The missing link between Web2 and Web3

One of the main obstacles to the large-scale popularization of currency applications is that the process of users getting started is very complicated and not yet fully mature. For someone new to cryptographic tokens, even the simplest thing of “full control over your digital assets” is not very easy or intuitive.

Of course, users are not required to have full control over their assets to invest in cryptographic tokens. Centralized exchanges like Coinbase have demonstrated the efficacy of the “custodial” model in crypto-token trading. In this model, people deposit their assets with custodians who protect and track them. The key advantage of this model is convenience. Anyone can use the Coinbase app or other exchanges to buy crypto tokens relatively easily without having to memorize a “mnemonic phrase” (a string of words that constitutes a “private key” that controls access to an asset). In this way, users can buy and sell various cryptographic tokens, exchange them for other cryptographic tokens, use assets for purchases and payments, and soon be able to purchase NFTs.

However, go further into the wider Web3 ecosystem of fully decentralized, interoperable applications and networks – not just exchanges, but also play and earn games, tokenized social networks, fan-engaged communities and Other rich user experiences – these are largely unavailable through hosting. This Web3 experience entails sending their crypto assets to a non-custodial wallet where no one but the user holds the private keys, and there are no restrictions on the types of transactions that can be made.

Indeed, this is the most exciting part of the cryptosphere, but it is also where we see many first-time users daunted. Web3 products cannot expect users to jump right into the decentralization bandwagon from a familiar centralized experience. The future of mass-market crypto experiences lies in apps that provide a familiar hosted experience, with the ability to upgrade to a non-custodial experience.

This article will outline some ways developers can think about the user journey, use some familiar Web2 constructs to bring users into the cryptosphere, and help those users understand the potential of Web3 before handing them the keys to the asset – ultimately leading to their product adopted by more people.

A framework to help users complete their journey

Tokens and NFTs are unfamiliar to many people, and there is a theoretical limit to how far the average person is willing to explore new experiences. In a purely unmanaged environment, most people glance at a screen prompting them to write down a 24-word “mnemonic” (a randomly generated phrase to form their “private key” or password), and they will Decided it wasn’t worth it.

If the goal is to get first-timers up and running quickly, the experience has to be custodial — at least initially.

The missing link between Web2 and Web3

This diagram shows the broader path to adoption of the full Web3 experience — and the simplified user journey that people need to comfortably move from managed to unmanaged systems.

Below we’ll go into more detail about each step, why they’re important, and how they build on each other to foster confidence and excitement about the emerging Web3 activity.

Step 1: Seamless entry for first-time users through familiar Web2 structures (eg, logging in with an email address). Many Web3 applications that exist today invite users to log in by connecting their wallets.

The missing link between Web2 and Web3

This may become the default option for many applications in the future – wallet login is very convenient and secure. However, first-time users of cryptographic tokens can be confused, overwhelmed, or even suspicious, if they don’t recognize what they’re looking at. For many first-time users without a wallet, the traditional way of logging in is the only option they are willing to use when trying out new apps.

This is a particularly important step in the user journey for creators who are increasingly looking to use Web3 technologies to create new forms of fan engagement. Fans who support artists early in their careers may reap benefits in the form of creator access, recognition, and perks — the design space here is nearly limitless, and the wave of innovation and experimentation is just beginning.

However, most fans are not crypto natives, and the requirements for them to acquire a hardware wallet and create a secure system are too high. Fans should be able to sign up, pull out their credit card, buy their favorite creator token, and see it in their account – it has to be intuitive and it has to reflect the familiar Web2 experience in order to see the user’s the whole journey. No crypto wallets, key management, “gas” (transaction) fees, stuck transactions, or any other unfamiliar user experience.

In this way, creators can build a shared digital economy with fans that they can take anywhere on the internet, but join in a way that doesn’t intimidate or bother fans.

Step 2: Provide options for users to get started with the product in a simple, fully managed experience. For experienced currency users, managing private keys or mnemonics is a part of daily life, but most users who are exposed to encrypted tokens for the first time will immediately give up when they see such information – “This 12 words are the only way to get your account back. Keep them in a safe and secret place: exhaust turtle silly pretty fog midnight enact throw journey nephew animal reward. Write this down.”

The missing link between Web2 and Web3

Rather than greet users with this experience, set them up with a familiar experience and then offer them an unmanaged option further down the user journey. Their initial registration process should be more like: sign up, create username/password, agree to terms, start buying crypto tokens. Then once they’re in the app and transacting, they should have the option to self-host and tap into the wider Web3 ecosystem.

Some projects have tried other solutions, such as embeddable iFrames, to store users’ seed phrases through their Google Drive. It’s a tempting solution – super easy for the user, no need to write down their seed phrase. But the crypto community was quick to point out that this created dangerous user habits, did not adequately educate users about the risks they faced, and made their Google accounts a target for hackers. Rather than taking a half-baked approach, keep users a clean experience: start with the hosting experience they’re used to, then help them graduate to full self-hosting when they’re ready.

Step 3: Educate users in-product and off-platform. This is especially important when it comes to security — most users aren’t even using today’s best practices (eg password managers, two-factor authentication methods, etc.) in Web2 applications and products. Introducing new experiences requires more education. Metamask does a great job of giving users the secure content they need.

The missing link between Web2 and Web3

Expect to see wallets incorporate this education and content directly into the product as the wallet builds out more “first-time crypto-token users” capabilities.

Step 4: Create a pathway to the Web3 wallet. Once users who were previously unfamiliar with cryptographic tokens are on board, Web3 products can manage to take them down the path of self-hosting. An accessible Web3 product must ensure that users can exit the system, for example by converting their assets into other forms of tokens, or by taking them out of a particular ecosystem and into the wider Web3 world.

As users become more familiar, it should be easier for them to seamlessly participate in the creator economy, rather than being tied to a particular platform. For example, Coinbase enables users to simply transfer their assets to a non-custodial wallet. This means they can sign up, try to buy crypto tokens, then send their assets to a Web3 wallet and interact with the entire ecosystem of apps.

The missing link between Web2 and Web3

At Rally, the social token community I co-founded, users are free to convert their creator tokens into the community’s native token, $RLY, which they can then transfer to an ERC-20 Ethereum-compatible wallet that enables them to transfer their Convert to any crypto token or interact with other communities (while the creator social token itself is now fully custodial, the ability to bridge tokens out is coming).

The missing link between Web2 and Web3

The key to educating non-crypto-native users is to create an experience that allows fans to easily onboard and engage in high-functioning product experiences around social tokens, but still retain the flexibility to trade assets, monetize, and extract value as needed.

Of course, different consumer products require different approaches. For Rally, we’re already building on the sidechain, so it made sense to go with escrow from the start. Just like the progressive decentralization we envision for the RLY ecosystem, we decided that the best approach for Rally is to provide a familiar experience to end users first, and build out the scaling mainnet and autonomy over time hosting capacity. But other products make different decisions; for example, decentralized exchanges, daily fantasy sports, or hardcore games that cater to high-spending users may be better suited to adopting an uncustodial experience from the start. The increased sophistication and need for trustlessness in these user bases guarantees them an unmanaged user journey from the start.

Managed Experience Means Infrastructure Requirements

Of course, building applications for managed assets has its own hurdles and challenges, namely compliance and security. Allowing users to move from custodial to non-custodial wallets means that user identity verification (KYC) and anti-money laundering (AML) checks will be inevitable. Additionally, by hosting assets, you also take on the risks associated with keeping those assets safe on behalf of your users in the face of some very sophisticated attackers.

Now, crypto companies are largely doing this on their own. Either build and manage the infrastructure yourself or find one of the few trusted partners. This is no small task for Rally — it can be done, but it’s not straightforward or cheap. The simple fact is that there really isn’t any normative advice when it comes to compliance, as there are many factors that determine a crypto project’s compliance strategy: What stage of growth is the company at? In which jurisdictions does it operate? What is the level of risk tolerance of leadership?

A good example of how two different approaches work is Coinbase and FTX. Coinbase, which has always been based in the United States, has taken a cautious approach to custody, investing heavily in compliance. FTX, on the other hand, mitigates risk by first launching outside the US and growing the company internationally. Both approaches have proven successful among users.

In fact, we are currently seeing a new wave of crypto adoption coming from emerging markets that were previously overlooked by Web2 companies, and they were unable to monetize their advertising models in these regions. The unmanaged experience makes emerging markets really easy to enter because the app is not responsible for compliance. Managed experiences, on the other hand, involve a thoughtful approach to enabling these users to work across a single payment provider. For example, credit cards are often declined in these regions, yet there are often “non-traditional” channels such as cash purchases of crypto tokens at 7/11 stores. Even how and where you set up your company can affect what kind of hosting experience you can offer.

But as large Web2 social and financial platforms like Facebook, Twitter, Square, and PayPal begin to push crypto tokens further and demand more services, the ecosystem will grow rapidly, and finding reliable and affordable partners will become even more difficult easy.

Growing demand for Web3 access

We are closer to this evolution to Web3 than many realize. Arguably, within five years, more than half of the large Web2 platforms will have initiated initiatives to embrace Web3 in some way, likely taking into account many of the UX principles described above.

There is no doubt that there is a pent-up demand, and it will only grow. When Robinhood announced that it would launch its crypto wallet immediately at Messari’s Mainnet conference in September, everyone expected a big reaction. After all, a standalone crypto wallet is one of the company’s most requested features. This will allow Robinhood users to send their coins from the company’s platform to any address they wish.

But even the most bullish on crypto may not have anticipated how enthusiastic users will be for Robinhood’s wallet. The company’s co-founder, Vlad Tenev, told the CNBC conference that the waiting list is well over a million names, and that’s for a company that will launch sometime in the next quarter. item function.

The huge interest in the Robinhood wallet hints at something else in the crypto-token portfolio. After all, users already have a slick, fun, and secure environment for trading coins in the Robinhood app. Why do so many people yearn for a wallet just to be able to send coins out? Clearly, people want to move their cryptographic tokens to participate in other cryptographic protocols and store their assets differently.

The path to the next iteration of the internet will become clearer as more applications strive to meet the needs of users and lead them into new experiences, and as cryptographic infrastructure becomes cheaper and easier to use for projects.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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