SafePal CEO on Web3 Evolution: A Shift from Speculation to Utility

I believe we need to move away from an overly speculative and "anything goes" approach. Crypto and Web3 don't need to be like the Wild West. While that fast-paced, unrestricted freedom fosters innovation and research, it also makes the industry more volatile and, more importantly, less secure for users.

We've had enough time to test new ideas and break things. Now, it's time to slow down and focus on building proven, solid foundations that meet current needs—instead of pushing too far into the future and trying to predict and gamble on what the next big thing will be.

I absolutely foresee this shift, especially with the Total Value Locked (TVL) for Real-World Assets (RWAs) currently at $5.7 billion and projections for growth up to $10 trillion. Considering the trust and reliability provided by the stability, transparency, and borderlessness of crypto, there is huge room for integration and growth. We are also seeing hints of this shift in payment systems with PayPal and Visa.

Especially with the bull run in 2021 and the DeFi summer of 2020, the crypto industry expanded rapidly and hasn't had the time to develop a solid foundation yet. This isn't to say that metaverse-centric utilities aren't viable, but there is a relatively niche demand for them right now. RWAs and payment systems, on the other hand, serve a massive user base and would be more viable as the foundation for crypto adoption. Use cases of a more practical nature would also be more appealing for institutional investment and participation, which would naturally lead to more liquidity and capital being deployed.

Metaverse utilities will definitely have their time, but only after a solid foundation for crypto and Web3 has been established. The unique and more creative aspects might be what ultimately distinguishes the industry from being a simple replication of traditional FinTech on blockchain.

While regulation may not always be perfect, as overly strict or ambiguous rules can limit business operations, clear and sensible regulation makes it easier for businesses and projects to innovate and grow. It also makes the space safer for users by deterring bad actors and scammers.

Crypto projects and regulators need to see themselves as partners, not enemies. Working together will mitigate malicious attacks and could help repair the overly negative stigma associated with crypto being the "Wild West."

In the long run, this will also make the industry safer and more trustworthy, making security concerns less of a barrier for users to adopt and use crypto.

The challenging economic landscape has made VCs less eager to deploy capital and more stringent in vetting projects to make the most of their liquidity and protect their reputations.

This isn't necessarily a bad thing. Projects with empty promises of wealth generation, lacking genuine revenue streams or sustainable business models, have been getting away with exit scams, Ponzis, and rug pulls for far too long.

Users are steadily learning to be more discerning with their investment choices. They're asking questions beyond "Will this token make me rich?" and are researching whether a project has an actual product or service with viable go-to-market strategies and proper governance knowledge.

Projects and builders will need to consistently deliver value and establish a positive track record if they hope to thrive in the industry. This is also a trend I expect to see continue throughout 2024.

The first thing is usability and applicability. While that sounds straightforward, executing and achieving this is a long-term effort. It's easy to fall into a bubble and echo chamber after being in a fast-paced and complex industry like Web3 for a while, but the needs and problems faced by veteran and new users are vastly different. 

Wallets need to build useful features to meet diverse user demands while keeping the products simple and easy to use; otherwise, users will switch to competitors. This poses constant challenges for wallet builders in understanding users and product design, as it requires relentless effort to meet ever-changing user demands. 

The second is security. Web3 wallets are designed to store and protect valuable crypto assets. It takes a long time to build a solid brand reputation for a wallet by delivering secure products consistently—but it only takes one successful hack for that reputation to crumble quickly and for users to flee.

Competition among wallets is therefore complex and challenging. It takes tough core competence, user-centric innovation, adaptability, and relentless execution to successfully onboard and retain a massive user base.

I think it's vital as a brand to be neutral, open to change, and to truly understand what Web3 users need and want. While MPC and account abstraction (AA) offer compelling solutions, they have their own issues—with the former being too complex for the average user and the latter currently being limited to EVM chains.

Despite being an externally owned account (EOA) wallet provider, we research technologies like MPC and are always ready to make the transition should the need arise. It's important not to get caught up in every trend and hype cycle. We must rationally assess whether the technology or solution truly solves problems and meets user needs.

We are also actively improving the usability of our products by enhancing the UI, features, and functionality of our entire wallet product line while continuing to integrate more blockchains. Security education for our users is also a critical part of our efforts, as knowledge of security best practices is essential for self-custody and protection against scams and malicious attacks.

The perfect Web3 wallet doesn't exist yet, but we are definitely working towards creating it with SafePal. Ultimately, the ideal wallet should be as simple and seamless to use as Apple Pay, but much more secure, to truly onboard the masses.

Openness, transparency, and decentralization are the crown jewels of the Web3 ecosystem, and I would absolutely keep them. 

While Web3 is a permissionless ecosystem that welcomes contributions from everyone, I think it would be beneficial if there could be a universal standard of security for DApp development. After witnessing so many scams and rug pulls, I yearn for a clear and open security standard that would audit all existing Web3 applications and warn users if there are risks involved. 

Due to the preference for quick gains in Web3, many new users enter the ecosystem without the necessary knowledge about key principles like decentralization, self-custody, and gas fees. It would be great if we could have a unified user-onboarding process that educates new users about all the essential information before they make their first deposit. While this might be a hassle for some users and could deter them from trying the technology, it could also eliminate a lot of the scam and phishing attack cases that are currently poisoning Web3.