From: thepipeline_xyz
The current state of blockchain infrastructure faces significant hurdles, particularly concerning scalability, performance, and user experience. Experts in the field highlight that despite rapid advancements, many foundational issues persist, preventing mass adoption and the realization of “web3” ambitions [13:51:00].
Scalability and Performance Issues
A primary concern is the limited capacity of existing blockchain networks to handle a large number of users and transactions efficiently.
- Older Ethereum Virtual Machine (EVM) implementations are described as “slow, clunky, [and] broken” [01:13:00].
- Even networks attempting to onboard “the next million users” often fail to accommodate just 50,000 users without gas fees soaring “through the roof,” making the network “literally unusable” [02:21:00].
- The vision of “everyone on chain” cannot be achieved with the “prehistoric EVM” [02:53:00].
- Current execution layers are widely considered inadequate [06:56:00].
- Applications like GMX, when experiencing high volumes, cause gas fees on Arbitrum to become prohibitively expensive, leading users to abandon the platform [09:37:00].
- Inconsistent gas fees on networks like Arbitrum can “wreck” a user’s trading strategy, especially for average users dealing with smaller capital amounts [09:50:00].
- Social and payment applications are “definitely not ready” for widespread use on current infrastructure [10:21:00].
- It is acknowledged that if a single application achieved the user base of a successful Web2 app like Instagram or Facebook, “every blockchain today would break immediately,” including Solana [11:02:00].
- There is a common misconception among non-technical individuals that blockchains are fully ready to scale and handle any application [13:42:00].
Data Availability as a Bottleneck
One of the significant bottlenecks, particularly for rollups, is data availability.
- Traditional rollups like Arbitrum and Optimism, despite supporting next-generation Virtual Machines (VMs), still face this “biggest bottleneck” [04:09:00].
- Projects like Movement Labs partner with solutions like Celestia to address high gas fees associated with data availability on Ethereum [04:16:00].
Security Vulnerabilities
Security remains a critical issue, with significant financial losses due to smart contract vulnerabilities.
- Annually, an estimated $4 billion is lost due to smart contract hacks [24:03:00].
- Incidents like the KyberSwap attack highlight the ongoing risk of assets being held hostage [24:08:00].
- Such incidents are “horrific” for the industry and create a significant “risk” for everyday users, hindering broader adoption [24:56:00].
Developer and User Experience Barriers
The complexity and limitations of current blockchain systems also pose challenges for developers and users.
- It is difficult to attract developers to write in less common languages like Rust for Solana [07:03:00].
- A financial disincentive exists for developers not to use Solidity, as “all the volume, TVL, etc.” is on EVM chains [07:15:00].
- The need for developers to learn new, “untested” programming languages is a barrier [07:41:00].
- User experience for basic actions like sending money internationally is cumbersome and expensive, often involving “three different providers” and significant fees [35:55:00].
- Complexities like managing wallets and seed phrases are difficult for new users to grasp [36:26:00].
- A significant amount of “damage” was done to crypto’s perception during the 2021 bull market, particularly regarding “web3 gaming” and NFTs, leading to a public perception of the industry as a “scam” [39:17:00].
- A major challenge in gaming is not just making a game “on-chain” but first creating a “fun game” [38:21:00].
- Many crypto-native games have been “Ponzi games” or targeted towards “Ponzi mechanics,” which, while a “great growth strategy” for some, contribute to a negative public perception of “scammers” [40:27:00].
Centralization Concerns
Modern rollups face centralization challenges, particularly with their sequencer sets.
- A decentralized sequencer set is being developed by Movement Labs to address the centralization points seen in contemporary rollups [04:31:00].
- Traditional decentralized sequencers are often “very unprofitable,” making it difficult to incentivize large entities to adopt them [05:07:00].
Current State and Future Outlook
Despite these challenges in blockchain system design, there’s optimism within the industry.
- New alternatives are emerging to address the shortcomings of the old EVM [01:19:00].
- Projects like Monad and Movement Labs are working on solutions to enable performant blockchains that can meet demand [02:58:00].
- While a Facebook-level of users would still break current chains, there is now “line of sight on the solution” for scaling blockchain ecosystems [11:30:00].
- The infrastructure is considered “99% there,” with significant investment having gone into solving issues like data availability cost and EVM limitations [20:18:00].
- The industry is shifting focus from infrastructure building to enabling actual application use cases [21:12:00].
- New architectures are being tried, providing a “line of sight on scale” [12:21:00].
- Tribalism among different blockchain ecosystems is breaking down, fostering a more collaborative environment for solving problems [14:58:00].