Race of Adoption: Ultra-Fast Blockchains Set to Rule for Need for Speed in Cryptocurrency World (Opinion)
Blockchain's speed woes can make or break its future in the digital world. Swift transactions are no longer just a preference – they're a necessity for beating out Web2 giants and steering clear of obsolescence.
As per a16z's Builder Energy Dashboard, infrastructure development takes up a whopping one-fifth of crypto's builders' efforts, with most projects working tirelessly on high-speed transactions at affordable costs. Scalability remains a major stumbling block for the industry.
However, it's essential not to solely focus on the speed race without considering the impact on user experience. In areas where Web3 is gaining ground – primarily trading and gaming – swift settlements aren't a luxury; they're a vital requirement to outperform Web2 competitors.
DeFi Tradesitsign
The demand for on-chain trading is exploding. According to a16z's latest State of Crypto report, DEXs currently account for 10% of all crypto trading, a significant shift from just four years ago when CEXs held an iron-clad 100% grip on the market.
Meanwhile, the total value locked (TVL) in DeFi has bounced back above $100 billion for the first time since 2021, with analysts predicting continued expansion at a 45% CAGR through 2032. The market is rapidly appreciating the benefits of transparent, peer-to-peer trading over opaque centralized systems.
But Web3 doesn't have the playing field to itself – TradFi isn't sleeping on the job. For on-chain trading platforms to lure users away from TradFi, they need performance, user-friendly designs, and reliability that rival platforms like Robinhood or Fidelity. While blockchain may never match TradFi's centralized servers in sheer speed, that's not the source of its advantage. Web3's strength lies in trustlessness, finality, and the ability to offer programmable finance – things that legacy systems can't deliver.
The battle isn't merely about execution speed; it's about injecting trust, efficiency, and flexibility into the financial stack. On-chain trading isn't about making TradFi obsolete; it's about creating a financial system where finality is instant, markets are open, and speed serves trust, not intermediaries.
Gaming: Fun or Frustration?
While gaming has shown flashes of mainstream interest – from Axie Infinity's initial surge to NBA Top Shot's collectibles boom – sustained adoption remains elusive. This year, Ton has emerged as a hub for blockchain gaming, with games like Hamster Kombat, Notion, and Catizen gaining viral popularity.
The potential of blockchain to add extra layers of ownership and economic incentives to gaming is undeniable. Yet, viral success doesn't always lead to long-term success. The key lies in instant asset settlement, true player ownership, and permissionless economies. However, if transaction delays or high fees create friction, Web3 gaming risks becoming merely a novelty instead of a transformative force in the industry.
Unlike DeFi and on-chain trading, which have garnered institutional support, blockchain gaming still operates in its experimental phase. Developers grapple with unique challenges: while traders may tolerate some transaction costs, gamers won't. If fees or latency hinder gameplay, blockchain titles can't compete with the smooth experience of traditional games. That's why some studios, frustrated with existing infrastructure, have built their own chains – like Sky Mavis with Ronin or Dapper Labs with Flow.
This suggests an unmet need: Web3 gaming demands infrastructure fine-tuned for high-speed, low-cost transactions at scale. Instead of forcing developers to design their infrastructure, the industry needs to deliver blockchains that operate as smoothly as traditional servers without blinking an eye. After all, game creators should focus on crafting immersive experiences, not building new networks from scratch.
The Race for High-Speed Blockchains
If blockchain is ever to fulfil its promises in high-demand use cases like on-chain trading and gaming, the industry must create truly scalable, high-speed networks that deliver a seamless experience akin to Web2 platforms. Solana's rapid ascent highlights the appetite for fast, affordable block space, but its struggles with uptime demonstrates the challenges in delivering scalable speed without compromise. Even Ethereum's Layer-2 solutions, while improving speed and cost-efficiency, bring their own set of obstacles – mainly interoperability and fragmentation.
The destination is clear, but time is of the essence. Blockchain infrastructure needs to evolve swiftly enough to meet Web3's aspirations before Web2 incumbents co-opt its best ideas. Speed is crucial, but it's not the only goal. The real goal is to construct a trustless, open, and comprising foundation that Web2 can't replicate.
Author bio
Tristan Dickinson, the Chief Marketing Officer at exSat Network, a docking layer for Bitcoin, is a dynamic and visionary marketing executive with a wealth of experience in the banking, financial services, Web3, and technology sectors.
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- To stay competitive in the digital world, infrastructure development in Web3 prioritizes high-speed transactions at affordable costs, as shown by crypto builders' efforts.
- On-chain trading, especially in DeFi, is experiencing exponential growth, with DEXs accounting for 10% of all crypto trading, contrary to CEXs' monopoly four years ago.
- Asset settlement speed is crucial for on-chain trading platforms to attract users from traditional finance, offering performance, user-friendly designs, and reliability on par with platforms like Robinhood or Fidelity.
- In the race for high-speed blockchains, Solana's rise signifies appetite for fast, affordable block space, but its challenges with uptime demonstrate the difficulties in delivering scalable speed without compromise.
- The demand for gaming on blockchains remains high, with platforms like Ton gaining popularity this year, but sustained adoption requires instant asset settlement, true player ownership, and permissionless economies to avoid becoming mere novelties.
- The Chief Marketing Officer at exSat Network, Tristan Dickinson, calls for swift evolution of blockchain infrastructure to meet Web3's aspirations before Web2 incumbents co-opt its best ideas, emphasizing trustlessness, openness, and composability as the ultimate goals.
- Developers in the gaming industry are faced with unique challenges, as gamers won't tolerate transaction costs or latency that might hinder gameplay, necessitating fine-tuned, high-speed, and low-cost infrastructure for successful blockchain gaming.
