TVL on Ethereum has been decreasing steadily giving way to newer chains with their own unique use cases and lower gas fee. The multichain future is imminent, and it is clear that no one chain is going to emerge as the “winner”. For a true multichain world to exist, the chain level details need to be abstracted away from the user.
Decreasing TVL in Ethereum
Users don’t care about what frontend/backend stack an application is built on, and neither should they care about which chain a dapp happens to be built on. Currently, users bear the burden of acquiring native gas tokens and manually bridging liquidity between chains. This is bad UX, and a fundamental roadblock in the adoption of new chains, a roadblock in the greater dream of a multichain world.
All dapp interactions are blockchain transactions, and these need native gas tokens. Acquiring these tokens on myriads of chains is a major hassle.
Moving assets between these chains is another pain. Some bridges take hours to move funds. Onboarding is time-consuming, complicated & expensive. As dApps start scaling to multichain architecture, users bear the burden of added complexities. The multi-chain vision of web3 compounds the already existing UX issues.
Some of these chains are non EVM compatible and require using different wallets from the ones that a user might be familiar with. Installing multiple wallets and remembering to switch between them is another UX disaster.
Communication between chains is still an unsolved problem. It is non-trivial and highly technical. In order to build multichain dapps, developers need to first set up their multichain infrastructure, which is another expensive and time-consuming process.
These issues have resulted in fragmented liquidity & usage, which further lead to disjointed communities with lower network effects & lower composability for the multichain.
Users need to pick between either enjoying Ethereum's network & composability or layer 2's cheaper & faster transactions, but not both.
Wallets today are non-modular, non-pluggable, and non-extensible. Much like how browsers enable web2, wallets enable web3. The wallets of today are like Internet Explorer circa ‘95.
They only support one type of chain and have no way for dapps to customize or build features on top of it. Dapps do not have meaningful ways of communicating to a user what a transaction is about or to easily find out about other transactions on-chain.
The current solution can not scale to a multichain world.