There's approximately 560 million crypto users. At least 500 million use the stablecoin, USDT.
Where the numbers gets disappointing is when we look at DeFi protocol users. There's reportedly 14.2 million decentralized finance users.
This is approximately 2.55% of all crypto users.
This is a problem.
On any other day, you'd likely find me arguing that decentralized finance is more than what we generally consider DeFi.
For instance, if you use Bitcoin, through non-custodial wallets, even just making simple transfers to other addresses, you're using DeFi because the Bitcoin network is a decentralized technology and its native asset is effectively a decentralized asset, so DeFi is what goes on there.
But that's not a relevant argument today because beyond regular peer-to-peer transactions are things that needs to mature into mass adoption.
These "other things" mostly exist when you're dealing with what we generally call "DeFi protocols or projects."
Savings, Lending, Trading, etc.
The decentralized layer for all of these products are lacking significant adoption, even within the crypto economy and one of the major reasons for this is UX-central.
Solving complexity in DeFi
DeFi is growing, no doubt, we have the volume data to make a case for this, but let's not kid ourselves, we still have a UX problem that needs fixing if adoption and sustenance is expected.
UX, which is short for "user experience" is a competitive weapon in any market. You can have the best product but still lose to a lesser brand simply because they have a better UX.
We can look at traditional banking and see the data defend this argument. As much as 73% of users would switch banks for a better user experience, report shows. If this already happens amongst companies within the market DeFi aims to replace, what makes the ecosystem believe they can compete without abstracting away complexity?
At least it isn't intentional
It's easy to cut projects within the DeFi ecosystem some slacks because the UX problem that faces the market isn't a result of intentional incompetence but something excusable, at least for now.
The UX gap in DeFi is mostly not a design problem, but a limitation resulting from the underlying tech that powers the market.
Complicated processes for setting up wallets, executing transactions, and understanding smart contracts, are, to name a few, the blockchain tech problems impacting the UX of DeFi applications.
Users need to understand key management when they are usually used to giving up most of security responsibilities. There's also the gas payments problems, where they need to figure out fees during each transaction, that unpredictability is a weakness and there's also the general demand to acquire new knowledge to use products across DeFi markets, effectively.
That sounds like hell to the average consumer that's used to the opposite.
So the question persists, will DeFi complexity abstraction to effectively compete?
Looking at the problems, anyone can tell what needs to be done.
Key management needs to feel like setting up biometric security in sign up flows. Fees need to become predictable because despite generally being cheaper than traditional finance, not being fixed is terrible UX. And when it comes to the problem of acquiring new knowledge, well that's just a problem that needs design expertise to solve because we cannot skip educating the public.
Projects just need to learn how to embed this phase into users onboarding and usage journey, in a way that nobody feels like they're being put through processes of learning new things.
Solving keys management and fees, generally gets us much closer to truly competing.
Do I think we'll get there?
Yes I do. It's inevitable because the larger the general crypto market grows, the more opportunities open up for DeFi and solving UX will be a priority to capitalize on this growth.