When there is only space for the past, there is no place for the future. - xh3b4sd
Onchain onboarding is solved, technically. And with that claim I want to make the case that we already have all the tools that we need for users to just get started on any decentralized application. What that implies is that users to not have to worry about blockchains, gas tokens, transactions or even wallets anymore. As far users are concerned, the future is already here, it is just not evenly implemented. Back in the day, people needed a wallet in order to use any dApp. And even if you had a wallet, you also needed some ETH or whatever gas token in order to make a transaction. For that you also had to know which network you are signing transactions for. And what is even a network, dear reader? The onchain experiences that we can build today are completely different and users don't have to worry about anything of the above anymore, if application developers were to leverage all of the latest best practices of course. The issue today is, many of the onchain applications out there have not quite caught up just yet. We still see awfully complicated and counter intuitive user experiences on many dApps today. Often you are still required to have a wallet. Often you are still required to know what chain you are transacting on. Sometimes you even have to login in order to see any website content at all. This last case is one of the more mind-bending mistakes I see app developers do. Straight to jail! All of the technical blockchain nonsense is utterly overwhelming for normal people, which is also why it has been so hard to onboard outsiders into the crypto industry. Using account abstraction, gas sponsorship and embedded wallets, we can now hide all of those technicalities and simply allow the user to play around with any onchain application. Just like that! What we are doing with Uvio now is to leverage all of latest best practices mentioned, resulting in a beautiful user experience comparable to any other modern web application. You want to know how this works? You can simply login to Uvio right now and propose your own claim onchain or stake your reputation in one of the existing information markets. The login works flawlessly with an email address or Farcaster account. If you like self custody you can also simply use your own wallet of course. But we do not force that upon normal people on the internet anymore. And that is the point. When you login to the Uvio platform today, the system mints some UVX tokens for you onchain, which allows you to start participating in all UVX information markets immediately. Think about what a magical onboarding experience this is! Shoutout to Privy for making this happen under the hood by the way! You simply login, and start playing. You need no wallet, you need no knowledge about blockchains, you do not need to pay gas fees. You do not even need to understand what a transaction is. And because we are minting UVX tokens for the user on signup, every user can use the platform right away, without having to transfer money or share credit card information. I believe that the normal web experience that Uvio delivers onchain already today, will become the standard for any decentralized application in the future. This is how we are going to work and facilitate business onchain for the next generation of internet users! Over the past decade, all of our core researchers and engineers have brought us all of these rather boring but ultimately necessary infrastructure tools to build onchain apps that actually make sense. Now it is on us to use those tools in order to make users happy. Now comes the time of app developers, but onchain.
Uniswap was Ethereum's first breakthrough dApp during DeFi summer back in 2020. Uniswap has now announced to launch its own L2 rollup called Unichain as part of the OP Stack Superchain ecosystem. And here is a question that got asked the other day. Do you think Unichain is bad for ETH because Uniswap MEV revenues go to UNI token holders? The question posed here highlights the very heated debate about the value accrual mechanisms for L1 tokens. The basic question is this. What makes a token valuable? The Solana narrative today is that chains, and consequently their tokens, are valuable because of the MEV they can capture. The big problem with the Solana narrative is that most MEV today fundamentally is a function of robbing users onchain. And oddly conveniently, this entire narrative did only recently get popularized when Solana became actually really good at robbing users, which is a testament in and of itself. Those kinds of MEV based revenues generated today will very likely turn out to be short term flukes, and consequently long term disasters. Ask yourself. Would you like to use anything that takes more money from you than it should? The answer is unquestionably no. Over time we will give all MEV extracted from users, back to those users, because that is the place where this extracted value belongs. The only thing that matters long term for the value accrual of L1 tokens like ETH, will be the token's use as unit of account, store of value, and medium of exchange inside of its own native onchain economy. Those properties, the properties of money, will ultimately define a token's monetary premium. So no, I do not think Unichain is bad for ETH. I think Unichain is good for ETH, because Unichain grows the pie of economic activity on top of Ethereum, while using ETH as money. How on earth can this possibly bearish?
Here is a bad take I came across on the timeline this past week. "Lots of people are needlessly launching L2s and L3s because they can’t figure out a business model." I am not sure whether this is intentional gaslighting. In any event, those kinds of takes are ignorant at best. And as we discussed in past Powerlaw memos, those kinds of takes seem to confuse inputs with outputs amidst the intricacies of complex systems. Every launched rollup increases the surface area for experimentation and grows the pie for the Ethereum ecosystem. What will be effectively needed will be decided by the market, as it should. But in order to figure out the result, we have to run the experiment first. Judging economic activity before the fact is by definition counterfactual. Ethereum is an ecosystem to let a thousand flowers bloom. And some people out there manage to come up with the mental gymnastics to argue that this is somehow bearish for ETH. Meanwhile, others bet the farm on a ponzi scheme like Bitcoin without understanding what a security budget is, nor what disastrous consequences are waiting to unfold for blockchain networks without any economic activity on top of them whatsoever. Technology must be useful in order to be valuable. And the only really useful blockchain network that affects the lives of people in the real world today, apart from number go up, is Ethereum, and Tron if you care a lot about stablecoins. The rest is not even close.
Based on Dune metrics we saw the third consecutive week of net inflows for the ETH ETFs at around 10 million USD. That is not a lot of money for what we are trying to achieve here, but for now we got to be happy with what we can possibly get. It does not make sense to annualize those flows, but if we did, then 3.5 billion USD is nothing to scoff at. Just for comparison, the BTC ETFs showed over 300 million USD in net inflows over the same time period, which is an entirely different ballpark all together. On some days we see no flows at all into ETH ETFs. At the moment it is not pretty. Though it looks like that the long term trajectory for those ETFs is up only. And just generally, we like that.
At last, I would like to invite anyone of my readers to reach out, if there are any questions or ideas for collaboration. I want to write about your startup, strategic execution and elegant mental models. My brand archetypes are sage, outlaw, magician and creator. If you would like me on your cap table as an angel investor, then feel free to send your pitch my way. If you would like my feedback or engage in an interesting conversation, then I am happy to chat or have a nice dinner over some sweet red wine. If you are a writer yourself, then I would love to talk about the art of writing and maybe get your feedback on my writings here. If you think we should work on something cool together, then please reach out and let's be friends. And if you haven't tried out Uvio, go play around and leave us some feedback on Discord or Farcaster.