Making Web 3.0 Usable — Part 1
10 Reasons Why Web 3.0 Has Yet to Take Off
Stalwart members of the blockchain community have long celebrated the decentralized ecosystem of Web 3.0, and not without good reason. Web 3.0’s promise to replace the platform giants of Web 2.0, such as Facebook and Google, with DAOs (Decentralized Autonomous Organizations), cooperative protocols, peer-to-peer transactions, and a more balanced digital economy certainly calls for applause. The world proposed by Web 3.0 just seems better and brighter, more attuned to the democratized demands of our age.
Indeed, much of the work done in Web 3.0 thus far has revealed the beauty of its promises. Decentralized social media platforms such as Mastodon have pointed toward safer, more communal modes of online discourse by replacing relevancy-generated algorithms with user-created networks and distributed systems. The rise of NFTs has enabled artists to bypass financial mediators and sell their work directly through peer-to-peer transactions, generating a more equitable digital economy that seeks to award creators rather than fill the overflowing coffers of Big Tech and Big Finance. Even mass entertainment has taken cues from Web 3.0’s interactive ecosystem. The multiplayer game Axie Infinity, for instance, offers a Pokémon-inspired digi-world where players can battle, build communities, and contribute to the game’s ecosystem all while earning tokens throughout. The game has proved massively successful with July earnings skyrocketing to a whopping $207 million.
However, despite all of Web 3.0’s utopian capabilities, it has yet to completely infiltrate the mainstream. How can this be? Well, to put it politely, the Web 3.0 infrastructure is under construction. DApps and blockchain startups are actively developing user interfaces, protocol schemas, and more to flesh out this new digital sphere, so usability has not yet assumed its full potential. But let’s be real: navigating the Web 3.0 world is nothing short of an absolute headache. From high gas fees and uncertain exchange rates to confusing confirmation screens and difficult on-ramping processes, the current Web 3.0 experience is about as enjoyable as getting a root canal.
Below, we’ve compiled a comprehensive list of the biggest issues currently plaguing Web 3.0.
1. Users must install an additional browser plugin
The Web 2.0 infrastructure is generated by apps that use simple log-in processes consisting of usernames and passwords. Users log into their Twitter or Gmail accounts by typing in a username and its corresponding password, for example. Most DApps, or decentralized applications, however, seem set on deliberately annoying their users. Instead of simply logging into a platform, dApp users must undergo the difficult process of downloading a separate browser plugin such as MetaMask. This entire process is not at all intuitive, especially to users removed from the tech world, like artists minting NFTs who would have to download an NFT extension such as Nifty Scanner before doing anything remotely interesting on the blockchain. All of this takes too much time and concentration to navigate, and many new users won’t see the need to continue further with the setup process.
While this issue is still prevalent within the Web 3.0 sphere, many dApps and other projects have developed effective tools to ease newcomers into the ecosystem. WalletConnect, for example, offers an open-sourced protocol that allows users to engage with any dApp from their mobile phones by scanning a QR code or by clicking an application link. Rather than downloading an additional browser plugin, users can simply employ WalletConnect to do that work for them. Likewise, Rainbow Wallet, one of the best Ethereum wallets available, features a beautiful, user-friendly design that walks new users through the wallet connection process with simplicity. We have based Cardstack’s code on Rainbow because, well, it’s just that good.
2. Transactions require gas
Users are all set after connecting their wallets, right? Wrong. Once the wallet is connected, users must fund it with what’s called gas. Blockchain networks require users to pay fees (that fluctuate in price) known as gas before they can take action, send funds, mint NFTs, trade, or join DAO groups. This hidden fee surprise, however, isn’t even the most vexing component of this process. Gas fees are charged in their native tokens, meaning each network contains its own floating currency often not tied to USD. For example, the Ethereum network runs on ETH and the Polygon network runs on MATIC, two entirely different tokens. To make transactions in Web 3.0, users must engage in a head-splitting collision of currencies between varying networks and USD. The exchange rate varies too, so that 100 USDC (US dollar coin) may equal 0.037778 ETH one day, but who knows what the rate will be a day later? How do everyday people accustomed to the clean transactions of PayPal and Venmo make sense of these numerical hodgepodges? They don’t.
To remedy the gas headache, some dApps have started developing protocols for gasless transactions. This jargon sounds complicated but the logic is fairly simple. It operates much like business reply mail where the mailer, a business in this case, pays the return postage. The consumer can mail the envelope without paying the postage. In the cryptosphere, a relayer serves as the business in our analogy by fronting the gas charge, so that users don’t have to go through the process of buying gas. The user will simply sign messages regarding the transaction and the relayer will take care of the rest. Biconomy, a relay infrastructure network, is currently developing products that grant users the ability to make gasless transactions by providing simple APIs that are designed to guarantee seamless multi-chain experiences for users. Ultimately, dApps like Biconomy provide a great service by fronting gas fees, so that users can conduct transactions in one value. We need more of these services.
3. High gas fees
Users are still not out of the water once they develop an understanding of gas fees. As a result of the speculation surrounding blockchain technology and also the demand for certain network transactions, gas fees can balloon to comically large prices.
How does this work exactly? Let’s say there is a high demand for bidding on an NFT, so much so that the network becomes congested. In order to force their transactions through the network, users will have to increase their own gas prices, rendering the whole transaction something akin to a masochistic auction. This, of course, is not only financially unstable but also generally illogical from the perspective of consumers. Who would pay $90 in gas for a $25 product? The current economic principles surrounding gas prices work well only when users are purchasing very expensive products, like paying $90 in gas for an NFT worth $1,000. This warped gas economy is downright antithetical to the democratizing spirit of Web 3.0.
Thankfully, there are cheaper networks running software similar to Ethereum. Many NFT marketplaces such as NBA Topshot are building networks with stable gas platforms specifically designed to usher in newcomers to the world of Web 3.0. Other projects are making use of proof-of-stake consensus mechanisms in order to reduce gas prices and eliminate the environmentally harmful practices of crypto mining. Proof-of-stake mechanisms, or protocols that award block validators with transaction fees rather than block rewards, are less risky and more environmentally friendly than proof-of-work mechanisms, where miners use intense computational power to solve cryptographic puzzles and earn block rewards. Some stablecoin networks (networks tied to USD) like xDai employ a unique dual-token model that provides coins for both proof-of-work and proof-of-stake, allowing for consistently low gas prices. A transaction on mainnet costing $25 in gas would, hypothetically speaking, cost only $0.003 on layer-2 blockchains like xDai. Our very own Card Pay protocol is built around xDai’s layer-2 network. Other dApps and even multiplayer RPG games such as Axie Infinity are building their own layer-2 networks called sidechains.
4. Losing your seed phrase
One of the great features of the Web 2.0 world is the concept of password recovery. When a user forgets their Facebook password they simply reset it. Unfortunately, the same cannot be said about our haphazard Web 3.0 sphere.
If the user loses what’s called a seed phrase — a complex series of words generated by a cryptocurrency wallet that provides access to its secured assets — then they lose all of the funds stored in their wallet. That’s right: losing a seed phrase means that the user loses everything. Not even MetaMask or Consensys can recover the funds. A common method that Web 3.0 users employ to remember their seed phrase is literally writing it down on a sheet of paper because storing it online in, say, a Gmail account or a digital folder renders the wallet susceptible to hacks. What kind of antediluvian nonsense is that? Who still stores passwords on paper? And what happens if you lose the paper? None of this makes any rational sense, and it’s precisely this sort of anti-consumer logic that’s hindering Web 3.0 from taking over the mainstream.
Mercifully, recent developments offered by dApps and various wallets have attempted to resolve this issue. Rainbow released a wallet that stores an encrypted backup of your seed phrase on iCloud, so that users don’t lose all of their funds if they forget their words. Other projects such as Trezor’s Shamir Backup have created security tools that allow users to duplicate up to sixteen recovery shares of private key backups that can be retrieved through a wallet. And, of course, users can store their seed phrases in iCloud in the form of a photo. Overall, the complexity of the seed phrase is designed to keep Web 3.0 users safe from hacks and online theft; nobody can forcibly take users’ assets from the blockchain.
5. Confusing confirmation screens
The key to ensuring smooth online transactions is creating an easy checkout process. When someone purchases a product from Amazon, they are quickly transported to a clean and streamlined confirmation screen. Confirmation is integral to perpetuating digital commerce. Web 3.0 has yet to learn this.
When users interact with the blockchain or a dApp, they’re often met with cluttered confirmation screens that make no sense. The screens rarely confirm to users that their funds are going to the correct recipient, and they often incorrectly assume that users understand various contract functions or message signing requests when, in reality, they do not.
The user experience currently surrounding transaction confirmation is a nightmare. How can Web 3.0 become a consumer go-to when it seemingly dislikes its own consumer base?
DApps can find solutions to this problem by allocating more time to developing user-friendly wallets and protocol-specific apps. What’s needed is a mobile wallet that can be extended to handle multiple protocols, so that its confirmation screens speak the language of trading, earning, spending, and playing games. Wouldn’t stronger interfaces make the Web 3.0 experience more accessible? We are developing our own protocol with Card Wallet to generate specific confirmation screens and design layouts that clearly articulate the user experience.
6. Uncertainty surrounding exchange rates
The varying tokens, fluctuating exchange rates, and floating currencies also make transactions on Web 3.0 a total nuisance. So often are tokens displayed without revealing their worth or correlating exchange rates that transactions on Web 3.0 come to resemble something akin to shopping with blinders on. Token exchange rates can even be incorrectly displayed, a problem that results in users losing funds on certain transactions. This confusion surrounding exchange rates complicates onboarding processes for new users and consistently annoys longtime blockchain community members.
There are a handful of ways to remedy the uncertainty surrounding exchange rates on blockchain. It would be greatly beneficial if not a bit idealistic to establish a foundation where conversion to a local currency takes place. By this, we simply mean that a common and accessible conversion chart needs to exist within each dApp. The decentralized oracle network Chainlink, for example, provides exchange rates for common pairs, i.e. x amount of ETH = x amount of USD.
Thus, when consumers are shopping for, say, digital art that costs 0.04 ETH, they will understand the conversion to be $100 USD or whatever correlation the current exchange rate determines.
Developing more thorough and concise exchange rate displays is integral to expanding the Web 3.0 world into the mainstream. Sure, it may be difficult tracking the exchange rate fluctuations or maintaining watch over less popular tokens, but it can and needs to be done in order to alleviate the confusion surrounding transactions on Web 3.0. We have worked toward solving this problem by equipping Card Pay with Chainlink’s price feed feature to establish accurate and reliable exchange rates on our platform.
7. Confusing fiat onramp process
After new users have endured the arduous process of establishing a wallet, they must now navigate the confusing fiat onramp process, or in plain-speak, they must now learn how to get tokens. The problem here is that most dApps assume users already have the knowledge to do this when, of course, they do not. To begin receiving tokens, users must suffer through yet another annoying setup process: First, they need to create a Coinbase account. Then they need to link a bank account. Then, after they buy the asset (let’s say ETH) on Coinbase, users must withdraw the purchased tokens to their wallet and ensure the amount and address are correct.
Moreover, if users need more specialized tokens like DAI or AXE (to play Axie Infinity), they need to navigate decentralized exchanges like Uniswap and turn the ETH into these tokens.
New users must undergo this headache (and those aforementioned) before they can even begin doing anything remotely useful or fun. To make matters even worse, not everyone has access to user-friendly apps like Coinbase, as some countries restrict access to popular exchanges. New users are essentially thrown into a pitch-black corner of the cryptosphere and expected to blindly grope their way out.
Some fiat-to-crypto gateways such as Wyre are developing ways to streamline and clarify the onboarding process. Wyre uses payment APIs to complete secure international and cross-chain transactions that make the onboarding process much easier. Apple Pay recently linked Coinbase’s debit card to their accepted payment methods, allowing for customers to easily engage in crypto transactions and also earn rewards. Rainbow, of course, offers a smooth onboarding process that cuts out much of the fluff. And Ramp Network allows users to purchase crypto without leaving a dApp or wallet. Our very own Card Wallet will also help ease the fiat onboarding process — through our prepaid card feature that will allow new users to make transactions right away.
8. Transactions require users to switch between networks
The hassle doesn’t even end after users set up their wallets and learn the ins and outs of floating currencies. Nope, they still have to navigate switching between the dual networks, mainnet and sidechain, like a hacker from The Matrix before completing a transaction. To put things simply, mainnet (layer 1) refers to an independent blockchain running its own network with its own technology and protocol. The sidechain (layer 2) refers to any separate blockchain that runs parallel to mainnet and grants tokens the ability to migrate between different chains. Most wallets are not currently designed for multi-chain assets, so users must constantly flip between networks in order to conduct transactions. This process, predictably, is not at all intuitive.
Thankfully, new tools like WalletConnect 2.0 are working to ease this interaction between the two networks. WalletConnect 2.0 uses an open protocol that establishes pairings between two apps and devices by way of a relay server that simplifies navigating cross-chain instances. The payloads are then encrypted through a shared key between the two parties and correctly distributed.
DApps like WalletConnect 2.0 ultimately work to send the transaction to the correct network without making the user switch back and forth. With Card Pay, we are currently developing our very own token bridge to fix this issue.
9. Bridging layer 1 and layer 2 takes too much time
Navigating between the two layers of the blockchain is not only confusing but also time-consuming. Think of this entire bridging process as traveling to a foreign country and having to wire money through an exchange rate system. It takes forever. Deposits and withdrawals between the two networks can take anywhere from 20 minutes to one week. This is an absolute non-starter for potential mainstream newcomers. Why would any sane person jump aboard a system that can hold their earnings for up to that long? It simply makes no sense, especially when most users are accustomed to the quick and streamlined services of PayPal and Venmo.
Some state channels such as Connext are developing protocols designed to quicken and simplify transfers between different chains. Essentially, projects like these operate by requiring users to pay a small fee for an expedited bridging process between layer 1 and layer 2. Consider this process similar to Western Union’s “Money in Minutes” service, where a sender can give cash to a WU agent and, minutes later, the recipient in another city can pick up the money. Western Union can achieve this transfer because they have an inventory of cash in both the sender’s and the recipient’s locations. In the blockchain world, a similar technique can be used for transfers across multiple chains, with agents serving as cross-chain liquidity providers who have tokens (instead of cash) on both chains. When a customer wants to transfer tokens across chains, these agents can facilitate the instant transfer using their token stockpile on both sides, in exchange for a transaction fee. The allocation of these funds (how much is received on one chain and thus needs to be dispersed on the other) is tracked by a technology called a “State Channel,” which allows for instant processing of debit and credit without incurring the full cost of blockchain transactions.
10. It is difficult to know which Dapp to use for which function
The recent surge in the number of available dApps has further complicated the onboarding process because it has congested a burgeoning digital world with too many choices. By this, we mean specifically that there are too many dApps needed for individual functions; most projects should begin to focus on consolidation. There are dApps for buying tokens, trading ETH, minting NFTs, bridging tokens, and so on. The list is endless. The Web 3.0 landscape has become something of a total run around that seemingly gains joy from throwing new users into a maze of dApps and onboarding complications.
The solution here is simple: We must tie the workflows together and begin developing dApps that consolidate the various components of crypto transactions, from clarifying exchange rates to simplifying the bridging process. To achieve this at Cardstack, we are currently developing a consolidated workflow system called Card Flow that will interact with all the necessary components of crypto transactions and clearly track the various processes contained within Web 3.0.
Learn more
This article is Part 1 of our “Making Web 3.0 Usable” series. Part 2 explains how Card Pay can transform these problems into mass market-ready solutions.
Interested to learn more about Cardstack?
Check out the resources below:
What Is in Your NFT?
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The Cardstack Ecosystem
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Combining Cloud & Blockchain Tech
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