Wallet-as-a-Service: Modularly Transforming Web3 UX

Web3 UX is broken. Imagine you’re in 2018 and are a hardcore believer in decentralized technology. You learn that in 2023, a wide array of financial, gaming, and other kinds of solutions are available, but they still struggle with adoption. Your primary guess, most likely, would be that a lack of generalized public knowledge about these solutions is the culprit.

However, fast-forward to 2023, and we could go as far as to say that most modern Internet users have heard of a Web3 product, whether that is Bitcoin, NFTs, or a specific cryptocurrency, but don’t use them. It’s fair to say, then, that awareness of our ecosystem exists, but we still lack products that:

a) Solve real problems that real users have, AND

b) Are straightforward and convenient to use.

Both clauses are not mutually exclusive. An inconvenient solution for the right problem might still struggle to find much adoption, and, as such, we can point to both a lack of viable solutions and a subpar user experience as crucial factors for Web3’s stagnant growth.  

In this article, we’ll look at the core user experience problems in Web3, some of the emerging solutions for them, and showcase how, at a moment of industry-wide transformation, WaaS tools can help improve the experience of both users and developers.

Assessing Web3’s UX issues

Nearly a decade into the smart contract paradigm, the industry's handful of successful use cases have not been re-versions of Web2 products, but unique propositions taking advantage of Web3's technological edge and capabilities. Some of these applications, like NFTs, crowdfunding, stablecoins, and social financial apps (like friend.tech) can be said to succeed despite, instead of because, the Web3 paradigm they exist in.

There are three types of problems Web3 faces when it comes to user experience: 

1. Infrastructure limitations, affecting developers and not allowing them to serve their users in the best way. These include data privacy, interoperability issues, and fragmentation of ecosystems.
2. Pure user experience problems, arising from the infrastructure available, that inherently create friction for new users trying to access Web3 and limit what existing users can or feel comfortable doing. These include all issues surrounding wallets, gas, and the siloing of the Web3 ecosystem as a whole.
3. Originality and implementation problems. In Web3’s short-lived life, there have been many bubbles creating an incentive for most of the building to happen in the wrong spheres, prioritizing short-term hype and ability to fundraise over Product-Market Fit.

For this article, we’ll focus on the first two types of problems and how Wallet-as-a-Service tools can create a solution to them. As the industry develops and incorporates better solutions for itself, the third type should be in a better position to solve itself through the creativity of those working in creating consumer applications.

Pure UX Web3 problems (primarily affecting users)

External wallets, keys, and transaction management

While Web3 apps often capture no personal user data, (an ideological win for the industry that also simplifies interactions), the friction to newcomers remains high, as best exemplified by the need to set up a wallet. This process, typically a pre-requisite to using dApps and protocols, can involve:

• Installing and managing browser extensions, an invasive and sometimes wholly new experience for some.
• Storing and managing private keys, which can also be intimidating to many. This isn’t necessarily easier if users have a pre-existing wallet, as they now need to think twice about connecting their wallet to a new product, potentially exposing their funds, or maintaining multiple wallets (with the management overhead this represents) to minimize risk.
• Constantly signing transactions, some of them unclear (such as authorization transactions) and others requiring active management (e.g., trying to optimize gas costs). Furthermore, using external wallets causes the user to constantly jump back and forth from pop-ups and alerts that, particularly in complex interactions, almost seem to have the purpose of deterring users from engaging.

All the above not only introduces a considerable number of steps every time a user tries to conduct an activity (via transactions), but it also makes the entry barrier to using Web3 very high. 

WaaS-based approach: By putting the wallet experience directly in-app, WaaS providers can simplify the user experience to a considerable degree, removing the need for additional software. The user interacting with an in-app wallet can also access it via a Web2 login (email, Google account, social accounts, etc.), instead of actively managing keys. In Particle Network’s case, this is achieved via Threshold Signature Schemes using Multi-Party Computation that ensure that users are the only ones with the ability to access their wallets. Particle also streamlines transaction signing to reduce the amount of interactions between a user and their wallet, and opens the possibility of transaction batching and bundling to make the user experience faster and easier.

Gas costs and fiat on-ramps

If wallet friction wasn’t enough of an issue for Web3 to seamlessly port users from Web2, on-ramps and gas can be an even bigger hurdle.

First of all, acquiring tokens to pay for gas for the first time remains a considerable barrier for non-Web3 users. Since users need to have tokens to cover gas costs to use dApps, if they access crypto from entirely outside the blockchain economy, they usually need to set up an account in a centralized exchange, undergo a KYC/AML flow (which can on its own be as demanding as to require them to submit personal information and sensitive documents), and then purchase cryptocurrency through a debit card/fiat account and send to a new wallet. This process can become even more cumbersome if the application they want to use requires them to have a certain specific token, making it necessary for them to acquire their target token + a gas unit, or use an L2 solution, needing bridging and even more gas.

All of the above results in a process that causes tremendous friction for non-Web3 users. From the point where they identify a need or desire (whether that is to profit from a trade or start using a game), they have to go through multiple steps and learn a considerable amount of new information, again worsening the experience and filtering out most users.

WaaS-based approach: WaaS solutions have an incentive to provide the best service possible to developers by integrating fiat on-ramps. Thanks to account abstraction (AA), they can also enable gasless trades, with applications covering users’ costs, or allow for gas payments through other native tokens, reducing friction. In Particle Network’s case, we have developed our own Bundler (now open-source!) and Paymaster as a part of a proprietary AA stack. Particle offers an integrated solution developed in-house including WaaS, this Account Abstraction Stack, and more. At the same time, we maintain openness and modularity, allowing our WaaS to be seamlessly integrated with the AA Stack of third-party companies like Biconomy, Openfort, Pimlico, and others, which can be found in our product documentation. To see an example of an application leveraging gasless trades in a multi-chain setting, see our Apex Pro case study.

Infrastructure Web3 UX problems (primarily affecting developers)

The side effects of scalability solutions

Web3’s current multi-chain, L2-centric roadmap is widely regarded as positive for decentralization and resilience, but also carries interconnectivity and user experience problems. 

Users do care about the result of underlying scalability solutions (i.e. faster, cheaper transactions), but they would rather not deal directly with the complex multi-chain and cross-chain setups underneath them. The current infrastructure setup forces developers to present interfaces that are far from user-friendly, causing users to manually navigate the many steps to achieve their goals, such as signing an ever-increasing amount of transactions to deal with interactions with multiple chains, bridging, and so on.

In short, current interfaces are but a symptom of a systemic focus on infrastructure rather than user experience. Web3 solutions are meant to be open so that they can endlessly compose and interact with each other. But, in a fragmented ecosystem, L2s create a clunky experience for users that deters them from using Web3 products.

WaaS-based solutions: A significant advantage of a WaaS approach is the ability to abstract the difficulty of managing cross- and multi-chain setups via a solution that takes care of the blockchain networks’ signature computation across EVM and non-EVM chains. This provides a unified interface for developers to interact with multiple chains without needing to spend time on navigating the underlying technical differences between them, making the process of building and deploying dApps across various blockchains easier. As we’ll see below, WaaS tools can also abstract the management experience of the resulting transactions from the user experience, creating a more comfortable flow.

Data privacy 

A well-known problem of Web3 is the fact that its most popular smart contract blockchains have transparency as a cornerstone feature. However, as Web3 builds more links to users’ social and real-world identities, the more important it becomes to create an infrastructure that does not automatically reveal sensitive information for users, such as their transactions, holdings, and financial interactions.

Today, developers are severely limited regarding the privacy features they can offer their users. Private blockchains have their own problems, and fragmenting the ecosystem further goes diametrically against the interest of most players. Likewise, private-by-default and public-by-default networks suffer from compatibility problems that, once again, constantly push developers to choose between either one.

WaaS-based approach: As mentioned, WaaS services can utilize real-world and social identities to make the user onboarding experience easier. This makes for an approach that, while friendlier towards users, isn’t quite “ideologically” Web3. The next step in the evolution of combining approaches while retaining privacy is a core roadmap item in Particle Network’s development –incorporating Zero-Knowledge (ZK) technology into the mix. Particle’s first-of-its-kind zkWaaS aims to use a zkEVM to fully shield the information shared with the WaaS provider from external observers, achieving the goal of using users’ Web2 identity without ever writing this information on-chain, storing it in a centralized server, or expose it to WaaS providers and dApp developers. 

The Wallet-as-a-Service paradigm, its future, and evolutionary steps

Wallets, as the primary interaction surface with blockchains and Web3, are called to facilitate the onboarding and use of applications. However, to do so, they might need to act in a different way from the current standalone wallet paradigm to present a cohesive, friendly framework for developers.

WaaS solutions are fundamentally different from standalone wallets (e.g. MetaMask) in that they are not necessarily a one-size-fits-all application. Their primary goal is to be adopted by dApps to facilitate user onboarding and interaction through an in-app, rather than an external wallet, in as short a time frame as possible and with as many possibilities built-in as possible in a simplified interface. Using WaaS services, builders can make life easier for their users and themselves, spending their time developing unique marketable consumer products, rather than tackling base-layer issues.

Above, we’ve exemplified the different ways WaaS tools are already presenting solutions for some of Web3’s existing problems, and have already touched on how, in the future, these solutions can be taken to the next level. We have also touched on how infrastructure changes like Account Abstraction open a unique path for WaaS tools to finally create a friendly way to interact with Web3.

Let’s wrap up by looking at what the future holds for WaaS tools and, through their integration, Web3 as a whole.

The future of WaaS tools and the evolution of Web3 UX

As WaaS tools evolve, we see a future in which modular solutions allow developers to plug into whatever components are more interesting to their specific use case, applying them to their work and replacing the current one-size-fits-all approach. 

One such integration, as we’ve hinted, is the inclusion of ZK modules such as zkEVMs into the mix. ZK tech can take users’ ownership of their data to the next level by allowing users to verify their identities and write their activities to the blockchain in a way that’s only decodable by themselves and otherwise private by default, creating a seamless transition from Web2 to Web3. As such, Web3 is uniquely positioned to tackle a problem that pre-dates it, enabling truly permissionless privacy while, thanks to ZK disclosures technology, also creating the possibility for new legal and compliance dynamics.

We’re also thrilled by the possibility of integrating intent-centric design, as we described in our previous blog post. With the incorporation of an intent-based module, zkWaaS and WaaS tools can put users back at the center of products, creating better products and plugging into Artificial Intelligence-based systems that can also play a considerable part, allowing for better interpretations of users' intents to address them. In short, we envision WaaS services to transform the interaction of users and Web3 products by:

• Creating a seamless transition from Web2 to Web3.
• Incorporating user privacy, putting users in full control of their data.
• Making cross-chain flows an invisible feature for users whenever they do not need to be aware of them.
• Empowering users to realize their goals in as few steps as possible by automating interactions between protocols.
• Giving users more options to pay gas or abstracting the need for them to pay it altogether.
• Simplifying transaction signing and interactions to the minimum so that users can spend more time using products and enjoying the experience of doing so, rather than constantly thinking about signatures.

… and of course, providing better, more intuitive user interfaces.

Web3’s larger vision is one of openness, hyper-connectivity, and never-seen composability is frankly an exciting prospect. Once we have products that support users' real goals, interconnected by fast, efficient, private infrastructure that anyone can seamlessly onboard ourselves to, we might be in for an explosion of creativity, leading to creators having an easier time solving problems in an attractive way for users, and onboarding the next billion users to our ecosystem.

As far as we’re concerned, a fascinating time to be building.

If you’d like to learn more about what the future is bringing for Particle Network, feel free to check out our v2 breakdown. You can also learn more about how dApps and projects are already transforming their users’ experience with v1 in our case studies page.

About Particle Network

Particle Network powers chain abstraction, addressing Web3's fragmentation of users and liquidity. This is enabled by Particle's Universal Accounts, which give users a unified account and balance across all chains.

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