The Problems With Web3
There's a broken web3 journey.
The web3 user journey as we know it today is a fragmented and broken experience. This “broken web3 journey” has a few main parts:
A pursuit of maximalism that has lost its purpose. Blockchain infrastructure was born out of a pursuit of decentralization, which meant certain design decisions had to be made when the community began considering smart contracts and decentralized applications. A community of idealistic and intelligent computer scientists in charge of these decisions continued to create an experience that felt simple to them but was estranged from how the common person interacts with technology. Having to manage private keys, control your data, and be responsible for security, all while manually having to sign and monitor transactions is an amazing evolution on personal security, but it leads to almost everyone making mistakes and losing money to learn their lessons. This experience led to blockchain and web3 as we know it today. A novel technology that after over a decade in full operation continues to gain traction as a speculative alternative asset, but not as an obvious evolution of the internet, web2 to web3, as was originally expected; which leads into the next problem.
Web3 communities are built around speculative assets that end up punishing most long-term users rather than incentivizing them. Every popular application of web3 at the Layer 1 level requires users to “buy in”. Users are required to purchase the base network tokens to be able to utilize the technology. Then they typically have to give up this base asset for an alternative riskier asset related to whichever service they want to use. Consider a User on Ethereum. They must first acquire ETH and transfer it to a web3 wallet. Then to join any DAO, participate in a game economy, or access services they must swap this ETH for an alternative token. This flow benefits the products but punishes the user. Users have to lock up actual value (eg: fiat/bitcoin) in return for L1 assets with decreased stability and are then enticed with high potential returns fueled with “moon” memes. The problems outlined with the technology above have led to an abundant focus on tokens and methods of creating and extracting value on a network. Due to this culture, there’s been a misconception that tokens are an easy way to go from 0-100 as a web3 startup.
This problem is best grasped through a story. There was once a university physics professor who had spent 25 years of his career attempting to solve a complex math problem and had finally found the solution. During the celebration, a young grad student asked the professor why he had studied the equation in the first place; what greater problem was the solution going to address? After all, isn't that the point of trying to solve these problems?
The professor stumbled; decades after discovering the problem and attempting thousands of different iterations, he had forgotten what had driven him to such lengths in the first place. He found a problem and became obsessed with it. Suffice to say the student dampened his parade a bit, but learned a valuable lesson.
When a problem is really big, it’s easy to get so lost in the details that you forget the big picture. This is pretty much exactly what’s happening to the blockchain industry. There is some great innovation out there, but much of the spirit behind what blockchain is “supposed to do” versus what it is actually doing has been lost.
Products are built around speculation forcing monetary buy-in from users with tokens to drain funds from consumers and create a bottomless pit of liquidity for businesses. This trend goes against the user-first philosophy of creating products that free us from the shackles of web2 that blockchain and web3 were born from. Instead, the shackles have transformed from corporations controlling our data to corporations controlling our assets. This is a dangerous shift and one that needs to be addressed before web3 has any chance to become “mainstream”.