As companies launch digital products in the web3 space, product owners need to ask themselves if the UX lessons learned in web2 still apply to the next generation of the web. The move to decentralization opens up unimaginable possibilities. Concurrently, it also creates a new set of challenges that product teams and their users need to overcome. In this article, we’ll cover some of the most critical adoption issues that product teams need to solve in order for their products to flourish in web3. We’ll also look ahead to how they can support mass adoption of web3.

What is web3?

Web3 introduces a completely new paradigm for how the internet can work. It replaces centralized data control with decentralized self custody. It shifts technology ownership from big tech companies to individuals. It breaks down barriers of entry into financial markets for regions of the world that have been unbanked. 

Web3 is the migration of resources away from centralized companies that currently control a large portion of the internet’s infrastructure and data and reallocating these elements to decentralized networks and organizations. To date, the most prominent implementation of these principles has been in the blockchain space. Although many use cases are emerging, cryptocurrencies are the most noteworthy. Another popular entry point into web3 for new users is the arena of digital property rights, often implemented using NFTs.

In conjunction with the breadth of possible interactions and the global scope of counterparties available, web3 will cryptographically connect data from individuals, corporations, and machines. This will lead to the rise of fundamentally new markets and associated business models. For a more in-depth overview of web3, you can read our article “Web 3.0 is here. Don’t Let Your Digital Product Fall behind.”

Why is web3 adoption challenging for users?

The now ubiquitous web took three generations to be natively adopted into our lives. Gen X were the first to have broad exposure to internet technology. They were the driving force behind the dot com boom of the late 90s. Gen Y (Millennials) were born into a world without the web but grew up witnessing the maturation of the internet. Gen Z is the first generation that has never experienced a world without the internet as we recognize it today. Facebook is older than many of them. They learned to date almost exclusively through dating apps. Their smartphones are virtually glued to their hands.

But with web3, instead of allowing the technology to slowly evolve over several generations, we are speedrunning history and experiencing a transformational change in a mere few years. Again, the most prominent and popular application of web3 paradigms has been blockchain technology. First pioneered through the Bitcoin network, it was later iterated upon by other projects. The first smart contract blockchain, Ethereum launched in 2015, yet virtually the entire world’s population already has access to this technology. How do we help support such a rapid shift of users to a fundamentally new technology?

How to educate new users in web3

Unlike previous iterations of the internet that evolved and gained mass adoption over decades, web3 has unleashed incredible and unprecedented possibilities in a comparatively brief amount of time. Blockchains were initially adopted by technology-savvy individuals who were able to study and understand the underlying fundamentals of blockchain technology. But with the rising popularity of cryptocurrencies and NFTs, a wide swath of individuals with a varying degree of technological sophistication has entered the space. With educational opportunities traditionally focused on early adopters who tend to be more technologically savvy, this new population is exposed to user errors, technology limitations, and scams.

To help new users learn the basics of web3, it’s important to provide hands-on experience as an effective way to teach them the practical aspects. This can be done through interactive tutorials, videos, and even virtual environments where users can practice using web3 technologies. 

Other important topics to cover include wallet and key management, best practices for secure transactions, and the effects of network congestion. A good example of beginner-friendly education is the “Learn” section provided by Argent. By providing resource to help new users understand the fundamentals of web3, you can ensure they will be able to use the technology effectively and securely.

Web3 also introduces an entirely new lingo. Certain applications, especially decentralized finance applications, use terms such as “liquidity pools,” “mining,” “tokens,” “protocols,” and more. If users are not familiar with the world of blockchain they might as well be reading hieroglyphics. Utilizing technical verbiage may alienate users from understanding the value of your application, but glossaries and assistance icons can be effective tools to assist them. Understandably, different languages may be required for applications that target various audiences. However, for the majority of web3 applications, language should be accessible to the general public.

Eventually web3 technology will have matured enough that many of the technological features can be hidden from the user experience. But, until then, education remains a fundamental principle to keep users safe.

Transparency is key when processing transactions

One of the most important aspects of a great web3 user experience is transparency. Transparency is key to creating trust between users and the platform they’re using. When users know exactly what is happening on the platform, they can make more informed decisions and feel more secure in the knowledge that their transactions are safe and their assets are protected. 

Transparency also plays a role in making the user experience more efficient. When users can see the process of their transaction from start to finish, they can more easily troubleshoot any errors or issues. This can drastically reduce the amount of time and money spent on customer service. 

Finally, transparency helps to create a more enjoyable user experience. When users can see the progress of their transaction and the steps taken to complete it, they become more engaged with the platform. This is particularly important considering delays in blockchain transactions. Well thought out user experiences can convert something that is traditionally a pain point into a trust building opportunity between the user and the application.

UX considerations of self custody vs. centralized custody

User experience is a key consideration when it comes to self custody versus centralized custody in web3. Self custody requires users to be responsible for their private keys, while centralized custody shifts the responsibility to a third party (such as an exchange). 

From a UX perspective, self custody is often seen as more secure and private, as users are in control of their own keys. However, this comes at a cost. Self custody can be complicated and cumbersome for users, as they must manage their own accounts and adhere to security best practices. This can be a significant obstacle for users, particularly new users. Innovation in the wallet space is helping ease this pain point, with wallet products such as Rainbow and Argent investing heavily into user experience.

Conversely, centralized custody can be much simpler and more user friendly. Users can have their accounts created and managed on their behalf. However, it comes with the risk of the third party having access to user funds, which can lead to security issues. Users may also be subject to the service provider’s data policies, which could include sharing their data with third parties. Centralization of user data and assets also is against the ethos of web3, which favors decentralization over centralization.

As a UX designer, it’s important to consider both options carefully and weigh the pros and cons of each. Depending on the project, one option may be better than the other, so it’s important to consider the user’s needs and preferences.

Impact of transaction speeds on the user experience

One of the unique aspects of web3 decentralization is that transactions on a blockchain network need to be validated and recorded across the entire network. This can take from a few seconds to several minutes, or longer depending on network load. Speed variability has a substantive impact on the user experience of web3 applications. Transaction speeds affect the amount of time it takes for users to access the application, the amount of data that can be stored in a single transaction, and the overall responsiveness of the application. Slower transaction speeds can lead to longer wait times, slower loading times, and a less satisfying user experience. In order to ensure that users’ expectations are managed correctly through appropriate UI feedback, UX designers must consider the transaction speeds of their target blockchain when designing web3 applications. 

Additionally, network congestion can also negatively impact the user experience. When too many transactions are attempting to process at once, it can lead to delays in processing times or failed transactions. Clearly, this adversely affects the user experience. Debugging a failed transaction can require a technical skill set. It becomes incumbent on the application’s user experience to manage transaction failures gracefully and assist the users in the completion of their transaction. 

The Biggest UX Challenges in web3

Web3 has the potential to change the way we interact with technology. From managing our personal data to participating in financial markets, this new paradigm brings an array of benefits to users. But mass adoption will require careful consideration of who can use the technology and how it is used. While users are gaining more confidence and becoming more familiar with the technology, there are still some bumps in the road for web3 adoption. For web3 to reach its full potential, UX designers, front-end developers, and product managers alike will need to think carefully about how to best make web3 user friendly and secure.