Web3 Glossary - T, U of web3
Understand transaction dynamics in web3 and all things around UX in the web3 space
Happy Monday :)
A whooping $670 mn were identified in crypto losses in Q2 of 2022🤯🤯
Now that I have your attention, let’s get to some learning👀
Token, coin, Cryptocurrency, ETH, DOGE: Are these all the same? If the answer was YES or Maybe, today’s post is for you!
Today we have letters T and U in the web3 glossary:
👉T: Token, testnet, transaction, TPS, TVL
👉U: All things UX in web3
Grab your coffee, coz it's a slightly longer ‘n’ interesting post today that you wouldn’t want to miss🤗
Token is a digital asset created on an existing blockchain & can be used to represent digital and physical assets or to interact with Dapps. It allows the holder to use it for investment, to store value, or to make purchases.
They’re created through an ICO (Initial Coin Offering), crypto tokens are often used to raise funds for crowd sales.
💡Crypto tokens ≠cryptocurrency & altcoins
Example: LINK, UNI, AAVE
Simply put, Cryptocurrencies are the native asset of a blockchain like BTC, MATIC, or ETH, whereas Tokens are built on an existing blockchain, using smart contracts.
A common question in the crypto space is, how many TPS can any blockchain handle?
What is TPS?
👉Transactions per second
It's the number of transactions that a blockchain can handle per second, & is used as a benchmark to measure its computational power. The number is purely theoretical
It's calculated by knowing the:
👉 The average transaction size
👉 The block size.
Example: A block size of 2 MB, an average txn size of 1 kb, and a block time of 30 seconds would equate to a theoretical TPS of 167 ((1000/2)/30=167).
👉Bitcoin is currently around 7 TPS, Ethereum around 15, Solana at upto 65,000 Polygon upto 72,000 TPS
But, Why does it matter?👀
Because it indicates the network's current capacity to process txns & hence is used as a benchmark for blockchains. The faster the network is the better it manages congestion. This gives it a higher payment efficiency and thus, a higher chance of adoption, institutional or individual.
📌IMHO, TPS should MATCH the NEEDS of the BLOCKCHAIN
For some even a TPS of 15 would do and for some even 15k would be less 👀
Total Value Locked (TVL)
Talking about crypto how can we miss talking about the market!
TVL is the total value of assets locked (i.e. being used) in a specific protocol. DeFi lending protocols like Compound Finance and decentralized exchanges like Uniswap use liquidity pools which lock assets in a vault, and therefore have a TVL.
📌Ethereum currently has highest TVL at $7.9 bn
TVL is an excellent indicator for the DeFi area of cryptocurrency & probably the most utilized to assess the health & growth of the market.
Coming back to the technology that powers the value locked in the crypto market!
The cost of failure or mistakes on a Mainnet is very high and at times irreversible so developers need an environment where they can comfortably work without these risks.
That's why we have testnets 🚀
Its the Minimum Viable Product (MVP) of a blockchain
Technically, its a software environment that mimics a Mainnet blockchain, mainly used to test network upgrades and smart contracts before deploying them to the Mainnet.
But why testnets though?
Because you can test & experiment with you smart contracts without risk to real funds or the main chain. Testnets also help you ensure that the smart contracts & DApps you deploy are functional and secure.
👉Testnets operate on a separate ledger.
This separation creates a low-risk environment where developers can test and experiment without the costs of deploying on the Mainnet.💯💯
ex: Rinkeby and Kovan are Ethereum based testnets.
Looking for some hands on?👇👇
A guide on deploying smart contracts to Kovan testnet:
If you’ve been following this newsletter and the web3 space, I am sure you’d agree that Web 3 is redefining how we communicate and share information.
However, while developers are busy building the infrastructure of web3, the
user experience of most dApps has taken a back seat.
With over 4.95 billion, daily active online users spending a fair share of their day on the web, most people have not heard of of dApps or the blockchain technology that powers them.
A small percentage of those who have, often find it difficult and complex to use.👀👇
Understanding the concepts, dynamics, language and visual design of Web 3 and communicating the difference from Web 2 presents a unique challenge to developers and designers alike.
Do you see a problem here?🤔🤔
UX is often only equated to design. It’s more than that.😑
UX is a core aspect of any successful company and plays a vital role in creating immersive experience that leave users hooked to their products.💯
To bring the vision of web 3 to mass adoption, solutions must be user-friendly, and the interfaces should be simple enough to onboard people with absolutely no idea of how a blockchain works.
This is where design comes in!
Ensuring that the structures built on top of the decentralized infra are abstracted, accessible and usable for all users becomes vital
UX is not just a design problem!
It is not just about how good your DApp looks, but also about how it works, how easy it is for users to get onboarded, how scalable the solution is, how easy it is understand the features etc.
A lot of the problems that we see with currently used Dapps and wallets aren’t actually design problems at all. ❌
It all boils down to the ease of usage and the user workflow.✅
IMHO, these problems aren’t something designers can solve alone and it’s a collective effort of developers and designers.
If we think about it🤔
In case of web2 - Google, Facebook, Apple, Amazon, etc. were the early adopters who saw the possibilities before the rest of the world and built the infrastructure that enabled mass adoption.
There are many such companies in Web3 as well
For eg: low TPS & high gas fees was an inhibitor for web3 adoption in the Ethereum 1.0 ecosystem. Paying 1000’s of rupees while doing transactions is a bad user experience.
Polygon identified this problem early on and built layer 2 solutions on ethereum chain to solver for the user experience in the DeFi space. The L2 scaling solutions & layer 2 solutions like PoS chain, Zk rollups have increased the TPS manifold & brought down the gas price by a large margin
Its imperative to note that a good UX also drives the adoption of the ecosystem. There are currently over 37k Dapps powered by Polygon. They identified the pain point in the Ethereum ecosystem and built solutions to fix the user experience.
Let’s take an example of a commonly used wallet: MetaMask
The app has a good UI design, but what about the user experience?
Have you tried adding a network to your wallet? Do you know the RPC URL and chain IDs of different networks out there?
As a developer who’s worked on dApps I would easily know this but for someone who just understands what decentralisation is, the UX isn’t the best. I wouldn’t say its their fault, things in web3 space are like this at the moment.
Now that we know things aren't right, we gotta FIX them! 💯
Let’s talk about time management on transaction interfaces.
During network congestion, txn can take longer to process. It’s important to clarify these data points and manage users' wait time efficienty.
A good UX would take care of the following:
📌 Clarify the relationship between gas fees and waiting time
📌Show progress or waiting icon until the txn is approved or denied.
📌Provide feedback on potential causes and/or solutions when a transaction takes more running time to process.
📌Provide the status along with txn details
Pivoting to another aspect - transparency, which is the backbone of web3
Data exposure increases users understanding of how the system works, it provides evidence that the system is actually decentralized & safe. In case of web3 it gets tricky on what data to show and what to abstract 🤔
Sarah bakers once said:
People want to see the blockchain, even when they don’t need to!
From a data standpoint, I believe
📌The data must be actionable
📌Data should be used to build trust and educate users
📌Use less technical jargon, present information that aligns with users natural communication patterns
📌A sense of belonging to a community is more important in dApps as users will need to bond to a decentralized brand and product.👇👇
Also Web3's not just about Blockchain and Metaverse, its a decentralized and semantic web, that aims to provide a transparent, reliable and smart experience 👀🛠️
P.S.: This is in no way, an exhaustive list, simply a compilation of the things I found missing when using the DApps and areas where UX from a user point of view can be improved.
Feel free to add your viewpoints and let me know your take on this in the comments 💯💯
That’s a wrap for today!
Stay tuned for more on the new vocabulary of the web for next 30 days.💯
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