In the last few years, web3.0 has gained significant adoption, most of which has been on Ethereum. A wide variety of new protocols & use cases have emerged; decentralized exchanges like Uniswap, lending and borrowing protocols like Aave, and NFT plays like Opensea. We have a plethora of new cryptocurrencies in the form of ERC20 tokens, and ERC721 tokens which later got popular as NFTs.
However, with all this DeFi & NFT adoption the Ethereum blockchain has become extremely congested. The activity is much higher than the chain can efficiently process and as a result, we observed absurdly high gas fees. This lead to the introduction of Ethereum scaling solutions usually referred to as Layer 2 solutions, side-chains, rollups, etc. The main idea behind Ethereum scaling solutions is to make the transaction computations faster and cheaper. This is done by committing proofs of multiple transactions in a batch on the Ethereum blockchain which can be verified and proven on-chain. We have also seen the proliferation of other Layer 1 chains that achieve higher throughput at lower costs for dApps and their end-users.
As more and more dApps move to chains beyond Ethereum, the multi-chain reality of web3.0 is becoming clearer. This forces multi-chain dApp users to navigate across numerous chains. Thus, we are now seeing a ton of bridge solutions that help move funds between various chains. The current multi-chain web3.0 has various Layer 1s, Ethereum scaling solutions, their native tokens, a long list of cross-chain bridges, and dApps spread across all these ecosystems.
These developments have introduced new issues and intensified some existing problems for the future of web3.0.
Every interaction with a dApp is a blockchain transaction, and blockchain transactions still require significant user knowledge. Users need to be proficient in crypto wallets, understand gas, and how to properly estimate it so you don't overpay or underpay. They need to actively manage each blockchain interaction. Even then, they face failed transactions and long waiting times for transaction completion. High gas prices have become a major hurdle for most web3.0 users.
Layer 2s & scaling solutions such as Polygon, as well as EVM compatible L1s like Binance Smart Chain (BSC) and Avalanche C-Chain have provided some respite. But they come with their own UX issues. While each application deployed on multiple chains is reaping the benefits of the underlying blockchain, it becomes very difficult for a user to interact with the application across different blockchains.