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We’ve grown accustomed to the poor user experience of Web2, but it’s quite frustrating. We juggle dozens of financial app accounts, endure days-long waits for bank transfers, chase down email confirmation codes, constantly recreate our social networks in new apps, and generally slog through the digital landscape.
Imagine still calling a taxi dispatcher, anxiously waiting for the taxi to arrive, and then fumbling with payment in traffic. Soon, we’ll just tap a button on our phones. Emerging crypto technologies are set to transform the Internet’s usability to such an extent that users will expect this enhanced experience from their apps, even if they aren’t aware that crypto powers it.
Near-instant, low-cost Layer 2 solutions are a clear improvement. However, four additional breakthroughs will propel us far beyond the limitations of web2:
Passkeys
Passkeys offer a secure and convenient alternative to traditional passwords and private keys. They eliminate the need for memorization, are theft-proof, and require no manual entry. These keys are effortlessly created, securely stored on your devices and in cloud backups, and can be readily accessed for signing messages or transactions using your device’s PIN or biometric authentication. Major companies like Amazon, Google, LinkedIn, Shopify, and Uber have already adopted passkeys.
Web Wallets
Web wallets, described by the Capsule team as “cross-app embedded wallets,” do not require a mobile app or browser extension to operate. They align with users’ expectations by offering a single sign-on experience, replacing the awkward “Connect Wallet” process currently seen in crypto.
Enabled by passkeys, these wallets eliminate the need for signing in via Google, Apple, or Twitter and allow you to maintain a consistent identity across different apps, unlike today’s embedded wallets.
Smart Contract Accounts
Smart contract accounts and paymasters will significantly simplify user interactions by abstracting gas fees, consolidating multistep transactions into a single process, and enhancing account recovery options. Users will be able to assign highly restricted permissions, or “session keys,” to specific apps, enabling these apps to conduct transactions on their behalf. This will allow for one-click transactions without the need for confirmation pop-ups, similar to how some apps can post tweets for users.
Open Social Graphs
New social protocols like Farcaster are delivering on the original promise of social apps by creating resilient social graphs linked to users’ on-chain addresses. This allows any app recognizing your address to immediately offer a personalized and social experience upon sign-up.
For upcoming platforms like the Next Friend. tech, Nikita Bier special, or Airchat, you’ll “sign in with [Coinbase, Capsule, MetaMask, Binance, etc.]” as effortlessly as you currently do with Apple or Google.
No more 24-word backup phrases, wallet app downloads, or glitchy WalletConnect processes. You won’t be asked to input emailed 6-digit codes or cycle through multiple Google account passwords. Instead, you’ll confirm your identity with a passkey—simpler than today’s standard SSO flow.
Upon entry, the app will instantly personalize your experience, integrating your on-chain history and social graph. No more dark patterns coaxing you to share contacts; your friends will already be there.
There is no waiting 72 hours for ACH transfers to fund your Robinhood account. There is no need to transcribe credit card details or manually transfer funds between wallets. Your funds will be readily accessible via your web wallet.
In just 30 seconds, you’ll go from having no bracket to having one. Game account to bet on sports teams alongside your friends, compared to the previous 3-day ordeal. Visit-to-activation rates will soar from 1% to over 10%, much to the delight of product managers everywhere.
Crypto triumphs by enhancing Internet usability, compelling every web app to adapt. At last, we’ll have a compelling answer to “Why build this on crypto?”
The Implication
Exchanges need to transform themselves on-chain by developing web wallets for their users. For instance, look at Coinbase Smart Wallet—select the blue “Create a wallet” button instead of “I already have a wallet” when prompted.
Wallet apps aiming for mainstream adoption should incorporate web wallet options.
Providers of embedded wallets should focus on delivering cross-app experiences, akin to Capsule, Dynamic’s upcoming global wallet, or Privy’s forthcoming global wallet.
Apps should leverage Farcaster instead of building their social graphs from scratch.
In this interconnected, address-aware landscape, user acquisition will be more effective through affiliate programs like those of GMX and Lido. Dapp creators should either implement their programs or utilize services like Spindl and Fuul.
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