From: thepipeline_xyz
Onboarding new users to the crypto space presents significant challenges, primarily due to the complexity and friction inherent in current processes [03:08:19]. The ultimate goal is to simplify the user journey to be as seamless as traditional Web2 platforms like Robin Hood, where users can go from account creation to action in just a few clicks [03:09:01].
The Current State of Crypto Onboarding
For a typical non-crypto or regular crypto user, the current onboarding experience involves several cumbersome steps [03:08:25]:
- Discovering an application link [03:08:33].
- Downloading and managing a seed phrase wallet, often requiring users to write down keys [03:08:40].
- Navigating through multiple front-ends of various crypto applications, which can be confusing [03:08:52].
- The necessity to fund a wallet or spend money before being able to interact with crypto [01:19:47]. This often results in fear, risk, and friction as a user’s initial experience [01:20:11].
The process is often described as “clunky” and involves hopping between Web2 discovery platforms, Web3 wallets, various blockchain ecosystems, decentralized applications (dApps), and finally, the desired action [03:09:31]. This multi-step journey is a “broken problem” that creates too much friction for mainstream adoption [01:19:55].
“We need to prioritize blockchain in a way that’s not through vanity numbers or botted block space but prioritizing real users and meeting them where they are instead of forcing new or hyperfinancializing alien habits” [04:10:07].
Specific Friction Points
Specific examples highlight this friction:
- Uniswap V3, while aiming for capital efficiency, introduced a user experience that some found “not ideal,” often requiring users to interact with two protocols instead of one for optimal results [01:15:23]. This points to the cumbersome nature of composable DeFi when not properly abstracted [01:15:56].
- A single perpetual trade on a platform like GMX, which involves bridging assets and gas, finding contract addresses, and navigating multiple websites, could take over six minutes and 73 clicks for an experienced user [03:53:34].
Impact on User Adoption
The difficulty in onboarding contributes to:
- Low long-term retention: For augmented reality (AR) gaming, long-term retention often falls to 5-10% after 30 days due to a lack of engaging content, social features, and personalization [02:38:35]. This suggests that without a smooth initial experience and continued engagement, users quickly drop off.
- Limited reach: Currently, on-chain trading volume is only about a tenth of centralized exchange (CEX) trading volume [03:43:02]. This indicates that the onboarding barrier prevents a larger mainstream audience from participating in decentralized finance.
Strategies to Improve Onboarding
To address these challenges, various strategies are being developed:
Abstraction and Simplification
- Hiding crypto: Platforms are being designed to ideally “completely hide crypto” from the user, making it simple and relatable to anyone with an internet account and mobile phone [01:20:29].
- App abstraction: This involves abstracting individual features from dApps into modular primitives that can be used to build new Web3 experiences [03:11:10]. This can reduce onboarding time by as much as 40%, from nearly two minutes down to one [03:13:46].
- Single sign-on and embedded wallets: Utilizing social logins like Google for wallet creation eliminates the need for users to deal with seed phrases or manage complex wallet transactions [03:14:03]. Interoperable embedded wallets mean that funds in a newly created wallet can be used across different applications, reducing friction [03:18:05].
- Pre-loaded funds: Giving users their first 10 upon engaging with a brand can create a positive first experience, shifting from fear and risk to reward and engagement [01:20:02].
Enhanced User Experience (UX)
- Mobile-first design: Creating intuitive mobile experiences, such as Tinder-style interfaces for product discovery in e-commerce, can make interactions more engaging and provide valuable preference data [02:29:15].
- Gamification and incentives: Incorporating tokenized rewards points, like those for swiping or completing tasks, can increase stickiness and boost conversions [02:59:51]. Examples include earning points for sharing on social media, leaving reviews, or visiting restaurants [02:53:40].
- Integrated functionality: Platforms that combine multiple DeFi primitives, such as lending and exchange functionalities into one protocol, can significantly improve capital efficiency and simplify the user journey [01:07:07].
Building Trust and Community
- Verifiable credit and data: New systems are being built to ensure trust in credit markets through verifiable data, allowing lenders and borrowers to reconnect after past incidents like the Ortogonal Trading scam [01:14:09]. This includes using zero-knowledge proofs for sensitive data sharing [00:51:50].
- Reputation-driven referrals: Creating platforms where professional networking is gamified and incentivized through trusted referrals can lead to higher quality interactions and overcome the problem of spammy cold outreach [02:04:48].
- Community-led expansion: Empowering a community to drive merchant onboarding and regional expansion allows for faster and more cost-effective growth, as seen with Plato in Japan [02:56:06].
The Vision for a Seamless Future
The ultimate vision for crypto onboarding is a future where the experience is so seamless and integrated that users may not even realize they are interacting with blockchain technology [01:24:03]. This transformation aims to:
- Reduce the need for extensive user education [03:13:32].
- Make financial services more accessible and intelligent through AI integration [02:14:08].
- Enable complex transactions, such as cross-chain trades, in just seconds with minimal clicks [03:55:24].
- Unlock institutional capital by de-risking participation in DeFi through mechanisms like credit default swaps for pegged assets [00:53:50].
- Support a massive growth in on-chain activity, potentially rivaling and surpassing centralized exchange volumes [03:43:02].
By focusing on user-centric design, reducing friction, and leveraging advanced technologies like AI and seamless interoperability, the crypto industry aims to onboard billions of users and integrate blockchain into everyday life [01:19:11].