Wallet Abstraction
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Web3 has started a global revolution, but since the technology is still in its nascent stages, there are currently many challenges facing Web3, especially in the area of user experience. We will discuss a few of those here.
User experience is the overall experience of a person using a product such as a website or computer application, especially in terms of how easy or pleasing it is to use.
Wallet creation in web3 is very different as compared to creating a profile on web2. The user needs to install new wallets, face clunky UIs, and then be asked to store seed phrases securely otherwise they will lose access to not only their wallet but also any funds (cryptocurrency) that they hold in that wallet.
Complicated onboarding process is the leading cause of churning users on web3
More often than not, this scares away the users, especially those from non-tech backgrounds. An alternative way to create wallets is on an exchange, but that opposes the ethos of web3 where users are in full control and gives exchanges the access to meddle with user funds.
Not your keys, not your crypto
A balance between easy onboarding and true ownership of users is the key to creating a better user experience.
If the user loses the seed phrase, it is impossible to recover the wallet unless the user sets up some form of wallet recovery mechanism. Setting up a recovery mechanism also involves complicated setups like multi-sig, storing in software like KeePass, or getting a hardware wallet and setting up with a pin. Again, an easier wallet recovery option (that does not delegate the ownership of the wallet to someone else) is required for a balance between user experience and true wallet ownership.
Lost seed phrases have resulted in the loss of 20% of bitcoin in circulation – .
Creating wallets through Multi-Party Compute is one way of creating self-custodial wallets with easy login workflows.
Downloading a new wallet is also a friction point for many users. This is one reason why there is a huge focus on embedded wallets now.