a16z: Trends in the Crypto Industry 2024 "Seamless User Experience"

Author: Black Mario

Recently, the well-known crypto investment firm a16z released "Big Ideas 2024," listing several trending "big ideas" in the crypto industry for 2024, among which Seamless UX is prominently featured.

From the most intuitive understanding, Seamless UX emphasizes that users feel smooth and uninterrupted when using a product or service, without bothersome obstacles or incoherent experiences. This typically includes intuitive interface design, efficient operational processes, and sensitivity to user needs, ensuring that users feel comfortable and pleased throughout the interaction.

Clearly, the crypto industry has not adequately considered user transaction experiences in its exploration of interoperability. As the industry places more emphasis on "Seamless UX," it will have a profound impact on the development of the crypto sector.

Early Exploration of Interoperability

The development of multi-chain has become a long-term trend in the on-chain world, from the early explosion of Layer 1 tracks to the growth of Layer 2 tracks based on Ethereum, resulting in the formation of hundreds of ecosystems in the on-chain world. Even so, the trend of multi-chain development is accelerating; for instance, from the beginning of 2023 to now, several Layer 2 networks, including Mantle Network (alpha), Base, Linea, StarkNet, Scroll, and Eclipse, have successively launched their mainnets. With technological iterations, the trend of multi-chain is becoming an important force driving a new round of growth in the crypto industry. However, a new problem arises: under the trend of multi-chain, it is difficult to establish reasonable interoperability between chains.

A paper by Binance Research titled "Decoding Cross-Chain Interoperability" pointed out that different chains have diverse choices in terms of codebases, frameworks, and designs, meaning that almost every two chains are heterogeneous, exacerbating the fragmentation and disconnection in the on-chain world.

As a result, developers face challenges with non-unified tooling, while users have to deal with the limitations of decentralized applications on specific chains, leading to fragmented liquidity and less than ideal UI/UX (User Interface / User Experience) in the on-chain world. Therefore, both developers and users have a need to connect these chains, making how to establish reasonable cross-chain interoperability an important topic of discussion in the crypto industry.

Initially, cross-chain bridges aimed at cross-asset purposes were widely adopted interoperability solutions. These solutions typically achieve cross-chain interactions by locking assets and minting new assets on specific chains (initially, TVL was usually the main metric). They focus more on a specific direction, such as asset-specific, chain-specific, or application-specific.

However, data from Binance Research shows that the TVL of cross-chain protocols experienced rapid growth in 2021, followed by a sharp decline in 2022 due to the bear market and frequent security incidents. This indicates that when cross-chain interactions are inactive, the risks are lower, but as cross-chain interactions increase, the risks also escalate; the security of cross-chain operations is inversely proportional to their scale, reflecting that cross-chain solutions are often built on the premise of sacrificing security. Early explorations of interoperability triggered a series of security incidents, leading to controversy and causing many to lose confidence.

It is evident that cross-chain bridges play a crucial role in the industry's development, but they are merely a stopgap and certainly not the final state of cross-chain solutions.

On the other hand, under the multi-chain trend, the distribution of on-chain resources is extremely uneven. We see that leading ecosystems like Ethereum, Tron, and BNB Chain control over 75% of the on-chain TVL. Many emerging ecosystems, lacking good interoperability solutions, find themselves at a competitive disadvantage in the ongoing battle for traffic, making the initiation and long-term development of these ecosystems challenging. A clear example is that some users are interested in airdrops from emerging Layer 2s, but the interaction involves extremely high costs and barriers.

Therefore, under the trend of multi-chain, connecting different networks is crucial for the mainstream adoption of blockchain and value capture. Finding the right balance in cross-chain interoperability and enhancing user transaction experiences has also become an early topic in the industry.

Underlying Stack

After the early explorations of cross-chain interoperability, the field has welcomed new advancements. Chainlink, LayerZero, Axelar, and others have constructed a new approach to cross-chain interoperability. By building a distributed underlying stack, developers can directly create secondary applications with cross-chain interoperability features based on these platforms, focusing on generality, scalability, and trustlessness.

Through these stacks, developers can more easily gain cross-chain interoperability capabilities, helping to achieve better connections between different chains and applications, thereby allowing end-users to smoothly enter various ecosystems while ensuring security. The underlying stacks primarily target B-end users, i.e., developers, who typically need to relay and connect with C-end users through the application layer, but users still face high barriers and complex operations.

Thus, in addition to building reasonable cross-chain interoperability, there is also a need for qualitative improvements in UI/UX to fully leverage network effects to help different on-chain ecosystems grow. However, at this stage, these cross-chain interoperability underlying stacks find it difficult to have a direct effect in the direction of "Seamless UX," as this usually requires a foundation built on developers' understanding.

Positioned as a "Web3 operating protocol," dappOS has constructed a "transaction intent" framework that achieves reasonable interoperability while excelling in UI/UX, becoming a model ecosystem in the direction of Seamless UX. Based on this, dappOS is also becoming a paradigm ecosystem that fully utilizes network effects to connect different on-chain traffic.

Seamless UX Example dappOS: A New Traffic Distribution Endpoint

dappOS is establishing cross-chain interoperability in a more "intelligent" manner. It has built a "transaction intent" framework, which includes a unified account and the dappOS Network.

The dappOS unified account abstracts chains, allowing users to not worry about which chain their assets are distributed on or manually switch networks. With a single signature, users can seamlessly interact with various Dapps (executed by the dappOS Network), automating complex operations and combining them into seamless processes.

The dappOS Network is a distributed execution network composed of distributed nodes, responsible for executing some of the user's transaction demand instructions, such as cross-chain transactions, Gas fee payments, and even some more complex transaction actions. This network is helping dappOS bridge the gap between chains to achieve chain abstraction.

Based on account abstraction and chain abstraction features, the dappOS system acts as a connector linking different chain ecosystems, helping all integrated systems achieve low-barrier interconnection through the distributed dappOS Network, while also possessing more complete cross-chain interoperability capabilities, allowing cross-chain transactions to be conducted directly at the application layer.

In the new v2 version of dappOS, it supports traders to combine transaction functions of different chain Dapps through a unified account. For example, after borrowing on Benqi on the Avalanche chain, users can seamlessly use the borrowed funds on Perpetual or QuickSwap and can repay the borrowed funds from Benqi on any chain.

This user-intent-centric framework design is changing users' on-chain trading habits.

With dappOS, users only need to store funds in a unified account, and through this account, they can achieve their intents with a single click, similar to using traditional apps, without needing to actively execute cumbersome on-chain transaction steps, significantly reducing on-chain interaction costs and enhancing convenience. This also makes dappOS an excellent on-chain trading and interaction tool, allowing users to seamlessly connect with application and public chain hotspots, while the ecosystem boasts high retention rates and user stickiness.

dappOS has not only achieved significant improvements in UI/UX but also effectively retains users within its UI/UX, making it a new on-chain traffic pool.

To better guide the ecosystem traffic system and leverage network effects, dappOS v2 recently launched a new reward system, providing airdrop incentives to targeted users through collaborations with some applications. Through this targeted guidance, dappOS is rapidly injecting traffic into new public chains and application ecosystems, achieving efficient ecosystem growth.

Since the launch of dappOS v2 in September this year, several use cases, including Perpetual, Benqi, QuickSwap, and Stader, have been integrated and have experienced significant growth through dappOS's traffic distribution system.

After the launch of dappOS v2 in October this year, Perpetual Protocol initiated its first airdrop activity through the dappOS reward system, distributing the first batch of airdrop rewards to users interacting with Perpetual Protocol through the unified account. The traffic pool of the dappOS ecosystem has also brought tangible growth to Perpetual Protocol.

In addition to Perpetual Protocol, dappOS supports users to seamlessly interact with Manta Network dApps from Ethereum, Arbitrum, Avalanche, etc., without manual cross-chain operations, resulting in an overall fee reduction of 85%.

Simultaneously, interactions will also be cumulatively counted in the dappOS v2 reward system, with expectations of receiving multiple airdrops.

As of December 12, according to data released by dappOS, after integrating with dappOS for two months, BENQI has gained 4,848 new users and completed 28,571 transactions. New dappOS users have deposited a total of $12,877,782, with USDT and USDC deposits accounting for 18.17% and 16.62% of the total in the BENQI protocol, respectively. New dappOS users have borrowed a total of $7,199,765, with WBTC and WETH accounting for 80.57% and 45.75% of the total in the BENQI protocol, respectively. This also indicates that dappOS, as a traffic distribution endpoint, has brought significant benefits to the development of the Benqi protocol.

Staking and lending examples:

https://staking.benqi.dappos.com/liquidStaking

https://benqi.dappos.com/Markets

The exploration of interoperability is shifting from early efforts to promote interconnection among different chains, ecosystems, and applications towards achieving better UI/UX. This will also be one of the narratives in the crypto industry for a long time to come. As an early explorer in the narrative direction of "Seamless UX," dappOS is becoming a major traffic distribution endpoint in the on-chain world, helping new public chains and application ecosystems capture user traffic and achieve efficient growth while providing a reference for the evolution of on-chain application forms.