody, decentralization, security, speed, smart contracts, and more. However, some people, typically the newbies, enter the space to speculate on pricing, make quick trades, or are just in it for the money without regard for the fundamental values of the underlying assets.
It’s like buying Ethereum and storing it on a centralized exchange, which ironically defeats the entire purpose of Ethereum’s existence. However, in any case, Binance has recently reached 200 million users because it has built an easy-to-use application. They are a prime example of a corporation that has created a product prioritizing user experience over the technical applications that web3 and defi tools allow for.
And this is different from your average degen, who cares more about having custody over their own money. They have their own digital wallets and private keys. These are more secure, but with great custody comes great responsibility. With a centralized company like Binance, there is a customer support channel and employees who can help you and guide you. However, with decentralized exchanges, if a user makes a mistake with a transaction or loses the keys to their digital wallet, nothing can be done. This is intentional by design. If an external party could access your crypto wallet, it would undermine the entire decentralized nature of the industry.
Nonetheless, the fact is that even the most experienced degens can find it tumultuous and erroneous when it comes to navigating the web3 space. The question is, what happens when you want to convert some Polygon (MATIC) into Ethereum (ETH)? Or vice versa? Wrapped MATIC? Feels like a bandaid solution, not an end solution. Go through some arbitrary bridge? There are so many bridges in the market, and some of them are slow, unsecured, and too complicated to use, even for experts.
More dApps need to be developed to enhance the user experience for existing degens. Proper design with robust security protocols is essential. This is the only way new dApps can compete in a relatively mature market. Better dApps would also reduce friction, allowing newbies to become degens more quickly, safely, and easily.
A prime example is the emergence of Telegram for dApps. The question companies are trying to address is how many crypto communities globally use Telegram as their source of information, education, communication between smaller communities, queries, support, alpha, and more. So why do users need to leave Telegram in the first place? Building games, dApps, and other tools on Telegram could make it easier and more convenient for users to interact with the web3 industry. This perfectly illustrates prioritizing the user experience without centralizing the entire process.