Written by: Wu Tianyi, DeThings
It is another year of Singapore Token2049, and the Merlion looks similar every year. However, unlike previous events, this year, under the bleak background of the industry, "Mass Adoption" has become the most frequently used phrase during this 2049 period. Unlike the previous context of "beautiful vision", this round of market mentions this word again, with a hint of urgency - only "To C" can save the market.
The market environment is becoming increasingly severe. The previous cycle performed poorly, LPs are more cautious about risks, and VCs are more strict in selecting entrepreneurs, which makes financing more difficult. At the same time, the listing conditions of exchanges are constantly tightening, industry confidence is frustrated, and project valuations generally decline. In addition, the user activity of Web3 projects has dropped significantly, and the airdrop strategy is not effective, making it difficult to effectively retain users.
In this context, project owners are gradually returning to real applications. If real applications want to reach users, they must open up the "last mile" - both online and offline. They need to work hard on deposits and withdrawals and payments, and also need to truly reach offline stores and cover the consumption scenarios of ordinary users.
The market forces project owners to return to practical applications
During the conference, the Tada taxi-hailing robot on Telegram can be said to be the Web3 application that is closest to "Mass Adoption" and covers real scenarios. The reason for using it is also simple. New users have a free quota of 60 SGD and a subsequent 50% discount. To use the Bot, you need to connect to a crypto wallet and use USDT or TON for payment.
For a "crypto person", this is very simple. But for other users, they need to register a crypto wallet, convert fiat currency into cryptocurrency, and then connect the crypto wallet to the app. Compared with other taxi apps that only require binding a credit card, how many users are willing to "enter" the crypto world when there is no discount?
In 2023, with 617 million global cryptocurrency holders, it is not just growth, but saturation. The industry is facing a threshold similar to Tada. How to allow people who have never been exposed to the crypto industry to enter is the key to mass adoption.
However, during this 2049 period, we can see that Internet thinking is "invading" Web3, which is a manifestation of valuing users. "Every time a user clicks on an additional interface, the desire to consume will decrease by 20-30%." A founder of a payment project told me in an interview. Another founder of the Depin project said, "Users don't care about the Web, we have to make a good product first." This is the consensus of the Internet industry, but there have been few similar voices in the Web3 field before.
Financial actions can no longer satisfy the current market. When Ethereum founder Vitalik faded away from his almost religious idol fanaticism, Ethereum and DeFi were replaced by a downturn. The way of attracting financing with white papers and PPTs is no longer feasible, and the industry urgently needs to return to practical applications.
In addition, "Mass Adoption" not only needs to open up the "last mile" for users to enter Web3, but also puts higher requirements on infrastructure construction. Therefore, projects in tracks such as Depin, RWA, stablecoins, and payments have begun to explode. At the same time, the savings, payments, lending, and investments represented by these fields cannot be limited to isolated systems, but must be closely integrated.
The giants’ response
Combining practical applications and user thinking, more and more industry giants have responded. One of the hot topics of this conference, "PayFi" proposed by Lily, president of the Solana Foundation, is a good example. Similar to it is the "consumer application" mentioned in the speech of Vitalik, the founder of Ethereum. The core of PayFi is the sending, receiving and settlement process of cryptocurrency, rather than the transaction behavior. It emphasizes the "time value of money", that is, due to factors such as opportunity cost and interest rate, the current currency is more valuable than the currency of equal value received in the future.
What PayFi needs to do is to help users maximize the time value of money. For example, Buy Now Pay Never is paid with the time value of money, and creators realize cash and accounts receivable by paying the time value of money to get money now.
This model truly breaks away from the speculation-driven adoption of cryptocurrencies. It not only covers cryptocurrency payments and transactions, but also includes a variety of financial activities such as lending, financial management, and cross-border payments. Through decentralized technology, PayFi makes financial activities faster and safer, and reduces friction and costs in the traditional financial system, thereby promoting seamless value transfer and financial inclusion around the world.
This concept places higher demands on current blockchain technology. With the surge in transaction volume, the Solana network may become congested, resulting in a decrease in transaction speed. Secondly, Solana currently only achieves 1.6% of its theoretical maximum speed of 65,000 TPS. In addition, from January 2022 to February 2023, Solana experienced interruptions in 7 of the 13 months, and the longest interruption lasted more than 24 hours. Solana also experienced an interruption in February this year. If it were the current large banks or multinational payment networks in the Web2 field, this would be unacceptable.
Moreover, if you want to realize PayFi or "consumer applications", online consumption alone is far from enough. It is also necessary to open up the "last mile" in the physical sense. Taking Web2 institutions such as Visa and Alipay as an example, the scenario for achieving large-scale application is that users can use Visa's POS machines or Alipay's QR codes to make convenient payments in offline stores. Large-scale adoption will only become possible when crypto applications reach offline.
Even to truly realize the meaning of Web3, i.e. the "next generation of the Internet", it is still not enough to simply use dApp or crypto credit cards for convenient offline and online payments. Instead, while users are spending, their cryptocurrencies are stored on the chain and circulated without barriers, while generating income through lending projects, greatly reducing the friction of deposits and withdrawals, and retaining the original advantages of cryptocurrencies such as anti-centralization and non-tamperability. At this time, cryptocurrencies may truly show their appeal beyond "money laundering", and Web3 will truly become the "future".
When Bitcoin reaches $100,000, will our lives be better?
Looking back at the birth of cryptocurrency, the original vision of Bitcoin was to create a peer-to-peer electronic payment system while fighting against centralized finance. However, with the passage of time, Bitcoin has become a value savings system. The approval of Bitcoin ETF has further strengthened the financial attributes of Bitcoin. If MEME coin is speculation by retail investors in the context of a sluggish market, then Bitcoin ETF has become speculation by institutions.
However, imagine this question: when Bitcoin reaches the $100,000 mark one day, will financial inclusion be achieved and will our lives be more convenient? The future of Web3 needs to leave the carnival of a few speculators and enter the real world. The good news is that such a trend is gradually emerging, even if it takes ten, twenty years, or even until 2049.
At a hackathon held by Solana, a project founder shared the view that "the role of Web3 is to improve production relations, not to increase productivity. In fact, Web3 will reduce productivity to a certain extent." This means that if Web3 wants to achieve large-scale applications and attract some of the remaining 6 billion people in the world, it must not only go through the path that Web2 has taken, but also make more changes.
