2020 — the year of proving blockchain is real and backing that up with real use cases to solve real problems. And what have we learned matters the most in doing business? It is TRUST. How do we help build and scale the trillion-dollar industry to create value and opportunities for the future?
Blockchain technology can help bring light to places where transparency is needed, where the trust needs to be rebuilt. If trust is the bedrock
on which humans develop relationships, drive innovation, and create opportunities for many, then blockchain technology is clearly one platform that can be integrated to realize the opportunity for business to act as the trusted enabler.
Blockchain platform not only allows exchange value between peers seamlessly but removes intermediaries in the process. This was made possible by smart contracts enabled blockchain protocols. Ethereum, the first blockchain platform that supports scripting languages that allow for more advanced smart contracts between untrusted parties. Smart contracts are lines of code that are stored on a blockchain and automatically execute when predetermined terms and conditions are met. At the most basic level, they are programs that run as they've been set up to run by the people who developed them.
This enabled endless opportunities for developers, popularly known as decentralized applications (DApps). DApps have their backend code running on a decentralized peer-to-peer network, as opposed to typical applications where the backend code is running on centralized servers. A DApp can have frontend code and user interfaces written in any language that can make calls to its backend.
The daily active unique wallets across the Ethereum dApp ecosystem rose 118%, Source: dApp radar.
Ironically, today there are approximately 50 Million+ users using blockchain-based wallets, Source: Statista. Most of these wallets are for the store of value or inactive for a long time. Very few users (proportionally) have experienced dApps. As of this writing, more than 5000 dApps exist, of which less than 1000 are active. Source: dapp.review.
Undoubtedly, blockchain is still on the look-out for its mass adoption, a perfect use-case that can set its path to becoming a usable technology adopted by wide users and developers. Many would argue at this point that decentralized applications have taken a step back due to scalability issues, however, the speed of a platform isn’t relevant, unless the platform has sufficient adoption to require that throughput.
Let’s look into the case of DeFi DApps. It may seem that DeFi has picked mainstream adoption, however, a survey by ARPA in July 2020 found that only 1% of 5 million crypto traders have used decentralized finance protocols. One of the reasons is the complexity to use applications and poor user experience.
What we are really missing is ‘End-user usability’.
If users don’t understand your app, they won’t use it. The following points explain users' or developers' hurdles to using blockchain applications.
(1) Why I’m paying for it:
Internet users are surrounded by ‘freemium’ model-based applications wherein users have an option to either use limited-service for free or pay for premium features. For a service that’s new to the market, offering a ‘freemium’ version is a quick way to drive user acquisition.
In contrast, blockchain applications cost gas (transaction fee) every time users interact with the application. “Imagine playing your childhood popular video game — Mario and paying a transaction fee for each move” How does it sound? Such an app would face difficulty in acquiring users and therefore, would limit its wide adoption.
(2) Difficult to build apps:
For developers to build applications on Ethereum, they have to learn an entirely new language — ‘Solidity’. It takes a long time for developers to learn and write smart contracts. Developers can make simple mistakes that can cause huge consequences like security breaches or high transaction costs.
Some of the most well-known examples of a poorly written smart contract code are:
- Decentralized Autonomous Organization (DAO) hack — 3.6 Million Ether was stolen (Read for more details >> DAO Hack)
- Bug discovered in the smart contract used by Parity, which was exploited and resulted in the loss of 0.5 Million Ether (ETH), worth more than $280 million. (Read for more details >> Parity Bug).
Given the difficulties in building decentralized applications, developers restrict their application design to the stage of a minimal viable product.
(3) Not so easy to navigate and use:
Blockchain developers put a lot of focus on the back-end but forgot to consider front-end experience. For a potential user who never heard of cryptocurrency, exploring decentralized application might look something like this:
- Login
- Check registration process
- Learn about security key to unlock application
- Learn about wallets, Metamask, or Trust wallet
- Understand native token, buy some
- Probably search for YouTube video
- and most likely Close the window with a promise never to return.
Comparing this to a new user for a traditional website/application:
- Register (with Google, Facebook, etc and credit card details)
- Use platform
The above-described issues limit the decentralized application to reach its full potential. Therefore, a new model for blockchain protocols is needed which not only works on scalability but also provides a better blockchain development tool and simplifies the experience for end-users.
The past year brought these issues into the limelight and many companies and developers now seek to minimize this troublesome experience. One such startup, NEAR protocol, is working to introduce new thinking in the blockchain architecture and programming model. Here is how NEAR solves these challenges.
Introducing NEAR Protocol:
NEAR ? is a sharded, developer-friendly, proof-of-stake scalable-public blockchain built from the ground-up to make it easier for developers to build on and onboard users. Currently running in the main net, users experience fast transaction settlement (3-second finality) in NEAR based dApps, with gas fees 10,000x less compared to ETH-based dApps.
It lets users try out decentralized applications the same way they try all other apps — for free. Developers can prepay transactions for them so that their users don’t need to work out how to buy crypto tokens on an external exchange in order to start using the applications. Additionally, NEAR? introduces progressive security which allows users to sign up (or register) for the application using email, the same way they would sign up for other applications from Web2.
This way users get time to progressively learn about decentralized applications, allowing easy on-boarding of users to the platform. Once the users are ready to commit, they can link their account security once without a need for any browser extension like Metamask.
In NEAR ?, developers can write blockchain smart contracts using familiar languages — AssemblyScript and Rust, for starters — that compile to WebAssembly. AssemblyScript lets you write fast and tap into a vast pool of existing web developers to build your team, while Rust gives you the advantage of strong type safety and formally verified runtime to prevent costly smart contract bugs.
This makes it easier for developers as they don’t have to learn a new niche domain language. The combination of the test environment, suits, flexibility to develop smart contracts in a familiar programming language enables developers to build a feature-rich application in NEAR protocol and provide a delighted user (customer) experience.
Additionally, Developers building on the NEAR protocol can straightforwardly set a developer fee percentage that is charged in addition to transaction fees any time their smart contract is called. For e.g., monetization of one game asset use in other games. This opens up a whole range of automated royalty and licensing-based business models that were previously hugely difficult to implement on a blockchain.
Closing remarks:
With the emergence of every new computing paradigm, there is a significant amount of uncertainty over how exactly it can be most effectively utilized and what it means for the future of innovation. Blockchain is no different. NEAR protocol acknowledges the universe of possibilities and developer/ user constraints. NEAR protocol not only solves the issue of speed, gas fee but also improves the user's and developers' onboarding process, making it possible for even blockchain novices to participate.
For interested developers, the NEAR protocol includes a developer program wherein developers can leverage NEAR walkthrough tutorials to create their first dApps. Once ready, they can use NEAR protocol’s test environments to pivot their blockchain apps. Additionally, developers can connect to NEAR’s global community who will do everything possible to support you to build and enhance your application.
