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Within the decade since Ethereum co-founder Gavin Wooden first coined the time period “web3,” we’ve seen the promise of a brand new digital empire rise into actuality. Cryptocurrency has change into a trillion-dollar mainstain of the worldwide financial system; NFTs have entrenched themselves in high-stakes artwork and funding trades; blockchain-based monetary companies have transitioned from novelty to regular.
For all of the above, we are able to thank the dreamers and builders who took it upon themselves to create options that buyers didn’t even know they wanted. It’s not a stretch to say that their artistic dedication constructed our nascent web3 empire; at present, the ecosystem encompasses tens of hundreds of dApps and an expansive number of defi companies.
The query is, will that very same creativity topple it, too?
In concept, web3’s progressive explosion ought to speed up consumer adoption. As choices multiply and diversify, the ecosystem naturally turns into extra intriguing. Nevertheless, whereas consumer adoption has been respectable sufficient lately, the charges we see at present are far disproportionate to web3’s obvious worth proposition.
Why? We have now a sequence fragmentation downside. In accordance with a report from CoinPaper, over 1,000 distinct blockchains have been operational as of January 2024. The Ethereum ecosystem options over 50 L2s at present, with one other 50-plus anticipated to go stay quickly, all competing for customers and liquidity.
This fragmentation has an intense impression on expertise. Customers usually must manually swap between networks inside their wallets or interfaces, which could be complicated and result in irritating (and even pricey) errors. L2, L2, and L3 chain proliferation forces customers to maintain their accessible property and gasoline tokens of their wallets in the event that they wish to pattern rising functions constructed on these chains. And once they do, they face a studying curve: every blockchain poses its personal algorithm, transaction charges, and functionalities.
Given these challenges, is it any surprise that mainstream customers have hesitated to leap into web3? To unlock widespread consumer adoption amongst mainstream customers, we should ship extra seamless, intuitive consumer experiences.
The intuitive reply would appear to be to encourage builders to enhance cross-chain compatibility and interoperability. Nevertheless, counting on particular person builders to supply world interoperability is a bit like asking somebody to empty the ocean with a bucket: the size of the problem renders the request laughable.
Immediately, the web3 ecosystem includes a thousand lively blockchains; we may see ten instances extra in 5 years. Blockchains are proliferating at an exponential fee as innovators construct chains that cater to explicit industries, pursuits, or enterprise use instances—and given the early success and adoption of the blockchain modularity thesis, this fragmentation will seemingly intensify.
However even when chain proliferation was a tenth as fast as it’s at present, builders may by no means sustain. Not like web2, the place innovators can construct as soon as and entice customers from throughout the web with few limitations, web3 builders usually must deploy situations of their apps on a number of chains to chase customers and liquidity. Consequently, builders must spend their time constructing insecure, inefficient, and inelegant cross-chain messaging options moderately than elevating their core worth proposition.
To return to our empire metaphor: as a substitute of increasing web3’s attain and sources, architects and builders are lowered to patching cracks and digging connective tunnels between metropolis sections, exhausting themselves with work that the majority denizens won’t ever see or respect.
So, how can we alleviate web3’s consumer expertise issues and provides builders extra time for value-adding innovation? The reply lies in chain abstraction.
Think about a world the place our fragmented chains have been abstracted away. Builders would possibly construct a single occasion of their app on the chain of their selecting and entice customers throughout any chain with out interruption or inconvenience; customers wouldn’t must know which chain that app was constructed on or fear whether or not their property and gasoline tokens are suitable.
To construct this functionally abstracted ecosystem, web3 advocates would want to satisfy a number of necessities. First, consumer balances would have to be unified, aggregated, and accountable throughout all chains to make sure that customers may spend their balances freely with out problem whereas stopping intentional or unintended overdrafts. Moreover, builders mustn’t want to include advanced integrations into their options to facilitate cross-chain accessibility.
Very similar to Rome, an abstracted web3 empire received’t be inbuilt a day—however there’s little doubt that we have to begin constructing at present. Until there’s an ecosystem-wide effort to prioritize abstraction, we received’t have the chance to unlock mainstream adoption. We owe it to the web3 architects and innovators to make sure that their visionary work receives the acclaim, appreciation, and utilization it deserves.
