Blockchain applications mainstream — What they lack and Who is solving
2020 is the momentum year for dApp usage. For Ethereum, the first smart contract platform, the daily active unique wallets across the Ethereum dapp ecosystem rose 118%, Source: dApp radar.
Ironically, today there are approximately 50 Million+ users using blockchain-based wallets, Source: Statista. Most of these wallets are for the store of value or inactive for a long time. Very few users (proportionally) have experienced dApps. As of this writing, more than 5000 dApps exist, of which less than 900 are active. Source: dapp.review.
Undoubtedly, blockchain is still on the look-out for its mass adoption, a perfect use-case that can set its path to becoming a usable technology adopted by wide users and developers.
Many would argue at this point that decentralized applications have taken a step back due to scalability issues, however, the speed of a platform isn’t relevant, unless the platform has sufficient adoption to require that throughput.
Let’s look into the case of DeFi dApps. It may seem that DeFi has picked mainstream adoption, however, a survey by ARPA in July 2020 found that only 1% of 5 million crypto traders have used decentralized finance protocols. One of the reasons is the complexity to use applications and poor user experience.
What we are really missing is ‘End-user usability’. If users don’t understand your app, they won’t use it.
One of the frequently noted criticisms of decentralized applications is the fact that they are not as easy to interact with as Web 2.0 applications like Instagram. Web 2.0 has mainly been about improving platform front-end experience, enriching usability, and interoperability for end users. It allows users to interact or collaborate to create user-generated content. As a result, data generated by the user is owned by the app creator.
In contrast Web 3.0 refers to altering the Web into a database where data isn’t owned but instead shared. Distributed Ledger Technology is one of the examples of Web 3.0 applications where the ledger (or database) is not owned and maintained by one person but rather shared by all.
Though Web 3.0 enables the upgrade of the back-end of the web, developers should not forget the interaction aspect users like in Web 2.0 applications.
The following points explain users’ or developers’ hurdles to using blockchain applications.
(1) Why I’m paying for it:
Internet users are surrounded by ‘freemium’ model-based applications wherein users have an option to either use limited-service for free or pay for premium features. For a service that’s new to the market, offering a ‘freemium’ version is a quick way to drive user acquisition.
In contrast, blockchain applications cost gas (transaction fee) every time users interact with the application. “Imagine playing your childhood popular video game — Mario and paying a transaction fee for each move” How does it sound? Such an app would face difficulty in acquiring users and therefore, would limit its wide adoption.
(2) Difficult to build apps:
For developers to build applications on Ethereum, they have to learn an entirely new language — ‘Solidity’. It takes a long time for developers to learn and write smart contracts. Developers can make simple mistakes which can cause huge consequences like security breaches or high transaction costs.
Some of the most well-known examples of a poorly written smart contract code are:
- Decentralized Autonomous Organization (DAO) hack — 3.6 Million Ether was stolen (Read for more details >> DAO Hack)
- Bug discovered in the smart contract used by Parity, which was exploited and resulted in the loss of 0.5 Million Ether (ETH), worth more than $280 million. (Read for more details >> Parity Bug).
Given the difficulties in building decentralized applications, developers restrict their application design to the stage of a minimal viable product.
(3) Not so easy to navigate and use:
Blockchain developers put a lot of focus on the back-end but forgot to consider front-end experience. For a potential user who never heard of cryptocurrency, exploring decentralized application might look something like this:
- Check registration process
- Learn about security key to unlock application
- Learn about wallets, Metamask or Trust wallet
- Understand native token, buy some
- Probably search for YouTube video
- and most likely Close the window with a promise never to return.
Comparing this to a new user for a traditional website/application:
- Register (with Google, Facebook, etc and credit card details)
- Use platform
The above-described issues limit the decentralized application to reach its full potential. Therefore, a new model for blockchain protocols is needed which not only works on scalability but also provides a better blockchain development tool and simplifies the experience for end-users.
The past year brought these issues into the limelight and many companies and developers now seek to minimize this troublesome experience. One such startup, NEAR protocol, is working to introduce new thinking in the blockchain architecture and programming model. Here is how NEAR solves these challenges.
Introducing NEAR Protocol:
NEAR Ⓝ is a sharded, developer-friendly, proof-of-stake scalable-public blockchain built from the ground-up to make it easier for developers to build on and onboard users. Currently running in the main net, users experience fast transaction settlement (3-second finality) in NEAR based dApps, with gas fees 10,000x less compared to ETH-based dApps.
It lets users try out decentralized applications the same way they try all other apps — for free. Developers can prepay transactions for them so that their users don’t need to work out how to buy crypto tokens on an external exchange in order to start using the applications. Additionally, NEARⓃ introduces progressive security which allows users to sign up (or register) for the application using email, the same way they would sign up for other applications from Web2.
This way users get time to progressively learn about decentralized applications, allowing easy on-boarding of users to the platform. Once the users are ready to commit, they can link their account security once without a need for any browser extension like Metamask.
In NEAR Ⓝ, developers can write blockchain smart contracts using familiar languages — AssemblyScript and Rust, for starters — that compile to WebAssembly. AssemblyScript lets you write fast and tap into a vast pool of existing web developers to build your team, while Rust gives you the advantage of strong type safety and formally verified runtime to prevent costly smart contract bugs.
This makes it easier for developers as they don’t have to learn a new niche domain language. The combination of the test environment, suits, flexibility to develop smart contracts in familiar programming language enables developers to build a feature-rich application in NEAR protocol and provide a delighted user (customer) experience.
Additionally, Developers building on the NEAR protocol can straightforwardly set a developer fee percentage that is charged in addition to transaction fees any time their smart contract is called. For e.g., monetization of one game asset use in other games. This opens up a whole range of automated royalty and licensing-based business models that were previously hugely difficult to implement on a blockchain.
With the emergence of every new computing paradigm, there is a significant amount of uncertainty over how exactly it can be most effectively utilized and what it means for the future of innovation. Blockchain is no different. NEAR protocol acknowledges the universe of possibilities and developer/ user constraints. NEAR protocol not only solves the issue of speed, gas fee but also improves the users and developers onboarding process, making it possible for even blockchain novices to participate.
For interested developers, the NEAR protocol includes a developer program wherein developers can leverage NEAR walkthrough tutorials to create their first dapps. Once ready, they can use NEAR protocol’s test environments to pivot their blockchain apps. Additionally, developers can connect to NEAR’s global community who will do everything possible to support you to build and enhance your application.
Blockchain applications mainstream — What they lack and Who is solving was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.