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Lace Wallet could be your gateway to Web3

Published 17.4.2023

People don't see the Internet as an endless tangle of network protocols, but as a place where they can work, communicate and have fun. They say blockchain is going to change the Internet and we've even started calling it Web3. The idea of Web3 has one major problem. Should the backbone for Web3 be Bitcoin, Ethereum, Cardano, or something else? Most people believe the future will be multi-chain. The team building the Lace wallet plans to support multiple blockchains, and it is very likely that Bitcoin and Ethereum will also be supported. Lace Wallet is not the first attempt in this area, but thanks to the IOG team there is a good chance that it will be one of the first to be reliable, secure, support many blockchains, and gain popularity among users. Lace can be a single gateway to Web3 for you. Users may not even know that the services they use run on many blockchains. The blockchain industry needs a multi-chain wallet for the next wave of adoption, and Cardano may have an advantage if Lace is it.

TLDR

Centralized exchange and lending platforms are multi-chain services with a multitude of custodial wallets. People use them because they can access many blockchains through a single account. If Lace Wallet offers similar services, decentralization will win. Bitcoiners can switch to Lace Wallet if they want to use DeFi services and thus they gain access to the Cardano ecosystem. Lace can onboard cryptocurrency users into the Cardano ecosystem if it offers what they want, which is security, simplicity, and the availability of a large number of services in one place.

The blockchain industry needs a better user experience

The blockchain industry has the potential to fundamentally change the way our society operates, but it will take time before people are ready for it. Blockchain technology is not mature enough for this change to take place in the near future. We will see a slow and gradual adoption. The biggest shortcomings are low scalability (slow and expensive transactions) and unfriendly user interfaces.

Users want to use coins and tokens that exist on the blockchains. They would even like to try and use decentralized applications. What hinders them is often a complex user interface. In order to use any blockchain, you need to install a wallet and get coins to pay fees. This is a relatively big hurdle compared to Web2 services. Therefore, people tend to use centralized exchanges and NFT marketplaces, custodial wallets, or centralized lending platforms that have built their businesses on the existence of cryptocurrencies. All these services could be described as Web2.5. While these services work with blockchains, people access them through centralized intermediaries.

Centralized exchanges or lending platforms are actually multi-chain services with multiple custodial wallets. People just need a single account to hold, trade, or otherwise handle multiple cryptocurrencies.

If someone wants to swap USD for BTC, ADA, and ETH on a regular basis, a centralized exchange is currently the best solution for them. The alternative decentralized solution is too complex. People would have to install 3 blockchain wallets and learn to use wrapped tokens that they could swap on any smart contract platform. So the same goal can be achieved in a completely decentralized way (let's consider that the user uses stablecoins), but it is an operation that requires knowledge, experience, and time to install the wallets.

The use of centralized services undermines the sense of decentralization, as people must continue to trust third parties. If people do not hold coins and tokens in their own wallets then there is basically no reason to build alternative financial and social systems. Moreover, the fees are earned by third parties at the expense of blockchain networks, which need the fees to maintain a security budget. In essence, centralized third parties directly threaten the security of blockchain networks.

The blockchain industry will only prosper if it is more user-friendly. The solution is relatively straightforward and the answer to the current shortcomings is a multi-chain wallet.

Imagine that a user has a single passphrase that belongs to a single wallet and has access to all coins and tokens existing on the major blockchains. Imagine if this wallet allowed direct use of certain services, such as swaps between ADA and USD, or ADA and BTC. Users would only need to make a few mouse clicks. Once Lace Wallet can do that, there will be no reason to use centralized exchanges. If Lace offers the ability to lend coins and tokens, we won't see the lending platform bankruptcies we saw in 2022 again. Decentralization will prevail.

Lace as an entry into the world of Web3

Blockchain networks are inherently ubiquitous, and that includes all services. DEXes or lending platforms will work in the US just as they do in Africa or South America. Access to tokens and services on the blockchain is implemented through wallets. What is interesting for the user is not the specific blockchain, but the access to services that the wallet allows. I believe that people will one day only look at the list of coins and services that a wallet offers. They simply choose one of many available multi-chain wallets based on the information. What people will be interested in is this:

  • Supported tokens: BTC, ETH, ADA, DOT, BNB, USDC, USDA, stocks, bonds, NFTs
  • Services: fast transfer, swaps, lending, farming, DID, NFT marketplace, private networks, gaming

People don't really care what features a given blockchain has, because it's a lot of technical information to them. I remember people's puzzled look when I was talking to friends about CPUs, GPUs, memory cards, or hard drives 30 years ago. Debating decentralization, nodes, or smart contracts arouses similar incomprehension in people. That's quite all right. Computers became massively popular without people knowing they had CPUs and different kinds of storage.

Web2 services have one thing in common. If you want to pay for services or goods, all you need is a single bank account. A multi-chain wallet needs to be the same in this respect, offering you the ability to create a digital identity, pay for goods, buy NFTs, swap tokens, and access a large number of DeFi services. Web3 must be as easy to use as Web2. What people will really care about is the quality and fees for services, not the features of blockchains.

From our perspective, Lace has huge potential as teams focus on building protocols and wallets are an often overlooked topic. Some blockchains are even notorious for being a nightmare to use a native wallet.

A multi-chain wallet with a friendly user interface that makes many tokens and services of different blockchains available will move the industry forward significantly. From our perspective, it must be possible to use Lace for the Bitcoin network and even allow swapping for stablecoins directly in the wallet or to use lending services. This may be why many bitcoiners will be willing to install Lace and thus gain access to the Cardano ecosystem and other smart contract platforms. Higher adoption of Cardano may be greatly boosted just by the Lace wallet.

Lace can onboard a large number of cryptocurrency users into the Cardano ecosystem. But it has to offer what users want and that is security, simplicity, and availability of a large number of services in one place, audit results of individual services, broad support from current Web2 services, and other things.

Conclusion

Decentralization is not as attractive to people as using DeFi services. Decentralization is an abstract term for many and most people don't see the benefits of this feature. Paradoxically, the success of the blockchain industry is based on decentralization, and more utility needs to be extracted from this feature for higher adoption. Connecting blockchains through the Lace wallet will increase utility. Bitcoiners may not be interested in installing the regular Cardano wallet but may find it interesting to swap BTC for a stablecoin. That stablecoin could be DJED. The Lace wallet can offer such a swap and thus onboard millions of bitcoiners to the Cardano ecosystem.

Many people have lost cryptocurrencies due to the use of centralized services. In Lace, all services will be decentralized so people will be insulated from mistakes that third parties can make. For decentralization to win, we need better wallets. Let's keep our fingers crossed for Lace.

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