How Poor User Experience is Holding Back Web3 Adoption

Web3, DAO, DeFi, and cryptocurrencies have all generated a lot of hype and excitement in the digital world, but their adoption hasn't been as extensive as expected. This has become a troublesome question for many tech experts. Despite decentralized technology being embedded with robust AI and machine learning, it's still difficult to hack, but people are still resistant to its adoption. The main culprits behind this are technology issues, user difficulties, and high entry fees.

For example, to access web3 platforms, users need to sign in to a crypto wallet, which can be a challenging process, both in terms of selecting a crypto wallet and making transactions from it. In addition, interacting with dAPPs on the Ethereum network (Layer-1) can be incredibly expensive and difficult. Investors have to pay a significant portion of their investment in the form of gas fees, which can range from 10-15% of the total transfer amount, making it impractical for many users.

Apart from these issues, the new technology is quite confusing and risky, even though the masses are aware of its potential benefits. The difficulty of learning or managing the private key and performing transactions beyond their comfort level hinders the broader adoption of this technology.

When it comes to sending or receiving cryptocurrency, people always look for the ease and convenience of sending a text message. Therefore, web3 development companies are focusing on building customer-focused projects every day and coming up with something new that is both trustworthy and simple to use. However, these companies are still in their pioneering stages.

Problems of Poor User Experience that Are Holding Back Web3 Adoption

Private Key Management Poses a Problem in Crypto

A crypto wallet is at the core of all transactions, from sending cryptocurrency and managing accounts to minting NFTs and bridging USDC from Optimism to Arbitrum. It holds everything you own and enables you to interact with the network. However, all accounts are not created equal and can vary based on EOAs (Externally Owned Accounts) or Contract Wallets.

Most users' accounts fall under the EOA type, and this is where the first web3 UX problem arises. EOA accounts are identified by a 42-character string of numbers and letters prefixed with "0x," known as a private key. The biggest challenge is remembering all the private keys, which is the sole responsibility of end-users. If a single digit is missed, the account becomes inaccessible. Unlike web2 platforms where users can click on "forgot password" and generate a new password using their mobile and email ID, web3 doesn't offer any password recovery.

Web3 Moving Away From Recovery Phrases

Many web3 developers are working on the recovery phase to address this issue effectively. Vitalik Buterin advocates for sharing something on social recovery wallets that don't require recovery phrases. The concept requires many promises as more work needs to be done to make it more user-friendly.

dApps Require Too Much Onboarding

Every interaction on Ethereum-based platforms involves gas fees to complete transactions. We cannot assume that non-crypto natives without prior Web3 exposure or knowledge of blockchain transactions can convert fiat to crypto, buy/swap assets for ETH, pay for gas fees, and sign off on transactions correctly as they onboard dApps.

Gas Fees Can Only Be Paid In Native Assets

Needing native assets to pay for gas fees is another significant hurdle. Swapping tokens and bridges to cover the fees is tedious and time-consuming.

Users Have To Execute A Transaction For Every On-Chain Interaction

Completing one transaction at a time is a time-consuming and frustrating process for individuals. Moreover, it involves additional minting, gas fees, and other charges too. This is something every user wants to avoid in a fast-paced world. Many blockchain technologies claim to overcome this issue, but only a select few can cope with it.

Lack Of On-Chain, Cross-Chain Interoperability

Most Web3 projects are siloed, and users must navigate multiple frontends, bridge UIs, and submit repeated transactions to buy and sell assets between networks. Market segmentation also comes with its own costs, introducing a new class of complex product questions that are still not widely adopted by many. Their users often find obstacles in choosing which cross-chain operations to use and which assets they can use them for.

What do Users Want from Web3?

People Want Convenience

People desire a platform that is quick and easy to use, allowing them to accomplish their objectives more rapidly and inexpensively. If we examine the current web3 projects, many appear to be designed for engineers by engineers. The complexity extends beyond the service itself, with whitepapers filled with technical jargon that most new users will never comprehend. Those who persist in sifting through jargon-filled explanations are currently navigating the complex user journey of web3 platforms.

If web3 platforms aspire to become mainstream and supplant web2 platforms, they must simplify everything. Designing friction needs to be minimized to welcome those who lack technical proficiency. Greater emphasis should be placed on those who did not grow up with mobile phones and video games. A simple interface is sufficient for them.

More Familiarity With Ramps

We all understand that web3 and blockchain are still novel concepts for many individuals. Brands like MetaMask and Coinbase Wallet are striving to simplify engagement in the sector by utilizing browser extensions. These extensions are designed to provide new users with simplified sign-in alternatives and hassle-free on-ramps to new projects.

However, obtaining a wallet can be a difficult task for many individuals. To recover digital assets, users must safeguard the seed phrase. Otherwise, you will have a difficult time recovering your digital assets, which is prevalent since many people are unfamiliar with the technical aspects of blockchain.

If someone manages to keep their wallet secure, there are still many stages involved in converting crypto assets into something they can use in their daily life. Users frequently employ third-party intermediary applications to convert cryptocurrency into native currency to pay their bills. As a result, people seek on and off-ramp solutions to become more familiar with web3 platforms.

Financial Off-ramps

One of the most significant disadvantages of web3 technologies is their limited adoption in many prominent locations. Crypto is rarely accepted outside web3-specific services as a means of payment, leaving few options for users to purchase anything using crypto. Users frequently need to return to their fiat currency, which is a difficult process to reverse.

Suppose you have $1200 worth of Ethereum in your wallet and need to pay a utility bill of $950. The remaining balance must be converted back into native currency. You would likely follow these steps:

• Log in to the crypto exchange.
• Sync your wallet;
• Add your funds from the ethereum wallet to the exchange wallet.
• Exchange your ETH into native currency by paying gas fees.
• Once the exchange converts cryptocurrency to native currency, it's time to withdraw USD to your bank for yet another fee.

Every time users need to convert from fiat to crypto or crypto to fiat, they must pay a significant fee, such as a gas fee. As a result, users spend a significant amount of time and money converting to and from cryptos. Many players are focused on simplifying the process, but it is still in the early stages and will take a significant amount of time.

If the process becomes faster and simpler, more crypto transactions are likely to occur, potentially creating a revenue-generating business environment.

Potential fixes

• There should be more focus on creating crypto exchanges crypto exchanges that are integrated within an app, or by using white-label solutions that offer institutional services at a lower fee.
• By integrating crypto exchanges with other payment solutions, users can pay using their Coinbase debit card or leverage MoonPay to enable on and off-ramps on the platform, making transactions seamless.

Seamless Transactions

There are two major issues with blockchain transactions: addresses and the way transactions are processed.

First of all, check my public Ethereum address

0xa3f3076e33d36e6f1572f78c868bc0115a896a8c5e51ff7cab8396e5e1ff14961

You might be thinking it's a typo. Indeed it’s not. If someone wants to send me something, I have to give them my complete address. Addresses are long, complicated hashes that can be difficult to remember or verify. To send or receive currency, one must input the full address without any mistakes. A single error can send assets to the wrong address, with no way to retrieve them.

The long hashes also look terrible, especially when you are trying to figure out who is sending you something and when.

Another issue - the way transactions are processed

Most dAPPs require users to sign agreements at every stage of a transaction, which can be time-consuming and cumbersome. Think about how you will feel when a platform orders you to click “agree” before proceeding. It could be a daunting task as it takes longer time to do things and requires too much attention from users.

Here’s Hasu defining the transaction process graphically.

How to fix it?

• Roll out services like ENS Domains where abstract addresses can be transformed, which are easy to remember. These could be phrases or else.
• Reduce a load of multiple checks on users as a single step can roll out approval.

Today’s Problems Are Tomorrow’s Opportunities

The major cause of poor user experience is the early nature of the tech that holds back its adoption. Best Web3 Development tech experts are working to solve them and make the entire ecosystem more user-friendly. Therefore, tech experts are considering these problems as a catalyst that grows tomorrow’s most impactful businesses.