For crypto to gain traction beyond its niche of early adopters, it needs to offer a user experience that matches or exceeds that of legacy platforms.
“By not optimizing user experience correctly, crypto products are losing a lot of potential customers if they don’t implement the optimal processes,” Marcus Bengtsson, chief marketing officer at KYC firm Checkin.com, told Decrypt.
“Each 1% of conversion loss compounds to thousands of dollars in revenue loss, relative to your customer value.”
Historically, crypto, Web3 and DeFi have struggled with UX challenges, from complicated wallet addresses to labyrinthine onboarding processes. But that’s set to change.
The Web3 industry is moving at a brisk pace to make it easier for anyone to start using the technology without prior knowledge. Here are five key technologies that are already helping to smooth the Web3 user experience for the better.
1.MetaMask Snaps
“Crypto has this reputation for being difficult to use, but there are so many lessons available from Web2 products that can be quickly implemented to improve the user experience,” said Bengtsson.
MetaMask is one such product taking a leaf out of Web2’s book. The crypto wallet has become the backbone for how many Web3 users interact with decentralized apps. It serves more than 30 million active users and is compatible with 17,000 Web3 protocols and applications.
Although widely used, the wallet has not been without its detractors. The user experience, according to reviews, has been slow to update and modernize. But the arrival of MetaMask Snaps promises to remedy many of these issues.
Snaps are third party apps that can be used to enhance the experience of using the wallet. The Web3 equivalent of an App Store, Snaps can be used to connect to blockchain protocols beyond Ethereum, show insights about transactions, display notifications, add new privacy and identity features, and much more.
Snaps are, it is hoped, a new way for users to run decentralized apps (dapps) and wallets through MetaMask’s UI. They create pathways both between Ethereum dapps and other blockchains such as Solana, allowing independent developers to create and integrate plugins that extend the capabilities of MetaMask and provide users with more options.
1.Streamlining KYC
Know your customer (KYC) processes have become standard practice across the industry for platforms looking to transact in the space and adhere to regulators’ compliance requirements.
In the past, the process of validating that a user is who they say they are was often convoluted, with platforms using different third-party providers to verify, and some taking days or even months to establish a user’s credentials.
It’s hardly surprising, then, that crypto users are “right to be cautious about where and who is storing their personal data,” Bengtsson said.
But that’s changing. KYC solutions are now simpler and becoming more streamlined across platforms. Companies like Checkin.com are leading this evolution, said Bengtsson. “Products can see this as a strength—that if they do the KYC process in a good way, the users will feel safer, their operations will be safer,” he told Decrypt.
Based in Sweden, Checkin.com cut its teeth building KYC solutions that can adapt to the regulatory environments of the countries where customers are based. Since launching in 2017, it has carved out a niche providing simplified KYC solutions for firms like Ryanair, payments provider DECTA and companies in e-commerce, edtech, healthcare and iGaming. Now, it’s helping crypto companies to become KYC compliant, too.
Checkin.com can perform KYC checks and ID scanning in 165 countries, meaning projects have a one-stop-shop for all their onboarding needs. It does this by deploying AI to create a localised onboarding experience. All the data is heavily encrypted and meets GDPR standards for data processing.
For financial trading platform Admiral Markets, which offers crypto trading, having KYC that can adapt to where its customers are is vital. Crypto products are available anywhere there’s an internet connection, but regulation restricts what types of services are on offer.
“Due to the evolving nature of laws in each jurisdiction, it quickly becomes very complex for products operating in multiple markets to ensure they are performing the correct KYC process in each jurisdiction,” Bengtsson said. “Here is where our product really shines, since it solves this and the user experience across over 165 markets out of the box.”
Bengtsson explained that local considerations affect the development of KYC processes. “The best way to collect an email address is different in China as it would be in Germany,” he said. “There are also cultural factors at play too. So in Sweden, a social security number is public information, but in America it is different—so you have to adapt.”
Bad KYC costs companies, too, with every additional step in the KYC process increasing the chance of someone not finishing it—meaning companies could lose out on signups.
3.Smart contract wallets
Despite improvements in their UX, crypto wallets remain a significant hurdle for new users to overcome. At their core, they are a set of keys, protected by a seed phrase. However, having a single point of failure for wallets that can hold multiple types of digital assets has proved tempting for hackers.
Stories of wallets featuring bugs and back doors that allow determined hackers to empty them have become commonplace. It also creates problems when it comes to account recovery; in the event that you lose your seed phrase, your wallet, and the funds within are gone forever. That’s where smart contract wallets come in.
This new type of wallet, aptly named ERC-4337 account abstraction after it went live on the Ethereum mainnet in March 2023, is designed to make wallets easier to use.
With smart contract wallets, it’s code instead of a private key at the controls. This makes it possible to create wallets that are programmable, meaning you can add extra features that make the crypto wallet feel more akin to a bank account, such as password recovery, transfer limits, and account freezing. These enhancements make a wallet a richer, and ultimately more usable space to store and hold assets.
Since it was announced, dozens of wallet providers now offer this functionality. You can find a list of those here.
4.Next-gen hardware wallets
Hardware wallets—physical devices that hold your assets offline—are changing. Historically, they’ve been somewhat unintuitive to use; fiddly controls, a challenging UX and designed very much with the power user in mind.
“The early days of crypto were dominated by engineers and developers who were fascinated by the underlying technology,” said Bengtsson. “These pioneers were not necessarily focused on user-friendliness; they were more concerned with creating a secure, decentralized, and disruption-proof system,” More recently, however, things appear to be changing.
Latterly, though, hardware wallets have become more streamlined and user-friendly, with the likes of the Ledger Stax drawing inspiration from consumer electronics devices such as Apple’s iPhone.
Building on this more intuitive design and UX, hardware wallets are evolving. Originally limited to signing transactions with a user’s private keys, they’re now becoming more akin to a key that can unlock a host of other services typically not connected to your hardware wallet.
Projects like Arculus offer access to NFT marketplaces and DeFi via an API that connects to your phone. Your cold wallet can be controlled via your smartphone, so there’s no longer a need to physically connect the device using third party apps.
Keepser, another cold wallet, uses a similar technique. Instead of an app, it has a browser extension compatible with all Chromium and Firefox based browsers that allows the holder to interact with exchanges.
Ledger, one of the largest hardware wallet manufacturers, has embedded additional functionality, including staking, swapping and send features, inside its own Ledger Live interface.
5.Gasless transactions
One of crypto’s early promises was that it could be used to buy goods and services. However, crypto’s volatility, and the processing fees attached to transactions, meant the price of a good could vary wildly.
Just this year, frenzied trading of meme coins propelled Ethereum gas fees above $15.82 for a single transaction. And that’s relatively small compared to 2021, when the then proof-of-work blockchain saw mean transaction fees in the $50-70 range.
As well as making the cost of transactions vary wildly, gas fees are also a common blocker for new users who have to buy tokens before they can start using their wallets. But gasless transactions, also known as meta-transactions, hope to solve that.
First introduced on Ethereum, but now rolling out across other chains, meta-transactions are transactions where the gas fee is paid for by a third party instead of the transaction sender. This means the dapp owner covers the gas costs of their users’ transactions, providing a more seamless user experience, allowing users to start using their wallets straight away.
“UX is not merely a nice-to-have in the emergent world of Web3; it’s an absolute necessity. As blockchain and decentralized technologies break into the mainstream, the race is on to capture not just early adopters familiar with the tech, but also the massive audience who are new to this space. For Web3 to realize its full potential, it has to be as intuitive, if not more so, than the existing Web2 platforms,” said Bengtsson.
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Source: https://decrypt.co/200689/5-key-technologies-streamlining-the-crypto-user-experience
