Why Crypto Isn't Going Mainstream Anytime Soon

And it's your fault devs

There is a lot of speculation to why the masses aren't running open-armed to crypto.

Is it the rug pulls?

Is it the complexity?

Is it the lack of use cases? Volatility? Anime soft-core porn & waifus everywhere?

Well, actually yea, all that stuff doesn't help. But honestly, the #1 reason is you Devs. You and the atrocious UI/UX.

Users are going to love logging in every 8 hrs to harvest the $poo coin from their DogButtCoin v2.0…time to post a meme then take a nap with my waifu pillow

Stop making it such an expensive chore to use your protocols. Think about customer UI/UX a bit from the prospective of someone who doesn’t have infinite time.

People have been conditioned to buy & hold through the constant beating of financial advisors. They love to buy boomer dividend stocks and let their dividend reinvestment plan (DRIP) work for them. They get snail mailed their quarterly statement, don’t understand it, and go back to watching Netflix.

If we want DeFi to go mainstream, it can’t be a full-time job to manage the 0.5 ETH position in a project. Some of the specific pain points are:

• Token migrations to v2.0 coins

• Claiming rewards

• Forced contract migrations due to errors/bugs/hacks

I also applied the DeFi process to traditional finance to highlight how absurd it is.

Be Less Poor & Dumb

Let’s address this upfront. “Don’t complain about gas”, “learn to code”, and “be less poor” isn’t going to help drive mainstream adoption. This sentiment may get a lot of likes on twitters from the CT simps, but it isn’t going to play well with the wider population.

To go mainstream, you need to make it accessible to small retail customers dipping their toes in. Most people aren’t going to jump in with huge percents of their net worth to something completely new. If it is prohibitively expensive and the user experience sucks, they aren’t going to hang around.

1. Token Migrations to v2.0 in DeFi

I get it. AGILE. Minimum Viable Products. Start small, fast and break things. Great. But if you want to upgrade your token, do it with a little bit of consideration for the user. You want to upgrade DogCoin to gDogCoin cuz something something benefits something something bridging… (aka you want to grow the protocol you get paid emissions in). That’s cool.

Look at this guy…I will take all your gDogCoins and NFTs

Going from DogCoin to gDogCoin that allows for me to bridge to other protocols is wonderful. But don't force me to:

• Get my hardware wallet out and log in to your site

• Remove my DogCoin from a farm or unstake it (and pay Gas)

• Approve gDogCoin Contract (and pay Gas)

• Migrate my DogCoin to gDogCoin (and pay Gas)

• Approve the new staking contract (and pay Gas)

• Restake my gDogCoin (and pay Gas)

Did you put this on ETH Main net? Now, not only do I have 5 expensive transactions, I need to wait till 3am on a Sunday to do it when gas is less egregious. Thanks guys.

How to Improve Crypto Token Migrations

How to make the migration process suck less?

For starters, have it be 1 click.

But the big one is the protocol or the Devs need to eat that gas cost. Most tokens have 30%, 50%, or 60%+ of the emissions/fees going to the protocol and Devs. You want to migrate tokens to add functionality and grow the protocol (and your own wealth) you foot the bill.

TradFi Analogy for DeFi Migration Process

Imagine if you owned a few shares of Tesla (TSLA) which trades on the NASDAQ. Elon Musk decides Tesla stock would be even better if you could buy it on NASDAQ or the London Stock Exchange (LSE). (Ignore the restrictions on that for the sake of the analogy). So Elon decides to upgrade TSLA and list gTSLA on both NASDAQ & LSE. You can even buy gTSLA on NASDAQ in US Dollars and sell it on LSE for...farthings? shillings? (note - look up what money the Queen lets Brits use for money). Regardless, gTSLA is bridge-able baby.

You never been to London and don't plan to have any use for British currency. But hey, good to know. Hopefully this upgrade pumps your bags. You are cozy holding your new gTSLA and letting the price go up.

Then Elon tells you that your current TSLA is not eligible for the dividend, only gTSLA gets the dividend. Also TSLA will become illiquid eventually since it won’t be listed on exchanges once gTSLA launches. By the way, you need to pay $500 to switch TSLA to gTSLA and it takes 15 mins to do it.

Elon Musk showing how he would burn investors with gTesla modeled after the terrible UX from crypto

Seems absurd right?

2. Claiming Rewards in DeFi

Having to go around to your farms every week or few to collect all your rewards is annoying, but doable. You can always elect not to collect your rewards and let them sit there. And there are auto-compounders on most chains now which eliminate the need to do it in exchange for a little extra security risk. Ideally farming gets easier.

However, the bigger issue around claiming rewards comes when you are FORCED to take action as pools end or rewards change.

Have you been in a boosted farm, collecting nice bonus rewards one day, and next time you check out the farm it was discontinued? Usually a separate non-boosted pool opened up you need to manually migrate your farm over. Switching farms means chores & gas for the user.

I miss announcements of boosted farms ending and I am active on crypto twitter and dozens of discord servers. A normal mainstream investor isn’t going to do that. They are going to sign on to the site and see they just missed out on weeks/months of rewards.

What about protocols that tell you that you need to claim your rewards by a certain time or you lose them?

A recently launched "passive income" project did a migration and you had to claim rewards before the migration. Any unclaimed rewards would be lost. This meant you wanted to wait till as close to the migration deadline as possible to claim your rewards. That way you would lose the minimal amount of rewards. To 'make up' for the inconvenience of migrating, there was a 5-day reward boost post migration. Sweet. But guess what, you had to claim your boosted reward by some deadline. If you didn’t claim the boosted rewards you loss them.

When farming in crypto takes more work than farming an actual farm in real-life….something went off the rails bro

So I purchased a ‘passive income’ and within a month I was required to make 6 transactions with hard deadlines. Oh, and this happened to be on a protocol with a claim tax as well.

I won’t even get into the obvious terrible ideas. For instance there are protocols that start charging a fee for not claiming rewards fast enough after your staking period ends.

How to Improve Claiming Rewards in Crypto

I understand auto-compounding brings it own sets of issues. And there are protocols that will auto-compound for you. But can you at least set up the boosted rewards on top of the non-boosted pool? If I want to let my CatCoin-DogCoin pair sit out there, let me. If the boosted rewards go away, I don’t need to do anything and can just get a lower APR.

And stop having deadlines where users need to claim or they lose tokens/have costs. Let my rewards sit there indefinitely if I want.

Also, if you are going to inconvenience me with a task I have to pay gas on, waive the claim tax. You are forcing me to claim the rewards, its absurd to force a claim tax.

TradFi Analogy for DeFi Reward Claiming Process

Imagine holding Apple stock (AAPL). AAPL pays a dividend and you are a proud new owner of AAPL and excited for that dividend. This is your first stock purchase and a dividend stock at that. You are on your way to wealth.

A couple months later you still haven't received a dividend. Curious. You do a little researching and it turns out owning the stock wasn't enough, you need to send those shares back to the Apple website to be eligible for the dividend. Fine, its the learning curve.

Now you're ready for your first dividend. You check back into your account and see the dividend didn't show up yet though? What? You know you staked it correctly.

You go to the official Apple communication channel and wade through pages and pages of "weenis", "gm", waifu gifs, and copy-pastas. And then you see an announcement that you need to go claim your dividend to receive it. Ok. You go to claim it and you see a fee to claim the money too.

Even better, imagine you find out that you can no longer claim the dividend because you didn't do it in time.

3. Protocol Errors in DeFi

This is one of my personal favorites. Your protocol had a mistake in the code or math and you need to close the old contracts because of it…Well, You need to eat the cost, not your users.

I was invested in a lending protocol and they messed up the calc of the rewards they paid based on the charges they were collecting. Ok, I mean you are a lending protocol so kind of the 1 thing you need to do is get the interest calcs right, but ok.

The resulting actions of the protocol were:

• Freeze all funds in the protocol for weeks

• Require me to manually unstake tokens

• Migrate to new contract

• Restake tokens

I am ok with freezing the protocol and finding/fixing the error. In this case the token lost 80% of its value by time it unlocked and has been down-only since. So making a 1 ETH investment you were down to $500. The first transaction of 3 to migrate the tokens cost over $100 in gas until recently.

Gas has come down recently, so the unstaking gas cost is now $25, however the token has continued to lose value dropping another 80%. (you are now down the proverbial 160% (ie 80% + 80% =160% ) on the investment).

This was all kicked off by someone finding a bug in the code where your lending protocol is calculating the lending incorrectly.

Are you noticing a theme Anon?

How to Improve ‘Protocol Errors In DeFi’ Handling

If you made a mistake, you eat the cost to make your customers whole. I am not even talking about the token being down 80%. Investments don’t always play out. Sometimes they go down. That is fine.

But if there is a hack, error, or bug in your code, and it requires a migration, you eat the cost (again). Also, it should trigger an instant ‘rage quit’ option for your customers. Protocol eats the gas and will swap the governance token for stable coin. We need to normalize that.

TradFi Analogy for DeFi Protocol Errors

You have your savings in a credit union. As a depositor, you are a member of the credit union and also a ‘shareholder’. Profits are shared with members (unlike banks that have separate stock holders to receive the profits).

Uh-oh, the credit union has been paying 10% on CDs but only charging 3% on its loans and its losing money. They freeze your savings account and sort it out. “Well we can’t use that old legal entity, so we created a new one. Your account at old credit union is frozen, you need to transfer it to new credit union to access your money,” the CEO says…*cough cough* “it will cost you $500 to transfer your money to new credit union.” *cough cough*.

I am ignoring the loss on the token value above because that is a risk everyone should be ok with. My experience was a protocol basically following the bank example above. Crazy.

Bonus #1: Whitelisting on NFTs / Launches

Did you think I was going to complain about the white list process protocols are using? Nope.

Sure i have to be on a random discord at 4:20 am and sing a song in the voice chat then spam waifu pictures for the next 6.9 days and draw a foot pic to qualify for your whitelist to spend my in real lifemoney for dog butthole jpegs…I am not going to tell my wife that my collection of ‘Girls eating bananas’ NFTs are the reason she can’t re-design the kids room...but no one is selling a WL spot as passive income. It is knowingly a dumb process.

The next jpeg to moon…100 ETH for this rare double dog butt

If you want your WL to be full of people with so much free time they can do 84 rituals or paid NFT sniping groups who mint & dump...I mean thats on you. (Seriously, does no one think there is a better way? seems pretty obvious tbh). I think it is a crypto-tarded way of doing it. You are getting only the most flakey people to invest at the start of your project…but hey do you. At least it is honest.

Bonus #2: Airdrops & Token Launches

This is fresh in mind as the Bored Ape Yacht Club (BAYC) just launched a cash grab…errr…"utility token”. They airdropped a ton of coins to themselves, then they got botted at launch, and some users who tried to buy in at time 0 saw an immediate loss of over 90% of the value.

I’ll keep this section short, but if you are going to hype your token to retail, don’t botch the launch. You can only burn retail so many times before they just call it a scam and leave.

Summary: Why DeFi Isn’t Going Mainstream

There you have it. The current DeFi process is absolute trash. It is painful and annoying for people to use even for people who are active in the crypto space. It surely is going to be overwhelming for someone who is used to buy & holding a blue-chip dividend stock.

And guess what devs, you fix these user experience issues it’ll benefit you. The true diamond handers aren’t the autistic 20-years screaming HODL in your discord. If they don’t take their megadose of ADD meds, they are going to flake and sell your coin for the new hot thing before the episode of Naruto is over.

Has the true Diamond-handed Chad been fathers the whole time? Can’t do worse than the 20yr old adderrall case screaming HODL in your discord

The truest Diamond-Hand Chad is the confused retail family man who saw crypto on a facebook ad and bought the first thing pitched to him and doesn’t understand how it all works. He is going to forget how to get back to your site and get distracted with life. I mean, his meme game is going to suck, and he won’t dm you every hour asking ‘wen moon’, but….actually it sounds kind of like you guys should try to get retail in.