Let’s start by examining the global crypto economy as of today.
When you ask someone about the health of Ethereum right now, the simple answer you get is; “look at DeFi, it’s all gravy”. And rightly so to some extent. The numbers speak for themselves…
However, if you want to understand the true health of the Ethereum network, you have to go deeper. There are three metrics, in particular, which stand out:
This is the 90 day moving average of transactions taking place on the network—a simple proxy for overall network activity.
This is the 90 day moving average of the USD value of the median fee per transaction. A proxy for how much users are willing to pay to use the network.
This is the ninety-day moving average for internal contract calls; smart contracts calling smart contracts. A proxy for the health of Ethereum's composability.
Taking all this together, Ethereum is looking rosy. The direction and rate of change are all clear. However, one metric tells us that we’re not yet ready for prime time:
The direction may be up and to the right, but there are only 500,000 daily active addresses on Ethereum (out of c.130m unique addresses). Gmail has almost 2 billion users. Microsoft Teams has over 100 million daily active users. Square’s cash app has over 10 million daily active users, just in the United States.
What’s stopping Ethereum (and crypto more broadly) reaching 100 million-plus daily active users?
One of the biggest questions we always ask ourselves at Eden Block is what the blockers for crossing the chasm to early mainstream adoption of blockchain and crypto are?
We believe that part of the answer relates to friction. Technologies that reduce friction expand markets. Great examples are Airbnb in the hotels market, Uber for taxis, WhatsApp for text messaging.
The Biconomy team is building transactional infrastructure for the decentralised web. Its platform abstracts away crypto transaction complexities for both developers and users.
A critical difference between Web2 and Web3 products is that users of traditional web and mobile applications never interact with the backend infrastructure that runs the application. You click into an app but never pay for the app’s server or storage costs.
On the other hand, to interact with a dApp, the user has to pay the network’s infrastructure cost (gas) for interacting with the smart contract in question. They are also subject to the difficulties of gas price volatility and mempool congestion.
While crypto’s promise is one of user empowerment and freedom from state control and the tech behemoths, crypto user experience (UX) acts as a massive barrier to those other than true believers and visionaries.
As per, Ahmed Al-Balaghi, Co-Founder and CEO at Biconomy, “the ways in which users can use blockchain applications needs a complete overhaul. Netflix does not charge its users a fee every time they watch a video, so why should dApps charge users a gas fee for every interaction? This is the vital difference between a web2 application and an over-complicated web3 one”.
An order of magnitude better experience for users, like what Biconomy offers, is something we strongly believe is part of the equation for unlocking the next wave of crypto adoption.
Developers are very aware of the need to improve UX in crypto; however, resource constraints also mean allocating developer time to a seemingly second-order priority often isn’t feasible.
Managing meta-transactions, transaction batching, and gas optimisation, etc., at the backend is a nightmare; problems with the crypto transactional layer include but are not limited to:
Biconomy solves developer problems with just three lines of code:
With Biconomy, developers can make their dApps better through:
Without overstating things, fixing the balance of how much time developers spend on back-end transaction management versus improving their product offering will have a big part to play in crypto crossing the chasm to mainstream adoption.
The future will contain many different blockchains using many different layers - from layer 1s like Bitcoin and Ethereum, application-specific chains like Flow, Pocket Network and Nym - to layer 2s xDai, Matic, Optimism, and more. Every protocol cooperating and competing in a dance of coevolution will result in ever more complex structures over time. As a result, accessing the dApps that leverage these underlying chains will also grow more complex.
Complexity isn’t necessarily bad; we welcome the crypto ecosystem’s adaptation and evolution with two hands. We expect that Biconomy, and new platforms with a similar mission, will continue to remove the barriers to help new crypto businesses and dApps get started, and cross the chasm to mainstream adoption.
To achieve its mission, the Biconomy team is following a path of progressive decentralisation. This will likely start with generalised liquidity pools to unlock user funds stuck in layer two platforms. They will then begin to prioritise elements that move to a community ownership model and making their infrastructure more anti-fragile.
This sensible approach to scaling and decentralisation is something we fully support; the developer and user pain points are too real right now not to deal with them first.
If you’re a dApp developer and interested to hear more, join Biconomy’s discord here to get in touch.
Disclosure: Eden Block is an investor in Biconomy.
Nothing contained herein constitutes investment, legal, tax or other advice, nor is it to be relied upon to make an investment or other decision. This presentation includes the opinions of the author, and such opinions are subject to change without notice. Furthermore, it may also include data and opinions derived from third party sources. Eden Block does not accept liability for the accuracy or completeness of any such information or opinions which can be subject to change without notice.