Crypto Adoption: Onboarding Challenges Persist

The concept of Web3 has been discussed extensively over the years, with numerous speculations on what will drive its widespread adoption and what factors could be hampering the onboarding process. Some industry experts, particularly in the Web3 gaming sector, have suggested that market excitement and eagerly awaited blockchain games could catalyze mass onboarding. According to a survey report by key management network Web3Auth, published on February 22, feedback from 3,378 Web3 users, developers, and decision-makers worldwide indicates that several key issues need to be addressed before wide-scale adoption becomes a reality.

In an interview with , Robert Hoogendoorn, head of content at blockchain analytics platform DappRadar, pinpointed two significant hurdles: the need for a “simplified interface and user experience” and a general increase in consumer knowledge about cybersecurity. He mentioned that while progress has been made in some areas, there is still a long way to go. For instance, 60% of American consumers reuse the same password across multiple accounts, a behavior that poses significant risks in the Web3 space. Hoogendoorn emphasized that such lax security practices could lead to users falling victim to scams, highlighting one of the main challenges of onboarding new users into Web3.

Hoogendoorn also noted that it’s common for technological advancements to encounter onboarding challenges. He believes Web3 has made significant strides in this area. He acknowledged that insiders are enthusiastic about the technology, but for the average user, the focus is on the overall experience. He mentioned that only recently have Web3-powered services and games reached a level of sophistication that could potentially attract millions of users.

The Web3Auth survey highlights that the primary barrier to Web3 adoption is concerns over security and risks to assets. Hoogendoorn observed that the crypto industry has long been perceived as a “wild west,” a reputation that does not sit well with the general public. This negative perception, exacerbated by high-profile incidents such as the FTX collapse and the trial of Sam Bankman-Fried, who was sentenced to 25 years in jail for fraud, has contributed to the public’s hesitation. Likewise, the downfall of the $10 billion crypto hedge fund Three Arrows Capital in 2022 added to the skepticism.

Additional concerns such as rug pulls and hacks have also hindered Web3’s progress. A report by blockchain security firm Immunefi stated that over $200 million worth of crypto has been lost to hacks and rug pulls in 32 incidents in 2024 alone. Hoogendoorn suggested that improving public perception through education and positive public relations could be part of the solution. He believes that educating the public on best security practices and potential vulnerabilities in Web3 are crucial steps.

Speaking with , the BNB Chain Core Development Team noted that multiple barriers could impede Web3 onboarding. They highlighted a lack of education, unfamiliar user experiences, and insufficient incentive mechanisms. They stressed the importance of user-friendliness, secure infrastructure, and educational initiatives to facilitate the mass adoption of Web3. They suggested that providing engaging ways for users to get involved, such as through incentivized meme campaigns, could help ease the transition into the Web3 space.

The team underscored the importance of a robust infrastructure and seamless user experience in onboarding new Web3 users. They mentioned that the journey to mass Web3 adoption would likely involve a gradual, multifaceted approach, combining innovative technology and user-friendly interfaces with ongoing education. Their focus remains on improving the usability of existing technology rather than waiting for transformative breakthroughs to facilitate the shift from Web2 to Web3.

Pavel Salas, chief growth officer at the Gear Foundation, remarked that Web3 onboarding is inherently complex and often challenging for non-technical users to grasp. He gave the example of playing an on-chain game, which requires users to first set up a wallet and acquire necessary tokens, followed by the need to pay for gas with each transaction. This complexity can deter potential users from engaging with Web3 applications.

Sami Start, co-founder and CEO of developer integration toolkit Transak, identified the transition from fiat to crypto as a critical barrier. He pointed out that only a small percentage of global internet users currently own cryptocurrency, indicating substantial obstacles to entry. He also noted that regulatory challenges and the fragmented nature of the Web3 ecosystem further complicate the onboarding process. Start emphasized that streamlining these processes and simplifying fiat-to-crypto conversions are vital for making blockchain technology accessible to a broader audience.

Ken Timsit, managing director at Web3 startup accelerator Cronos Labs, mentioned that for most users, the initial onboarding often occurs through custodial crypto exchange platforms. These platforms, which are typically regulated and implement KYC measures, serve as the primary entry point into the crypto space. Timsit emphasized the need to develop technology geared toward mainstream users rather than experienced crypto enthusiasts. He pointed out that many recent successes in the Web3 space have been driven by a knowledgeable user base, suggesting that the industry needs to balance catering to experienced users with the goal of appealing to a broader audience.