Current Status of Web3 Development: Challenges and Emerging Solutions in 2024

Imagine a bustling new city under construction - ambitious plans, towering skyscrapers, green spaces, and innovative infrastructure, all hinting at a bright future. However, if you had to apply for a special permit to enter each building, the allure of this glittering high-rise might be significantly diminished.

Web3 is like this new city, full of potential and passion, attracting new "citizens" ( users and developers ). They are drawn to the prospects of decentralization, privacy, and taking control of their digital lives. While some key challenges still hinder its widespread adoption, emerging solutions like chain abstraction are paving the way for a more unified and user-friendly Web3 ecosystem.

Challenges Facing Web3 Today

• Scalability and Performance Issues: Blockchain scalability remains a core issue. Networks like Ethereum often face high transaction costs and low speeds, especially during peak times. While layer 2 solutions help improve blockchain performance, the demand for scalable infrastructure continues to grow as the adoption of Web3 increases.

• User Experience(UX) and Accessibility: For many newcomers, Web3 remains difficult to navigate. Nearly 50% of potential Web3 users abandon the process when asked to use a crypto wallet, highlighting the steep learning curve faced by newcomers. Concepts like private keys, multi-chain Web3 wallets, and decentralized identities can be confusing, and managing transactions across different networks complicates the user experience. Improving the Web3 user experience is crucial for attracting a wider audience.

• Security Issues: Security remains a significant barrier to trusting Web3. In the second quarter of 2024, 184 on-chain security incidents resulted in a total loss of $688 million. Issues such as smart contract vulnerabilities, blockchain security risks, and phishing attacks highlight the importance of robust security protocols and privacy-enhancing technologies. Additionally, cross-chain bridges frequently become targets for hackers, with losses across multiple chains approaching $800 million in 2023, underscoring the demand for secure interoperability solutions.

• Fragmentation: Fragmentation in Web3 refers to the disjointed and isolated nature of various blockchain ecosystems, which may limit interoperability, user experience, and the effective transfer of assets and data. The main types of fragmentation include:

1. Fragmentation of the blockchain ecosystem: Different blockchains have unique protocols, tokens, and consensus mechanisms.

2. Fragmented Liquidity: Liquidity is spread across different blockchains, reducing the overall liquidity available on a single network.

3. Fragmented Development: The programming languages, tools, and standards of different blockchains vary, increasing development difficulty.

4. Governance Fragmentation: The governance models between different blockchains vary significantly, leading to inconsistencies in rules, voting mechanisms, and community standards.

The Role of Chain Abstraction in Web3

Chain abstraction addresses many Web3 challenges by simplifying interactions between different blockchain ecosystems. It allows users and developers to interact with decentralized applications (dApp) without having to directly manage the complexities of the underlying chains. The advantages of chain abstraction include:

• Enhance interoperability: enable dApps to run seamlessly across multiple blockchains, reducing fragmentation.

• Enhance user experience: Simplify the Web3 usage process and lower the entry barrier for new users.

• Enhance security and resilience: Allow multi-chain security protocols and redundancy to reduce the risk of vulnerabilities on a single chain.

• Optimize Scalability: Allow dApps to route transactions to less congested networks, optimizing performance and costs.

Other Emerging Solutions Enhancing Web3

In addition to blockchain abstraction, there are other technologies helping to address the major challenges of Web3:

• Layer 2 scaling solutions: such as Optimistic Rollups and zk-Rollups, used to improve transaction speed and reduce costs.

• Cross-chain bridges and interoperability protocols: help create a more interconnected blockchain ecosystem.

• Modular blockchain architecture: allows for greater flexibility and customization, supporting widespread adoption of Web3.

Anti-fragmentation of Web3

Overcoming the fragmentation and Web3 challenges that limit the development of decentralized networks is not an easy task. With the rise of chain abstraction and other emerging solutions, they will play a crucial role in transforming Web3 into a more unified, user-friendly, and accessible ecosystem. These technologies are key to unlocking the potential of decentralized networks, much like a universal pass to all the beautiful sights of the city.