Will Web3 ever attain mass adoption or its goal of onboarding a billion users? This is a question that most Web3 diehards are currently asking themselves while also evaluating whether developers need to abstract complexities like gas fee payments for every small thing users want to do on-chain.
Let’s take a step back, The internet has undergone several iterations since its debut in the early 80s; Web1, the static web of the 1990s, Web2, which introduced an interactive aspect to online communications and more recently Web3, the era where internet users have full control over the data they share digitally.
While all these phases of the internet have marked a significant advancement, one can’t help but notice that Web3 is struggling with adoption compared to the earlier iterations, especially Web2.
To provide some more context, a Web2 social media platform like TikTok alone boasts over 1.1 billion active monthly users globally. Meanwhile, the entire Web3 ecosystem is still struggling to hit a solid 500 billion user base.
This discrepancy in adoption is fueled by several factors, but one of the most prevalent issues is the gas fee requirement for DeFi or on-chain operations. Why pay to use the Web3 ecosystem when one can simply stick to Web2 where most platforms are basically free?
The Gas Fees Hurdle in Web3 Adoption
Before diving into a few instances where gas fees have affected Web3 activity and possibly hindered adoption, it is worth highlighting how this concept works or, rather fuels the blockchain economy.
Gas fees are the transaction fees that blockchain users are required to pay in order to perform on-chain operations such as swapping tokens, participating in yield farms or minting NFTs. The fees serve as a compensation to miners or validators whose role is to secure the network.
But despite playing a fundamental role, gas fees have over time, proven to be a massive hurdle. This was particularly evident at the height of the 2021 DeFi and NFT boom, which caused the congestion of the Ethereum network, triggering gas fees on the Ethereum blockchain to rise as high as $300 per transaction in some instances. Notable occasions include the ENS Domain rush ($300+), SHIB token listing on Uniswap ($300+) and the Yam Finance Launch in August 2020 ($200+).
While the cost may seem like the only issue here, that’s far from the truth. Many potential Web3 users are yet to be onboarded simply because gas fees are too complicated to understand, calculate or even execute.
For example, to execute a simple transaction on the Ethereum blockchain requires two types of gas fee payments; an approval gas fee to allow the smart contract to spend one’s tokens and the execution gas fee which is associated with the actual transaction.
It may sound simple for crypto natives who are used to interacting with DeFi but that’s not the case for the ‘next one billion users’ who are accustomed to platforms like Facebook, YouTube, Instagram or TikTok where they don’t have to pay any fees or a deep technical know-how.
On the brighter side, several Web3 innovators have come to this realization and are now building more consumer-friendly ecosystems that abstract gas fee complexities, among others such as device compatibility, signatures and interoperability.
The next section of this article highlights a leading Layer 1 example that has already deployed a generalized chain abstraction infrastructure to abstract away crypto complexities for end users.
XION: Flexible Fee Payments and Gasless Transactions
XION is the first walletless Layer 1 blockchain and was specifically designed to support the mainstream adoption of digital assets. So, how does it work and what sets this particular blockchain apart from the likes of Ethereum or Solana when it comes to gas fees?
XION embeds key blockchain functionalities at the protocol level thus making it easier for users to navigate the ecosystem without worrying how to login in with private keys or the execution of gas fees. Similar to Web2 platforms, developers can build consumer-friendly DApps on XION which eliminate private key dependencies.
More importantly, this Layer 1 blockchain features a parameterized fee layer, which introduces the aspect of flexible fee payments or gasless transactions.
As such, Web3 users don’t have to go through the hassle of constantly improving or calculating gas fees for the slightest operations on-chain. It is also worth mentioning that XION is the first Title II EU-Compliant Layer 1 blockchain, having recently released a Markets in Crypto-Assets (MiCA) whitepaper.
While relatively nascent compared to more established players, this is one of the few innovations in the ecosystem that seems to be getting the feedback right.
Web3 is already complicated enough to add more hurdles for prospective users; what the ecosystem needs are innovations that abstract away these technical processes, making it more seamless for anyone to use Web3 DApps just as they would social media platforms.
Conclusion
The Web3 ecosystem may have lagged compared to Web2 or AI in terms of adoption, but this is not to say that the value proposition is any lesser.
Once stakeholders fix the existing hurdles with a special focus on pain points such as gas fees, it is likely the space will witness an increase in the number of active users. Two things; no one wants a complicated UX and it is currently not enticing to feel as if one is paying even for the most micro-task which could be a simple on-chain communication.
Also Read: Why Web3 Platforms Should Prioritize Decentralized Funding
