The biggest opportunity over the next decade is onboarding the next 1BN people into crypto. There are currently around 4m users who interact with DeFi and 80m unique blockchain wallets (0.1% of the global population). We are still in the very early stages of mass adoption of crypto, and chain tribalism distracts from the larger opportunity ahead.
I believe that the following things will happen:
- We will live in a multichain world where chains are akin to nations (different philosophies, currencies, people and cultures)
- Developer tooling, communities and libraries will become 10x better enabling a wider range of builders to develop natively on crypto.
- Crypto will be abstracted away for the next 1BN people who are onboarding and most will have no idea that the experience is powered by crypto.
Multiple Chains Will Succeed
Multiple chains will endure and be “dominant”. Application developers will choose to route transactions through different chains depending on what they are trying to achieve. Developers have to think about the following things and it’s not immediately obvious where to build:
I believe we will live in a multi-chain future (e.g. Solana, Ethereum, Terra). Passionate, crypto native folks are often chain maximalists, but we all share one thing in common – we are crypto maximalists.
Developers will need to ask themselves the following questions (not a complete list) before they pick where to develop their applications and many successful applications will work natively across multiple chains:
- Speed: What is the max load of the system? How fast can block confirmations happen? This varies a lot – Solana can process 65k transactions a second and has a block time faster than 0.5 seconds whereas Ethereum can process 30 transactions per second with a block time of 15 seconds.
- Cost per transaction: What are the costs for different blockchains (L1 vs L2) to confirm transactions? Proof of work chains usualy cost more than proof of stake for example.
- Security: How secure is the network? How battle tested is it? Are there good tools available to developers to plug common loopholes?
- Decentralization: Can a small number of decision makers control outcomes or is the validator network decentralized?
- Developers: Can you find Rust (Solana) or Solidity (Ethereum) for your project? Are there more folks with C (close to Rust) or JS (close to Solidity)background avaialble to be trained?
- Community: Where are the users (geo) and what type of activity are they already doing (DeFi, NFT, Gaming)? Different chains have different levels of traction in different communities.
- Onramps: Are there available Fiat onramps to the token that you require for the users you care about? Can you attract users or provide liquidity if needed?
- Incentives: Are there special incentives on specific chains (grants or investment capital) or for users (liquidity mining) that can supercharge your growth?
My friend, Felix Feng put it nicely in a conversation we had a few months ago – different chains are like different nations with different philosophies, communities, and GDP. This Twitter thread also has some great nuggets:
I also enjoyed this data-driven take (from August) supporting a multichain future.
Developer Tooling Will Get 10x Better
Developer tooling will need to improve and deep communities will need to form to onboard the next batch of developers into crypto. If you talk to most people building and scaling projects engineers are the bottleneck to the pace of growth.
If we are going to live in a multichain future we will need better cross-chain infrastructure (check out projects like Polkadot, THORchain) which will help route different transactions to the right chains. Building on the “chains as countries” analogy, we need better transport and global passports to allow for cross-chain compatibility. I’m excited about Neon EVM which allows developers to write smart contracts in familiar languages like Solidity and deploy them on Solana (a second chain). I also think that aggregation services like Matcha which checks for the best prices and liquidity across DEXs will expand across chains (and potentially allow low gas or gas-less transactions) will help improve transaction efficiency.
We also need better documentation (e.g. Intro to programming on Solana, or minting NFTs using Metaplex Candy Machine), bootcamps and courses (e.g. CryptoZombies, ChainLink Bootcamp), developer communities (e.g. QuestBook), and frameworks (e.g. Anchor Framework for Rust) and developer platforms (e.g. Alchemy, Infura) to help newer developers build faster and better in crypto.
In addition, I imagine we will need some standard tools to support regulation like on-chain KYC (this wallet is a real, verified person – e.g. Civic), Fiat<>Crypto onramps as a service (MoonPay, Ponto), and wallet analytics to early detect “bad actors” across applications.
Crypto Will be Abstracted Away
To really drive adoption, the complexity of interacting with crypto will need to get abstracted away for users (definitely) and for application developers (likely). Less than 0.1% (made up statistic) of the people who send money using traditional rails understand how the systems work under the hood. The same will be true for crypto; people just want their transactions to be reliable, fast, cheap, and secure.
Audius is a cool example of a decentralized “SoundCloud” built on top of Solana and IPFS where users don’t need to know that storage is decentralized and activity is recorded on-chain. Users can just have fun discovering and listening to music and not worry about keys or custody.
Even when users are onboarding into crypto they often want to just buy an NFT or a token but are confused by the prerequisite of creating a self custody wallet and setting up their own security (and often don’t have familiar mental models). Developers will need to allow new users to pay in Fiat (e.g. a credit card) and provide “temporary custody” of the user’s keys (account information and password). Users could then “claim” their keys with a second onboarding into self custody at a later date (which could just be a common service for all application developers.
This is not an exhaustive list — just a few perspectives on how product development in crypto is going to evolve and how that might help onboard 100x more developers and users into the technology.