"Mass Adoption" has become the most frequently mentioned phrase during the 2049 period, and unlike the previous context of "beautiful vision," this round of the market has once again mentioned this word with a sense of urgency.
By: Wu Tianyi, DeThings
It's another year for Singapore Token2049, and the Merlion's appearance remains the same every year. However, unlike previous grand events, this year, amidst the industry's bleak background, "Mass Adoption" has become the most frequently mentioned phrase during the 2049 period, and unlike the previous context of "beautiful vision," this round of the market has once again mentioned this word with a sense of urgency—only "To C" can save the market.
The market environment is becoming increasingly severe. The performance of the previous cycle was unsatisfactory, LPs are more cautious about risks, and VCs are stricter in choosing entrepreneurs, leading to further difficulty in fundraising. At the same time, the listing conditions of exchanges are continuously tightening, industry confidence is shaken, and project valuations are generally declining. In addition, the user activity of Web3 projects has significantly decreased, airdrop strategies have been ineffective, and it is difficult to effectively retain users.
Against this backdrop, project parties are gradually returning to real-world applications. And if real-world applications are to reach users, they must break through the "last mile"—both online and offline. This not only requires efforts in terms of deposits and withdrawals, and payments, but also truly reaching offline stores, covering the consumption scenarios of ordinary users.
The market is forcing project parties to return to practical applications
During the conference, the Tada taxi robot on Telegram can be said to be the Web3 application closest to "Mass Adoption" and covering real-world scenarios. The reason for using it is quite simple: new users have a free quota of 60 SGD and a subsequent 50% discount. To use this bot, one needs to connect a crypto wallet and make payments using USDT or TON.
For a "crypto person," this is simple. But for other users, they need to register a crypto wallet, exchange fiat currency for cryptocurrency, and then connect the crypto wallet to the application. Compared to other ride-hailing apps that only require linking a credit card, how many users are willing to "enter" the crypto world when there are no discounts?
In 2023, with 617 million global cryptocurrency holders, it is not just growth, but also a kind of saturation. The industry is facing a threshold similar to Tada, how to bring people who have never been in contact with the crypto industry into it is the key to Mass Adoption.
However, during the 2049 period, we can see the invasion of Internet thinking into Web3, which is a manifestation of valuing users. "Every time a user opens an interface, their desire to consume decreases by 20-30%," a founder of a payment project told me in an interview. Another founder of the Depin project also said, "Users don't care about whether it's Web 2 or Web 3, we need to first create a user-friendly product." This is a consensus in the Internet industry, but there have been few similar voices in the Web3 field before.
Financial actions are no longer sufficient for this round of the market, as Ethereum founder Vitalik sheds the almost religious idolatry halo, replaced by the downturn of Ethereum and the DeFi field. The path of attracting funding through whitepapers and PPTs is no longer viable, and the industry urgently needs to return to practical applications.
Furthermore, "Mass Adoption" not only requires breaking through the "last mile" for users to enter Web3, but also places higher demands on infrastructure construction. Therefore, races such as Depin, RWA, stablecoins, and payments are experiencing concentrated outbreaks. At the same time, the savings, payments, lending, and investment represented by these fields cannot be limited to isolated systems, but must be closely integrated.
Response from industry giants
Combining practical applications and user thinking, more and more industry giants have responded. One of the hot topics at this conference, "PayFi" proposed by Lily, the president of the Solana Foundation, is a good example, and similar to this is the "consumer application" mentioned in Vitalik's speech. The core of PayFi revolves around the process of sending, receiving, and settling cryptocurrencies, rather than trading activities. It emphasizes the "time value of money," which means that due to opportunity costs, interest rates, and other factors, money at present is more valuable than money of equal value received in the future.
What PayFi aims to do is to help users maximize the time value of money. For example, "Buy Now Pay Never" uses the time value of money for payment, and creators' monetization and accounts receivable are obtained by paying the time value of money at present.
This model truly breaks away from the speculative-driven adoption of cryptocurrencies. It not only covers the payment and trading of cryptocurrencies, but also includes various financial activities such as lending, wealth management, and cross-border payments. Through decentralized technology, PayFi makes financial activities more efficient, secure, and reduces the friction and costs in traditional financial systems, thereby promoting seamless value transfer and financial inclusion on a global scale.
This concept places higher demands on current blockchain technology. With the surge in transaction volume, the Solana network may experience congestion, leading to a decrease in transaction speed. Secondly, Solana has only achieved 1.6% of its theoretical maximum speed of 65,000 TPS. In addition, from January 2022 to February 2023, Solana experienced interruptions in 7 out of 13 months, with the longest interruption lasting over 24 hours. In February of this year, Solana also experienced an interruption. If this were a large bank or multinational payment network in the Web2 field, this would be unacceptable.
Moreover, to achieve PayFi or "consumer applications," online consumption alone is far from enough. It also requires breaking through the physical "last mile." Taking Visa, Alipay, and other Web2 institutions as examples, the scenario for achieving mass adoption is that users can conveniently make payments at offline stores using Visa's POS machines or Alipay's QR codes. Only when crypto applications reach offline scenarios can mass adoption become possible.
Furthermore, to truly realize the meaning of Web3, the "next generation of the Internet," it is not enough to just use dApps or crypto credit cards for convenient payments online and offline. Instead, it is about users storing their cryptocurrencies on the chain while consuming, enabling frictionless circulation, generating income through lending projects, significantly reducing deposits and withdrawals, and retaining the advantages of cryptocurrencies such as resistance to centralization and immutability. At this point, cryptocurrencies may truly demonstrate attractiveness beyond fiat currencies, and Web3 may truly become the "future."
When Bitcoin reaches $100,000, will our lives be better?
Looking back at the birth of cryptocurrencies, the original vision of Bitcoin was to create a peer-to-peer electronic payment system while resisting centralized finance. However, times have changed, and Bitcoin has become a value storage system. The approval of Bitcoin ETFs has further strengthened Bitcoin's financial attributes. If meme coins are speculative for retail investors in a market downturn, then Bitcoin ETFs have become speculative for institutions.
However, consider 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 move away from the revelry of a few speculators and enter the real world. The good news is that this trend is gradually emerging, even if it takes ten years, twenty years, or even until 2049.
At a Solana hackathon, a project founder shared this view, "The role of Web3 is to improve production relations, not to increase productivity. In fact, Web3 will to some extent reduce productivity." This means that for Web3 to achieve mass adoption and attract a portion of the remaining 6 billion people in the world, it not only needs to follow the path Web2 has taken, but also needs to make more changes.
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