The Product Gap in Blockchain: Shifting Focus from Infrastructure to User-Centric Applications
After over a decade of development on smart contract platforms, protocols, and infrastructure, one would think that blockchains and cryptocurrencies would be close to finding mass product-market fit and becoming a part of everyday life. Though they have seen hundreds of millions of users, they have yet to become integral to the general public’s tech stack. This disconnect is not in the technology itself but in the industry’s overwhelming focus on infrastructure at the expense of user-centric applications.
Over the past several years, the most-hyped and anticipated projects in the crypto space have been infrastructure-related. Alt L1s like Solana, Avalanche, and Aptos raise hundreds of millions of dollars on the promise that they could be the ultimate blockchain solution, driving billions of users to pay transaction fees in their native currency daily. The sheer number of these chains requires additional bridging infrastructure, not to mention the specific infrastructure necessary to facilitate interoperability between various Ethereum L2s. We’ve also seen the explosion of the restaking narrative, led by EigenLayer, but now with numerous other restaking protocols and dozens of liquid restaking token protocols, including EtherFi, Renzo, Swell, Kelp, Bedrock, and Puffer.
This focus on the infrastructure layer has left the space in an awkward position: the ability to make applications that leverage cross-chain tokens, have near-instant transactions at cheap speeds, and are secured by billions of dollars in assets is available, but there aren’t any apps that actually exist. The question remains: where are these apps?
To understand this paradox, we must examine the areas where blockchain has found proper product-market fit. DeFi has unlocked unprecedented capital efficiency and composability for money, allowing anyone to utilize their assets in yield-generating mechanisms previously only available to the biggest banks and financial entities. Gambling and speculation have emerged as one of the most prominent use cases, as evidenced by NFTs and memecoins surging in value based on the belief that others will buy them and increase the price. Most recently, prediction market Polymarket has emerged as the latest protocol to find PMF, as it has been seen as one of the most legitimate, liquid, and accurate predictors of general sentiment surrounding the 2024 US Presidential Election.
Polymarket’s success highlights a crucial insight: its users don’t know or care that smart contracts on the Polygon blockchain secure it. It’s the only app to break through to mainstream by disguising itself as another web2 application. This success underscores the importance of focusing on user needs and experiences rather than the underlying technology.
The obsession with infrastructure has led to another interesting phenomenon: some of the most prominent applications in the crypto space have begun to become infrastructure layers themselves. Take Uniswap, for example. Though it started as an efficient way to trade different tokens, it is now one of the biggest dApps with billions of dollars of liquidity and markets that are sometimes better than centralized exchanges. It has transitioned to infrastructure as the primary token liquidity provider for numerous protocols and projects. The same is true for lending markets like Aave, which now command a sizable chunk of the overall DeFi market and are the basis for numerous strategies that build on top of them.
The key to incentivizing the development of apps that people will use lies in shifting our focus from infrastructure to understanding and addressing real consumer needs. It’s about genuinely grasping what problems blockchain can solve for the average user that existing technologies cannot. If this means only using blockchains for the most minor parts of an app, like data transfer or digital ownership, then so be it. Polymarket doesn’t have an unnecessary token or gas fees, yet it is still a highly financialized application — why shouldn’t we expect the same UX from non-financial consumer crypto apps?
Developers and product managers in blockchain must start with the user and work backward to the technology, not vice versa. This means deeply understanding potential users’ pain points and desires before even considering how blockchain might fit into the solution. The goal should be to create applications that are so valuable and seamless that users don’t need to know or care about the underlying blockchain technology. Polymarket’s success is a testament to this approach — it solves a real problem (predicting outcomes) in a way that’s more efficient and accessible than traditional methods without emphasizing its blockchain underpinnings.
We need more cross-pollination of ideas between the blockchain world and other industries to achieve this. Bringing in perspectives from successful consumer-facing companies could lead to breakthrough applications that combine blockchain’s unique capabilities with proven user experience principles. Additionally, we should measure success not by technical metrics or token prices but by how effectively our applications solve real user problems. Are people using these apps daily because they provide tangible value? Are they improving users’ lives in ways that weren’t possible before? These questions will ultimately determine whether blockchain technology becomes a part of everyday life for the general public.
The path forward for blockchain adoption is clear: we must shift our focus from building more infrastructure to creating applications that solve real user problems. The technical foundation is mainly in place. Now, it’s time to put it to work in ways that create tangible value for users. Only then will we see blockchain technology become a part of everyday life for the general public.
By Lincoln Murr
