Someone asked me today, “What do you think are the blockers to mainstream web3 for the next cycle?” I thought I’d share what I see as blockers to mainstream adoption, which mostly have to do with L2 and wallets.
- Products need to move onto L2 networks
- Exchanges need to provide cheap on-ramps directly to L2
- Products and specifically wallets need to abstract L2 networks.
I’ve written this out here and also experimented with sharing in video format. Let me know if the video format is helpful.
Products and projects need to move or start on L2 networks
The thing that killed each cycle was that Ethereum L1 didn’t scale and became expensive to use. This was very clear in the “DeFi summer” of 2020, and the NFT explosion in 2021. Transaction fees became too expensive and it priced people out. Eventually, only whales could afford to make profitable trades in DeFi, and only large speculators would mint Yuga Labs NFTs in 2021.
Exchanges need to provide cheap on-ramps directly to L2 (for a few cents)
We shouldn’t expect users to buy ETH and bridge to L2. Users need to purchase L2 tokens directly from exchanges with fiat, and then send them cheaply into the L2 networks so that they can use those products. We should look at apps like Coinbase to help onboard users to L2.
Products and specifically wallets need to abstract L2 networks
It doesn’t matter whether someone uses MasterCard or Visa these days. All of the payment processors can handle either and they abstract the differences. The same thing needs to happen with L2 networks, and it’s likely the wallets the need to take on this task.
Different products will launch on different L2s. It’ll be messy if we expect users to navigate all of the different L2s, and so wallets (Coinbase Wallet, Rainbow, Argent, etc) need to abstract the L2s and provide ways to bridge between them seamlessly. The user shouldn’t need to care that they have Arbitrum ETH tokens but want to use Mirror, which is on Optimism.