Dapps, or Decentralized Applications, offer a new frontier through the digital transformation of financial access, gameplay, communication, and payment rails. Instead of sending tokens from one wallet to another, users can interact with smart contracts directly and utilize the simply power of the technology to unlock self-sovereignty through a new layer of accessibility online. The difference between these and traditional online applications is that dapps operate on the blockchain rather than a centralized server, eliminating the single entity that can restrict your access or funds. Blockchain-based applications are the future of the global community, but to use them new users requires a massive understanding to know how they work. In this article, we’ll explore each step to operate on-chain and how to use them…
The following may seem satirical with each arduous task required to just play a game, but I promise, this is exactly what’s needed to operate on-chain today:
Step One: Learn about Web3
There is no shortage of buzz surrounding crypto in the market; token price volatility is covered in each segment of financial news, NFTs seem to be all the craze across social media, and the mystery surrounding who or what Satoshi Nakamoto is still looming. But these are just the tip of the iceberg; The depth of blockchain applications goes beyond the lore, profile pictures, or market speculation, which is likely why usage has stagnated under one million monthly active wallets worldwide. The point is either web3 has difficulty marketing to the rest of the five billion internet users, or the unique perks haven’t been manifested in front ends that are attractive to new users. How is web3 supposed to onboard the next billion users if they aren’t hearing about the innovative strides the industry is making? Platforms like DappRadar and Dapp provide tremendous avenues to scroll through the top platforms built on-chain.
Step Two: Create a Wallet
The first thing every new user will be prompted to do once they find the dapp that peaks their interest is “Connect Wallet.” This process is initiated through generating private keys that are exposed through a mnemonic phrase that the user is prompted to store in a secure location, preferably offline, to avoid digital compromise. A new wallet needs to be created, particular to each unique network that a user needs to operate on, a MetaMask for Ethereum, Phantom for Solana, and a Keplr for Cosmos. Some non-custodial wallets, like Magic or Web3Auth, have entered the limelight to abstract away some of the complexities around wallet creation, particularly storing your own seed phrase. This has been a big step for new user onboarding benefits by allowing wallet generation with traditional social or email login, but the conclusion with the creation of the wallet. Take a look at our last article, “The Way of the Wallet,” to dig more into the architecture of each type of on-chain wallet.
Step Three: On-Ramp Crypto
The next step in using a dapp is to purchase the native token of the blockchain. There are two primary methods to adding crypto to a user’s wallet: an on-ramp provider like Kado, Wyre, or MoonPay, or purchasing and transferring from a centralized exchange. An on-ramp provider allows users to acquire the necessary token within the wallet. Once the “Buy Crypto” button is pressed, a widget pops up, prompting the user to enter their credit card information or connect to their bank account through Plaid and then wait for the transaction to process. Next would be to create a centralized exchange account, work through the KYC process, buy the required asset, then initiate a withdrawal by copying and pasting their wallet address into the end destination.
Step Four: Connect to a DEX and Swap
So now let’s say the user has $ATOM sitting in their Keplr Wallet. What if they go to the Stargaze platform and need native $STARS to buy an NFT? A user would have to go to a protocol, or decentralized exchange, like Osmosis, to swap their $ATOM for $STARS, and withdraw it properly through the IBC to Stargaze. Some wallets have used DEX APIs to offer the swapping feature from within their wallet interface, which is much more convenient for active users, but there are also added fees that most users are unaware of. For crypto native users, this is pretty straightforward, but for non-crypto natives, they’re likely asking why this is necessary at all, leading them to drop web3 altogether.
Step Five: Buy NFT/Stake/Interact with Smart Contracts
Now the native token is acquired, the wallet supports the network-specific address, and the user is reconnected to the first and only dapp they want to interact with. After the previous steps, the user’s first click results in another task, signing the message or transaction from within the wallet. Reasonably nominal to the average web3 user, but when it comes to creating a comfortable environment that the user feels confident in, prompting them to initiate or sign a transaction even when there’s no value associated with their instance may insight some hesitancy and drop off for the user.
Step Six: Don’t Get Hacked or Scammed
In web2, users only sign into their bank accounts through Plaid in two, maybe three, instances; Robinhood, Venmo, and possibly Mint. It seems odd that users need to “log in” to each website they enter, with an account tied to all of their assets — and to those who are about to argue that you’re supposed to use burner accounts unless you’re going to transact, just read that. Each week there’s some kind of compromise as the industry is still working to work out the kinks of this new technology; However, for the average Joe or Jane expending the time and resources to manage their own security is not conducive to retention or adding enough value to rationalize the risk.
Well, with that roller coaster of a UX past us, let’s take a quick second to explore the options coming soon:
Peaze: Step One
Sign in with an email or social login, operate freely on-chain, and only add your traditional payment method when you purchase something, just like users are used to.
Soon…
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