Friend.tech's signup screen I really like this web3 signup screen from friend.tech

I first became interested in the web3 space in early 2022, just as the hype of NFT projects was starting to level out. Acquaintances and friends kept telling me about the vast economic and cultural possibilities that blockchains could unlock, and how an NFT-dominated world was not too far away. My instinctive reaction to this was deep skepticism. But, out of curiosity, I decided to learn about the web3 space to explore the impact web3 could have on society in the decades to come. I wanted to identify what would make web3 important in the long-run, as opposed to what simply made it trendy in the short-term.

What I found, and what has excited me most about web3 over the past two years, is the possibility of building a new and improved internet enabled by blockchains: one that is more open, and potentially incorporates new economic models. As someone who enjoys thinking about ways to improve the status quo, and someone who is starting to find the decades-old Facebook-Instagram-Twitter trifecta a bit stale, this is exciting to me.

However, when I first started exploring the web3 ecosystem, one of the biggest things that stood out to me was that there were very few apps I saw myself using regularly. A big reason for this were the hurdles in place. Many apps asked me to connect my wallet and fund it to interact with the app before I could even decide whether I liked the app or not. It also seemed as though non-trivial gas fees were an accepted aspect of using dApps. For most users, this only makes practical sense when already depositing their money in their wallet to buy crypto or NFTs. It also seemed as though many apps flexed being on-chain as the reason for using the app, rather than as a benefit that facilitated the product. Although these apps could gain significant usage as a result, especially during crypto boom cycles, I didn’t see these apps as offering a product most people would use in the long-run.

It is not surprising then that today, according to DappRadar, 9 of the top 10 monthly dApps on Ethereum (which commands 57% of the total crypto ecosystem’s TVL) in January 2024 are DeFi related protocols. DeFi apps attract technical users that are willing to undergo a steep learning curve for the promise of profits, giving them an incentive to become crypto-native. However, most people don’t want to become crypto-native. For example, while there are around 5 billion social media users on web2, by the end of 2023 social media protocols only accounted for about 7% of web3 usage. This points to most casual users not necessarily having a reason to use web3 social media apps over web2 alternatives just yet.

It is clear that web3 user experiences have improved substantially since 2022. The rise of ERC-4337 and account abstraction has made it much easier for web3 apps to onboard new users and cover their gas fees, while preventing them from having to manage their own wallet private keys. The biggest improvement here, to me, is that apps now allow users to create smart account wallets using web2 login methods such as email. This allows web3 apps to now easily onboard non-technical web2 users. Layer 2 chains such as Optimism and Arbitrum are also significantly lowering transaction fees, and are getting closer to eventually making them negligible.

Overall, I’m very optimistic about future user experiences on-chain, and I think that current usage trends are typical of any nascent industry with early adopters. Developers are also realizing that they need to meet web2 users where they are now, rather than try to drag them into becoming crypto-savvy right away. In general, I believe that the apps in the future that will bring the billion users to web3 won’t advertise themselves as blockchain apps. Instead, they will simply serve as quality user experiences that happen to be on (and are perhaps enabled by) the blockchain. With a significant focus on infrastructure development in 2024 to further abstract blockchain accounts and make transactions cheaper, dApps should have a much stronger platform on which to deliver user experiences that can attract mass adoption to web3.