Onchain Fatigue: The Harsh Reality Driving Users Away from Web3
During this recent bull run, onchain activities have taken the spotlight. Whether it’s memecoin buying or airdrop farming, the best returns have been from creating a web3 wallet and diving into the complex world of DeFi and onchain transactions. However, after months of this activity, users show signs of fatigue. The complex and multi-step interactions required by web3 in its current form are proving to be a significant challenge, with potential implications for the future of onchain experiences.
The experience of interacting with decentralized applications has always been a complex and cumbersome task. At the beginning of the process, users are tasked with a responsibility of the utmost importance: securely storing their private keys. This first step is enough to keep many crypto holders from ever stepping foot into the onchain world because messing it up could mean losing their funds forever. After that, the process does not become much easier, as every token transaction on a chain like Ethereum requires two transactions: a user must first approve their tokens to be transferred and then initialize the transfer. Other problems like scams and malicious apps only add to the gravity of accepting these approvals, as the most popular Web3 wallets like MetaMask do not have features to show if a website is malicious — users are always a few clicks away from losing their entire wallet.
The massive hurdles of this experience weed out many novice users, leaving only the advanced ones to take advantage of the high returns and opportunities onchain. From DeFi farms offering dozens of percentage point returns on stablecoins to the thousands of dollars distributed in airdrops, onchain activities are extremely rewarding for those who know how to do it. Some entities spend several hours per day simply airdrop farming and interacting with protocols to receive a large token allocation upon airdrop. However, these activities are financially motivated and forced — nobody uses the blockchain as an alternative to web2 because of the better user experience.
As the bull market matured and the onchain opportunities became less novel, it became evident that user sentiment was shifting away from onchain interactions. After experiencing numerous airdrops and being let down, the average user is no longer willing to navigate complicated transaction flows and dedicate their time and money to something that doesn’t offer a proper risk-reward ratio. The onchain experience remains exclusive to those willing to invest this time and effort — a unique aspect that may not be sustainable in its current form.
Fortunately, user experience is one of the most important issues being actively improved in the onchain space. Rabby Wallet, for example, is a relatively new Web3 wallet that acts as a portfolio tracker, secure transaction simulator, and DEX all-in-one. Though this alleviates user security concerns, it still leaves the problem of applications requiring complex interactions. Account abstraction (AA) improvements are being made on Ethereum and have already been implemented on NEAR to make the process of being onchain feel no different than interacting with a modern-day bank account. Coinbase’s Smart Wallet, whose release is just around the corner, promises to streamline and simplify the onchain experience in a way that’s never been seen before. Instead of being extension-based, the Smart Wallet will live in the browser, only requiring a passkey from users before giving them full control over their funds. It also allows developers to sponsor gas costs, meaning transactions are free for the end user. These features will all be tied to Coinbase accounts, creating a near-seamless fiat-to-crypto on-ramp that gets funds into the Ethereum ecosystem from a cheap and reputable source in record time.
With better AA features, developers can finally focus on building retail and consumer-oriented apps that are fun and engaging for the mainstream user. Games are one big underexplored area that is set to experience a renaissance in the near future. With frameworks like Lattice’s MUD making it possible to create complex onchain experiences, an ordinary user can quickly create a Smart Wallet, fund it via Coinbase, and interact with games just like they would in the modern day.
Onchain fatigue is a real phenomenon facing the crypto world, stemming from the inherent financialization of opportunity and the complex transaction meta created by the oddities of blockchain programming. Fortunately, at a time when they’re needed most, solutions are coming that should make the onchain experience feel no different than the modern web. Though it remains to be seen if this is the catalyst for finally bringing mainstream crypto adoption, it is the most promising development on the retail side since MetaMask.
By Lincoln Murr
