Will You Know What Chain You’re Using in the Future?
If you’re reading this, you likely use Metamask and have bridged to different L1s, and couldn’t fathom not knowing what chain you’re on. You need to buy the chain’s token for gas, set your wallet to the correct RPC, etc.. It’s impossible to not be aware of the L1 you’re using, and you probably have opinions about it too.
But we are early adopters. We’re likely still in the crypto development cycle that’s analogous to that massive PC you had growing up with a thick monitor and bulky tower that connected to the internet with dial-up and blocked your landline phone in the process (the writer of this piece has now been age doxxed as a 28–35 year old).
Things are imperfect, risky, and a little glitchy at times, but those high walls keep the normies out and acts as a selection mechanism for DeFi. Only the self-educated, tech-minded, and curious could enjoy all this, and DeFi has acted like a light to moths congregating those that fit this description into the next Industrial Revolution. It’s why our communities and culture are so awesome.
Here’s a fun thought exercise: in the future, will your wine aunt know what chain she’s using when consuming her favorite Dapp?
What’s the best analogy for blockchains we have today to think about this? I think cloud providers come closest.
When you log in to Netflix, I doubt you’re aware whether they’re using AWS or Azure. There’s no reason to know. And Netflix wants you to think you’re on their platform using their services, so they’re not going to advertise it.
The blockchain is something like the cloud provider in web3; it’s your de facto hosting service. Unlike the cloud provider, it’s hard to picture fully obfuscating the chain you’re using for one big reason: gas.
The L1 token must be bought and used to transact on the network. Logistically this means you’ll probably at least incidentally need to know what chain you’re using. Also, the introduction of tokens changes the mental paradigm for why you care in the first place.
Ethereum is a triple-point asset: a capital asset (eg stocks, bonds); a transformable asset (eg commodities); and a store of value (BTC maxis down bad). Assets like this have never existed and been accessible so readily. Providing completely unprecedented investment and ownership opportunities (not financial advice).
Most L1 tokens fit this description. The change in mental framework for what these tokens mean not just for use but for value accrual for the chain they support likely means Aunt Susan may actively want to know what chain she’s on, because if she likes the Dapps on there she may want to hold some of the native token for both investment and utility reasons. Similar to how if she really likes Netflix, she may want to own the stock too. Except now the stock also let’s you pay for Netflix service!
However, there is a scenario where the incurious could be completely unaware what chain they’re using, but this is what it would take:
You’re on your favorite Dapp’s website UI and have some USDC in your bank account and are ready to consooom. There’s no mention on the website of what chain this Dapp lives on (let’s pretend it’s on Ethereum). How do you pay for this Dapp’s services without ETH?
You never got an Ethereum wallet or had any desire to self-custody, you like feeling safe with your bank account. So you link your bank to the Dapp’s API, and can pay for all transactions with USDC, or maybe even fiat. How?
When you go to the Dapp’s site and link your account, all token bridging and zapping is done behind the scenes to make this happen. Because you don’t control your private keys, all the transactions to bridge and zap only need you to click what you want in the UI to “sign” the transaction and trigger the process, and your USDC is swapped and transferred as needed into ETH. Or maybe nothing’s zapped at all, maybe the Dapp has services specifically for these types of users and they keep plenty of ETH on hand to deploy for you and simply charge you in USDC for what you use, and that charge includes gas plus a convenience fee.
Kind of how like now you’re paying for the cloud provider that Netflix uses, but that’s baked into the subscription fee and you’re never made aware of it.
It will be a long time before banks and Dapps are integrated so seamlessly that this is a reality. However the speed and low cost of L2s and alt L1s make it a very real possibility. We bet against this “unaware consumer” becoming the status quo though. It’s our belief that crypto will change the mental framework for ownership, value accrual, and utility. Even normies will care and want to be aware of what they’re doing onchain and who’s powering it.
The information presented here is meant for educational purposes, and is not investment advice. Any past performance, projection, forecast or simulation of results does not necessarily indicate any investment’s future or likely performance. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by STRIPS Finance.