Why key crypto use cases fell short and where to refocus

Jun 30

Cryptocurrency and web3 technologies have cycled through several “killer app” narratives – from stablecoins and central bank digital currencies (CBDCs) to blockchain gaming, decentralized finance (DeFi), social networks with token incentives (SocialFi), and even the recent AI craze. Each emerged amid hopes of ushering in mainstream adoption. Yet today, crypto remains a niche, with global user penetration around 7%.

The question is: what went wrong with these once-promising use cases, and what will it take to bring the next millions (or billions) of users into Web3?

Stablecoins: The payment silver bullet that isn’t – yet

Stablecoins, digital tokens pegged to fiat currencies (typically USD) – exploded in popularity as a solution to crypto’s volatility. Early on, traders used stablecoins like USDT and USDC as a stable medium of exchange between volatile coins. Over time, the vision expanded: stablecoins would become crypto’s killer app for everyday payments, remittances, and dollar savings in unstable economies, combining the borderless speed of crypto with the reliability of fiat value.

Stablecoins promised to solve two key issues. First, they eliminate price volatility for users who want the benefits of crypto rails without the roller-coaster value swings. A US-dollar stablecoin offers the price stability people expect for payments and savings, making it suitable for commerce and salaries. Second, stablecoins aimed to dramatically improve cross-border transfers. Sending money abroad via traditional methods is costly (around 6% average fees) and slow (days of waiting).

In contrast, a stablecoin transfer can settle in minutes for pennies in network fees. This made stablecoins a compelling tool for remittances and financial inclusion – a way for the unbanked or those in high-inflation countries to access stable currency digitally.

Despite their promise, stablecoins have not become ubiquitous at the cash register or in everyday online checkouts. Merchant adoption remains scant.

There are several reasons for this gap:

(1) Regulatory uncertainty. Businesses are hesitant to accept stablecoins amid unclear or evolving regulations; many governments have yet to fully endorse or supervise private stablecoins, creating fear of future crackdowns

(2) Trust issues. High-profile failures like the TerraUSD collapse in 2022 (wiping out ~$60 billion in value) undermined confidence in algorithmic stablecoins, and even fiat-backed stablecoins faced skepticism over reserves

(3) Integration and UX hurdles. For merchants, adding support for stablecoins is non-trivial – it means new payment infrastructure and procedures. Existing payment systems (credit cards, mobile wallets) are deeply entrenched and convenient, so there is inertia and reluctance to switch

(4) Reversibility and fraud concerns. Stablecoin transactions, like cash, are typically irreversible; merchants worry about fraud and the inability to reverse charges, a feature credit cards provide. And for consumers, handling stablecoins often means managing a crypto wallet – which most find more complicated than swiping a card. Indeed, the user experience gap is significant: “most people are not clamoring for change if it’s more complicated than swiping a card.

To date, stablecoins’ real usage has been largely confined to crypto trading and as a dollar hedge in certain countries, rather than everyday retail payments. Even as technical progress is being made (for example, Circle’s new stablecoin interoperability protocols aim to make using stablecoins “invisible” to users), mainstream uptake awaits better integration.

The good news is that efforts are underway to bridge this gap – for instance, partnerships are enabling cash-to-crypto conversions at thousands of MoneyGram locations, making stablecoins accessible to unbanked people and directly linking cash with digital dollars. Such initiatives could reshape remittances and inclusion by blending stablecoins into familiar financial touchpoints. Still, until regulatory and UX barriers are addressed, stablecoins will remain a potential killer app that hasn’t fully delivered on mainstream use.

CBDCs were a big promises with small results

In response to cryptocurrency’s rise (and Libra/Diem’s brief ambition), central banks worldwide began exploring their own digital currencies. A CBDC is a digitized version of a nation’s fiat currency, issued by the central bank, often using some blockchain or distributed ledger technology. The motivations for CBDCs have ranged from modernizing payment systems and improving financial inclusion to preserving monetary sovereignty in the face of private crypto. By 2023, over 90 countries were researching or piloting CBDCs, with a handful of smaller nations (e.g. the Bahamas with Sand Dollar) fully launching one. Major economies saw CBDCs as a way to address inefficiencies (like the high cost of cross-border payments) and extend financial services, all under the guaranteed trust (“full faith and credit”) of the central bank.

CBDCs are often pitched as solutions to payment friction and financial exclusion. They could make domestic payments instantaneous and 24/7, and cut international transfer costs by bypassing intermediaries. CBDCs can also potentially support unbanked populations – for example, offering a digital wallet provided by the central bank to anyone with a phone, thus lowering the barrier to basic financial services. In theory, a well-designed CBDC combines the efficiency of crypto with the trust and stability of government money. Additionally, some governments viewed CBDCs as a defensive response to crypto: a way to provide the benefits of digital currency without relinquishing control of monetary policy or financial supervision

So far, CBDCs have failed to achieve mass usage. Many projects remain in the pilot phase, and even launched ones see minimal adoption. A striking example is Nigeria’s eNaira: a year after launch, only 0.5% of Nigerians were using it. This is despite Nigeria being a global leader in crypto adoption – tellingly, more than 50% of Nigerians have used decentralized cryptocurrencies, yet almost none actively use the CBDC.

The reasons mirror broader challenges:

(1) Poor user understanding. Nigerians reported confusion about what the eNaira is and how it differs from regular crypto. Many viewed it simply as a proxy for the troubled national currency, and given the government’s history of freezing bank accounts and restricting crypto, citizens lacked trust that the eNaira was in their interest

(2) Weak value proposition. People already had mobile banking apps and cash – the eNaira didn’t offer a clear improvement. Initial messaging targeted the unbanked and remittances, but was “mistargeted” according to experts. Without widespread merchant acceptance or significant advantages, there was little incentive for everyday use.

(3) Institutional friction. Local banks were reportedly uncooperative or lukewarm, perhaps seeing the CBDC as competition. Without banks and fintechs driving integration, the eNaira remained siloed.

(4) Policy contradictions. The government heavily promoted the eNaira while simultaneously cracking down on private crypto, sending mixed signals and arguably pushing people further toward Bitcoin and USDT as a form of protest or practical alternative.

Even the most advanced CBDC effort – China’s digital yuan (e-CNY) – shows the difficulties. China has reported 261 million e-CNY wallets opened and about $14 billion in transactions in large-scale pilots. This sounds impressive, but context matters: it’s still a small fraction of China’s population and economy, especially given aggressive government campaigns and integration into apps. Adoption so far is largely confined to limited trial regions and promotional use (e.g. government stimulus handouts in e-CNY). Crucially, China’s incredibly efficient existing digital payment networks (WeChat Pay and Alipay) mean users see little new benefit in switching to e-CNY. Indeed, the PBoC’s push might be more about long-term strategic control than solving an unmet consumer need. It highlights a broader point: currencies need trust and utility to gain traction. If a CBDC doesn’t clearly outshine the status quo, users won’t bother – especially if they fear new forms of surveillance or control. As one analysis noted, none of the top seven global reserve currencies have launched a CBDC yet, and many challenges – from interoperability to privacy – remain before mass adoption can occur

Blockchain gaming: play-to-earn boom and bust

The intersection of gaming and crypto – often dubbed GameFi – took off around 2021 with the rise of “play-to-earn” games. Early pioneers like CryptoKitties (2017) demonstrated that unique digital items (NFTs) could be owned and traded by players, hinting at a new gaming paradigm. By 2021, titles like Axie Infinity became sensationally popular, especially in developing countries, by allowing players to earn crypto tokens that had real market value. The allure was twofold: gamers could own their in-game assets (as NFTs that could be sold or transferred outside the game) and even make an income from playing. This promised to upend traditional gaming, where assets are locked to platforms and players generally pay (rather than get paid) for entertainment. Amid the COVID-19 pandemic economic woes, play-to-earn games offered a novel source of income for many, fueling a rapid surge in users and a flood of gaming tokens on the market. Game studios and investors jumped in, envisioning blockchain gaming as a major route to onboard millions of mainstream users who love games.

Blockchain gaming set out to solve several perceived problems in the gaming industry. For players: lack of true ownership and monetization. In traditional games, if a server shuts down, you lose your items, and there’s no way to sell or trade most digital goods (violating property rights, in the eyes of crypto proponents). GameFi’s answer was NFTs and tokens that belong to the players, enabling secondary markets and player-driven economies. It also aimed to reward players for their time and skill – essentially monetizing gameplay – which was attractive in regions with limited job opportunities. For creators and developers: blockchain could allow new funding models (selling NFTs to fund development) and new ways to incentivize communities. The grand vision was a play-to-earn economy where gamers, not just game companies, capture some financial upside of a game’s success.

Despite pockets of success, blockchain gaming as a whole has not broken into the gaming mainstream – in fact, it suffered a harsh downturn. By late 2022, analyses showed take-up of these games was still low, and mainstream adoption remained a long way off.

Several factors contributed:

(1) Gameplay vs. profit tradeoff. Many early blockchain games prioritized the earnings aspect over fun gameplay. Axie Infinity, for example, had relatively simple mechanics and depended on a constant inflow of new players to prop up its economy. This flawed economic design led to a collapse once growth stalled – the model was essentially unsustainable, more pyramid scheme than enduring game economy. When token prices fell, user numbers plummeted in tandem. This revealed that a majority of players were there purely for income, not for love of the game. Traditional gamers, on the other hand, showed outright hostility to the idea of NFTs in games, viewing them as cash-grabs by companies or pointless collectibles. Without genuinely enjoyable gameplay, crypto games couldn’t retain users.

(2) Technical and UX friction. Getting started with many GameFi titles was cumbersome – players often needed to install wallets, manage private keys, and even make an upfront investment (e.g. buying Axie NFTs to begin playing). This is a far cry from the plug-and-play ease of normal mobile or PC games. Every extra step – from acquiring crypto to signing transactions for in-game actions – added friction that deterred mainstream users.

(3) Security and stability issues. The sector also suffered public setbacks like the Ronin bridge hack of Axie Infinity, where over $600 million was stolen in 2022. Such incidents not only directly impacted players (funds lost, game economies destabilized) but also eroded trust in the idea of blockchain games.

(4) Lack of platform support and policy hurdles. Major app stores have been wary of NFT integrations, often imposing restrictions or fees that complicate blockchain-based apps. This limited the distribution of crypto games on the very mobile platforms where casual gaming thrives. Additionally, some games had to navigate securities laws if their tokens were deemed financial instruments, adding regulatory uncertainty.

Perhaps the biggest indictment of GameFi’s first generation was the stark usage statistics: at the peak of hype, Axie Infinity claimed millions of users, yet by late 2022, its daily active users had fallen dramatically (after peaking in Nov 2021). Other much-hyped metaverse platforms like Decentraland and The Sandbox reportedly had fewer than 1,000 regular active users each in 2022 despite multi-billion-dollar valuations. In short, outside of a speculative frenzy, engagement crashed. Blockchain gaming showed that simply adding tokens to a game isn’t enough – you must still build a game people genuinely want to play. The industry has taken this lesson to heart. As one report noted, the next era of crypto games will need to “sidestep the economic flaws while prioritizing fun”. Without that, crypto will not win over the mainstream gaming community, who care more about immersive experiences than about earning a few dollars in tokens.

DeFi: finance reinvented, but not for everyone

DeFi burst onto the scene in 2020 (“DeFi Summer”) as one of crypto’s most compelling use cases. It refers to a constellation of blockchain-based financial applications – exchanges, lending platforms, stablecoin issuers, derivatives markets, and more – that operate without traditional intermediaries. DeFi’s rise was driven by the success of early projects like MakerDAO (decentralized stablecoin lending) and Uniswap (automated token trading), which demonstrated that complex financial transactions could be executed by smart contracts in a permissionless manner. By late 2021, DeFi’s total value locked (TVL) hit a staggering $254 billion, growing 865% from 2020 to 2022. The movement promised a democratization of finance: anyone with an internet connection could access lending, borrowing, and trading services that were previously the domain of banks and brokers. This open, composable financial system was heralded as the future – a parallel economy that could bank the unbanked globally and offer more transparency and yield than traditional finance (TradFi).

DeFi aimed to tackle multiple pain points in legacy finance. It sought to remove high fees and gatekeepers – for example, letting users earn interest or get loans without needing a bank account or credit score, and without a bank taking a cut. The user problem in many regions is lack of access to banking, or poor terms (e.g. low deposit rates, predatory lending). DeFi’s answer: protocols like liquidity pools and algorithmic money markets that anyone can participate in. It also aimed to improve transparency and control. Traditional finance can be opaque; by contrast, DeFi transactions are on public blockchains, and users hold their assets in their own wallets. This self-custody and openness were meant to build trust and avoid the kind of hidden risks that led to the 2008 crisis. Additionally, DeFi promised innovation and inclusivity – new financial products (like yield farming or programmable insurance) that are open to all, potentially providing higher yields on savings and more efficient capital use through automation. In short, DeFi set out to empower individuals financially, especially those underserved by existing institutions, by leveraging smart contracts to provide faster, cheaper, and more inclusive services.

While DeFi achieved remarkable growth within the crypto community, it has barely penetrated the mainstream audience. A variety of technological, security, and user-experience issues have kept everyday users (and even many institutions) on the sidelines.

(1) Security breaches and lack of safety nets. The very openness of DeFi became its Achilles heel – hackers exploited smart contract bugs and other vulnerabilities to steal over $60 billion from DeFi platforms in recent years. Headlines of multimillion-dollar hacks occur regularly, eroding trust. Unlike bank accounts, there’s no FDIC insurance or often any recourse if funds are stolen. For a newcomer, the idea of putting significant money into these unaudited or experimental protocols is daunting.

(2) Complexity and poor UX. Using DeFi requires managing a crypto wallet, handling private keys, and understanding concepts like liquidity pools, yield farming, or slippage tolerance. The user interfaces are often complex and unintuitive, appealing to tech-savvy crypto enthusiasts but intimidating to non-technical users. One industry CEO admitted that much of DeFi still requires “a deep understanding of blockchain technology,” a technical barrier that “limits the potential user base”. The typical DeFi app experience – e.g. switching networks, signing transactions, calculating gas fees – is a far cry from the one-click simplicity people expect from fintech apps.

(3) Regulatory and compliance issues. Mainstream users and especially institutions are wary of the largely unregulated nature of DeFi. There is no KYC on many platforms, raising concerns about money laundering and legal liability. Without clear regulations, big players have mostly stayed out, and average users also lack the assurance that someone is monitoring for fraud or protecting their interests.

(4) Fragmentation and scalability problems. Early DeFi predominantly ran on Ethereum, which in 2020-21 became congested and expensive – transaction fees spiked to tens or hundreds of dollars, pricing out small users Although newer chains and Layer-2 networks have alleviated this, the DeFi ecosystem remains fragmented across different networks, requiring users to navigate bridging assets and varying interfaces – again, not a recipe for broad adoption.

Ultimately, DeFi did solve certain problems (like providing access to financial services in a wholly new way), but it often solved them in a manner suited for crypto natives rather than the general public. The absence of consumer protections, the ever-present risk of hacks or losing one’s keys, and the sheer complexity mean that for most people, the traditional financial system feels safer and easier. Tellingly, even those intrigued by crypto often choose the comfort of centralized platforms – e.g. buying a Bitcoin ETF via their brokerage instead of using a DeFi app. This highlights a critical lesson: to cross the chasm, DeFi must confront its trust and usability deficits head-on. Efforts are underway, such as “CeDeFi” (centralized-decentralized finance) hybrids that combine the innovation of DeFi with more user-friendly, regulated interfaces. Additionally, integrating real-world assets (RWA) into DeFi is creating more stable yields and use cases – the RWA sector reached over $5.7 billion in TVL by late 2023 as tokenized cash, treasuries, and other assets entered DeFi. These moves could attract mainstream users with more familiar and lower-risk offerings. But without significantly better user experiences and security, DeFi will remain powerful but predominantly in the hands of a niche user base.

SocialFi: tokenizing social media and its engagement dilemma

SocialFi refers to the fusion of social networking and crypto finance features – essentially, platforms where users can create, share, and monetize content with blockchain-based rewards or ownership. Early examples include Steemit (a blogging platform rewarding posts with crypto) and BitClout/DeSo (which let users invest in personal creator tokens). The concept gained renewed attention in 2021-2022 as part of the Web3 wave: proponents argued that decentralized social networks could give users control over their data, free them from Big Tech censorship, and align network growth with user rewards via tokens. The excitement built as new projects (e.g. Aave’s Lens Protocol for decentralized social graphs, or the invite-only friend.tech app for tokenizing social connections) launched with much fanfare. For a moment, SocialFi was hailed as the “next big thing” – the idea that by blending DeFi elements (like tokens and yield) with the stickiness of social media, crypto could finally engage a massive user base that cared less about finance and more about community.

SocialFi set out to address several issues inherent in Web2 social platforms. A primary goal was to empower content creators and users economically. Instead of traditional models where the platform owners reap most of the financial rewards (through advertising or data sales), SocialFi platforms reward users directly for their content creation, curation, or engagement via tokens. This was supposed to solve the problem of creators struggling to monetize and active community members getting no stake in the networks they help build. Another aim was user ownership of identity and content – by using NFTs or decentralized identities, users could truly own their profile, social connections, and posts, porting them between apps if they wished, thus solving the lock-in and censorship problem. Additionally, SocialFi experiments tried novel models of social capital, such as letting supporters invest in a person’s token (betting on their popularity) or participate in governance decisions of the network. The user problem being addressed was dissatisfaction with Web2’s lack of privacy, arbitrary demonetization, and one-sided control. In theory, a well-designed SocialFi platform would give users a financial upside and governance voice in the networks they contribute to daily.

In reality, most SocialFi ventures thus far have flamed out or stagnated. They attracted bursts of crypto insiders but failed to retain mainstream social media users.

Key reasons were:

(1) Speculation over substance. Many SocialFi platforms launched with a token and hype, but not a fundamentally better social experience. Users came for FOMO-driven airdrops or quick gains – for example, friend.tech saw a surge via an airdrop and novelty in tokenizing Twitter personalities, but activity nosedived once the initial excitement faded. When the rewards dried up, users had little reason to stay, revealing that the model was unsustainable.

(2) Poor user experience vs. established platforms. Crypto social apps often require managing wallets, paying gas for actions like posting or following (even if costs are low, the mental overhead is there). They also usually lack the polish, speed, and network effect of incumbents like Twitter, Reddit, or TikTok. A social network’s value is largely in who’s there and how easy it is to use – and migrating people away from familiar platforms is extremely hard unless the new platform is 10x better. SocialFi did not offer a 10x better social experience; in some cases it was worse (slower, clunkier, full of bot-like engagement seeking token rewards).

(3) Token incentives misaligning the community. While the goal was to reward good content, in practice tokenized social often incentivized spam and low-quality engagement. For instance, if users earn tokens for posting or liking, it encourages quantity over quality. Some early token-based social sites saw an influx of posts and comments aimed purely at gaming rewards rather than genuine interaction. This degrades the user experience for anyone seeking real community or content.

(4) Difficulty achieving sustainable economics. Just like play-to-earn games, social-to-earn faces the problem: who ultimately pays for the token rewards? Many SocialFi projects used inflationary token emissions (printing tokens as user rewards), which works in hype phase but becomes unsustainable economically and environmentally (if on chain) long term. Without a solid revenue model beyond token speculation, these platforms couldn’t maintain value for users.

As a result, after an initial boom, user engagement on SocialFi platforms sharply declined. Major projects that once touted millions of signups, like Lens Protocol, saw new user registrations fall off a cliff after the hype – at one point down to just a few hundred new accounts in a month. The token values associated with these platforms also cratered (Lens profile NFTs that were once valued at $200 fell below $1, indicating the market lost faith in their growth. The broader social media audience largely ignored these apps – they were used mostly by crypto enthusiasts among themselves. Even where there was initial traction, as in friend.tech, decisions like prematurely “decentralizing” or stopping development updates led to stagnation and an exodus of users. The lesson learned is that simply copying the Web2 social model onto a blockchain with tokens doesn’t create a compelling product. To truly challenge mainstream platforms, decentralized social apps will need to offer unique value or experiences beyond token speculation. They must achieve network effects through genuine user utility (e.g. better privacy, freedom, or novel interactions) and not just financial gimmicks. Until then, SocialFi remains an intriguing concept that has yet to find a sustainable formula or killer app to pull in everyday Facebook or Twitter users.

Crypto x AI is another futuristic pairing that remains nascent

In the last couple of years, two of tech’s hottest trends – cryptocurrency and artificial intelligence – have increasingly been mentioned in the same breath. The surge of interest in AI (especially after OpenAI’s ChatGPT went viral in late 2022) led many in the crypto industry to position their projects as part of this convergence. A wave of “AI tokens” hit the market in early 2023, with projects like SingularityNET (a decentralized AI marketplace), Fetch.ai, Ocean Protocol (data exchange for AI), and others seeing speculative investment. In fact, by March 2024, the combined market cap of AI-related crypto tokens had reached about $51 billion (up explosively from only ~$2B a year before). This narrative was reminiscent of past crypto hype cycles – much like “DeFi summer” or the NFT boom, AI became the buzzword du jour driving rallies in certain altcoins. Conceptually, the idea was that blockchain could support the AI boom by providing decentralized data sourcing, transparent model governance, and new incentive models for AI development. Crypto pundits suggested blockchains might even become critical infrastructure for AI agents to transact and verify information in the future.

The combination of AI and crypto is still amorphous, but generally the use cases touted include: decentralized AI marketplaces (solving the problem of AI development being dominated by big tech silos – instead allowing anyone to offer or consume AI services peer-to-peer, with tokens facilitating the exchange of algorithms and data), data provenance and integrity (using blockchain’s immutability to ensure AI models are trained on verified data and that outputs can be audited, addressing trust issues in AI decisions), and reward mechanisms for data contributors (so individuals could get paid if their data helps improve an AI model, instead of data being harvested for free). Another angle is autonomous AI agents with crypto wallets – envisioning swarms of AI programs that can perform tasks and pay each other in cryptocurrency, coordinating via smart contracts. This could, in theory, solve coordination problems and create an economy of AIs serving humans and each other, where blockchain provides the settlement layer. In summary, the problem space is about making AI development more open, trustworthy, and collaborative by leveraging decentralization, as well as financializing AI resources (compute, models, data) so they can be traded like digital assets.

Despite big talk, the intersection of AI and crypto has so far been driven more by hype than by real adoption. The dramatic price spikes in AI tokens were largely sentiment-driven speculation rather than usage – traders bet on “AI” as the next trend, often without clear evidence of product-market fit. From a mainstream perspective, the actual applications are very immature. For example, decentralized AI marketplaces have few active customers relative to centralized AI APIs from companies like OpenAI or Google. The value propositions, while intellectually interesting, haven’t yet been translated into consumer-facing products that solve an immediate need. If a developer wants an AI service, it’s still far easier to use a centralized cloud AI API than to navigate a token marketplace. Integration friction and unclear demand have limited these projects. Moreover, many touted AI+blockchain ideas are solutions in search of a problem: average users and businesses don’t yet see why they need a crypto element for their AI. They just want accurate, safe AI outputs, which current centralized systems often provide without the complexity of tokens or decentralization.

Another challenge is that both AI and blockchain are complex technologies; combining them doubles the complexity. This can result in projects that are difficult for outsiders to even understand, let alone use. Regulatory uncertainty also looms – the use of tokens in AI platforms could attract securities scrutiny, and the idea of autonomous AI agents spending money raises legal questions. So far, no “killer app” has emerged from the AI-crypto crossover that would drive mainstream users to Web3. In contrast, AI itself has achieved mainstream adoption (hundreds of millions use ChatGPT, Midjourney, etc.), but that wave largely bypassed blockchain. People didn’t need crypto to access AI’s benefits. The crypto industry’s task is to identify where decentralization truly enhances AI-driven products in a way that normal users value. Until then, “AI coins” will likely remain a speculative niche. That said, the long-term vision is intriguing: if AI systems become ubiquitous and require trust, identity, and micro-payments, blockchain could play a vital role. But tangible mainstream impacts (e.g. a popular app where users interact with AI and crypto seamlessly) are still on the horizon, not here today. In short, the potential is there, but the execution and real-world traction are not – yet.

We see common patterns across all the above use cases

Reviewing these use cases’ trajectories, a pattern emerges: crypto builders often underestimated the real-world frictionsand overestimated the mass appeal of their innovations. Several key gaps have historically impeded mainstream adoption:

Crypto’s culture of decentralization came with a trade-off: a lack of the safety nets that mainstream users expect. Scams, hacks, and collapses (from Mt. Gox to FTX, Terra and numerous DeFi exploits) have created a trust deficit that can’t be fixed by technology alone. Users hear of billions lost to hacks each year and understandably hesitate. Unlike traditional finance, where deposits are insured and fraud protections are standard, crypto often offers “no refunds” and requires total self-reliance. This has burned many early adopters and scared away others. Builders historically focused on technical trust (cryptographic security) but missed the importance of user trust in platforms, brands, and processes. As one expert put it, bridging to mainstream “requires addressing a fundamental trust deficit,” making new, non-technical users feel secure and supported. When even crypto-friendly folks prefer to buy ETFs in their brokerage rather than use a crypto exchange, it’s a clear sign that familiarity and trust trump novelty. Crypto projects have missed opportunities to build trust via better customer protection, transparency, and communication.

Time and again, crypto products have been designed by and for technical people, resulting in complex interfaces and jargon that alienate newcomers. The industry has often prioritized innovation over usability, assuming people will learn the ropes. In reality, confusing wallets, seed phrases, gas fees, and crypto-speak (TVL, APYs, AMMs, etc.) “overwhelm new users” and sabotage the customer experience. Simple tasks like recovering an account or contacting support are often nonexistent. The lack of human-friendly design – from cluttered interfaces to processes that lack guidance – has been a critical mistake. As Brian Breslin of TELUS Digital observes, crypto’s heavy use of insider jargon and English-centric terminology poses a huge barrier in a global context. The onboarding process in particular has been a pain point: roughly 63% of customers abandon financial apps during signup/KYC if it’s too cumbersome. Many crypto apps fall into this trap with lengthy, unintuitive setup or no guidance through the unfamiliar steps of using a wallet. Builders historically undervalued UX, but it’s key: familiarity breeds trust, complexity breeds doubt. The success of any mainstream tech (think of smartphones or the internet) hinged on abstracting away technical details – crypto is no different. Lack of focus here is a major gap.

For crypto to be useful in everyday life, it must plug into the world’s existing systems – financial rails, commerce, identification, mobile platforms. Historically, these bridges were weak. Until recently, fiat on-ramps/off-ramps were limited and clunky, making it hard for average users to even get started with crypto or cash out. Payment terminals don’t accept crypto, and e-commerce sites rarely have a crypto option. In essence, the crypto ecosystem often grew in a parallel silo, serving itself (e.g. DeFi traders, NFT collectors) rather than integrating with real-world use. This lack of integration meant that even if a person held some crypto, they couldn’t easily use it for practical purposes like paying bills or buying groceries. Similarly, identity and compliance infrastructure lagged – verifying user identities, ensuring regulatory compliance, and preventing illicit use are all necessary for mainstream institutions to get on board, but the crypto community was initially averse to these, slowing institutional bridges. Only now are we seeing more robust compliance solutions, travel rule integration, and so forth. The absence of strong interoperability standards is another gap – dozens of blockchains that don’t talk to each other seamlessly made the user experience fragmented. In short, crypto builders sometimes built for an ideal decentralized future without fully accounting for the present realities of legacy infrastructure and the need to connect with it.

Perhaps the biggest meta-mistake has been chasing hype cycles instead of consistently solving real user problems. The industry has a penchant for trendy narratives (ICO mania, DeFi yields, NFTs, metaverse, AI, etc.), which has led to misaligned incentives. Developers and founders were often rewarded for rapid token price appreciation or user growth at any cost – not for sustainable product-market fit. This resulted in a flood of copycat projects and unsustainable models (like play-to-earn schemes or Ponzi-like yield farms) that attracted short-term speculators, not lasting users. Each hype cycle brought in a wave of users who mostly left when token prices dropped, without broader adoption sticking. Meanwhile, truly pressing needs (like easy, low-cost remittances or simple secure savings tools for emerging markets) received comparatively less attention because they might be “less sexy” or immediately profitable. As a consequence, crypto missed chances to quietly penetrate everyday use cases that matter. For example, while billions were poured into yet another algorithmic stablecoin or NFT collectible, relatively fewer resources went into improving wallet recovery for normal folks or building products for the unbanked farmer or shopkeeper. Misaligned incentives also appeared in token-centric community governance, where often the loudest speculators influence roadmaps rather than actual user feedback, leading projects astray from delivering real utility.

Refocusing on actual use cases to onboard the next millions

Despite the setbacks, crypto’s story isn’t doomed to remain niche. By concentrating on real-world needs and embracing a user-centric approach, the industry can unlock use cases with genuine mass-market appeal. Below we outline core, actionable use cases with high potential to bring millions of new users into crypto and Web3, along with tactical opportunities for builders and founders in each area:

1. Cross-border payments and remittances – crypto as the global money rail

One of the clearest real-world use cases for crypto is in sending money across borders. The demand is enormous – the global remittance market is about $630 billion a yearc – and current solutions are costly and slow. The average fee to send money internationally is ~6%, meaning migrants lose significant sums (the UN has a goal to reduce this to 3% by 2030). Transfers can take days through banks or services like Western Union. Crypto, especially stablecoins, can slash fees and time. Transactions costing a fraction of a percent and settling within minutes are already possible on efficient blockchains. This directly translates to more money in the hands of families and faster relief in emergencies.

Remittances are a lifeline for ~800 million people (1 in 10 globally receive funds from abroad). Even marginal improvements in cost or speed have profound impact on everyday life – from paying for education to dealing with medical bills. Crypto can provide near-instant, low-cost transfers without needing a bank account, which is game-changing for the unbanked. There’s evidence of organic adoption: for instance, Binance’s zero-fee remittance service processed $26B in transfers (2022-24) and saved users an estimated $1.7B in fees. This shows when offered a convenient service, people will use it.

To capitalize on this, builders should focus on user-friendly, compliant payment apps and networks. Key actions include:

Integrating stablecoin wallets into mobile money and existing remittance outlets, so users can deposit cash and have it converted to, say, USDC, sent abroad, and cashed out by the recipient easily. The CompoSecure–MoneyGram partnership is a template, enabling cash-to-crypto at thousands of locations – more such integrations can bridge the physical/digital divide.
Working with regulators to obtain necessary licenses (e.g. as payment providers or electronic money issuers) so that these services operate within legal frameworks, building trust with users and governments.
Emphasizing simplicity: abstract away blockchain jargon entirely. The user experience should be akin to using any money transfer app – phone contacts, not long addresses; amounts in local currency terms; and clear fee and FX information.
Target high-friction corridors (such as US to Latin America, Europe to Africa, Gulf to South Asia) where existing fees are exorbitant. Partner with local payout agents or banks to facilitate last-mile distribution.
Leverage Lightning Network (for Bitcoin) or efficient Layer-2s for stablecoins to ensure negligible fees at scale.

2. Stable value and savings in inflation-prone economies

In countries battling high inflation or currency instability, crypto (particularly dollar-pegged stablecoins) offers a lifeline to preserve value. We’ve already seen people in places like Argentina, Turkey, Venezuela, Nigeria, and Lebanon turn to stablecoins or Bitcoin as quasi savings accounts or for everyday commerce when their local currencies are rapidly devaluing. For example, Turkey’s inflation exceeded 50% and Argentina’s over 100% in 2023, driving an explosion in crypto usage – Turkey led the world with 27% of its population owning digital currencies, and Argentina was close behind at 23%, far above the global average. Much of this adoption was specifically safe-haven buying of USD stablecoins like USDT and USDC to escape currency collapse. This is a real need that crypto is uniquely positioned to meet: giving anyone with internet access the ability to hold a stable currency (or hard asset like BTC) without permission, especially when their government fails to provide a stable monetary environment.

The potential market is huge – over a billion people live in countries with double- or triple-digit inflation or strict capital controls. These individuals have a pressing need to protect their earnings and savings. In the absence of easy access to foreign bank accounts or USD cash, crypto becomes the de facto option. We’ve seen evidence: stablecoin volumes surge whenever local currencies plunge. In Argentina, stablecoins are so popular that they reportedly account for 60%+ of all crypto transactions in the country. Nigeria similarly saw a crypto boom as the naira weakened. Crypto also enables circumventing capital controls legally or semi-legally – for instance, people can convert to stablecoins and move value out to safer jurisdictions. This “digital dollarization” can onboard users out of sheer necessity.

To serve this use case, crypto companies should:

Double down on localized stablecoin on-ramps and off-ramps. Work with fintechs and money changers in high-inflation countries to make converting local cash to stablecoins (and vice versa) quick and frictionless. For example, partnerships with mobile payment providers in Latin America or Africa can allow users to swap e-money or airtime for USDC in-app.
Ensure education and communications emphasize the stability and backing of major stablecoins. Many users ask: “Is this real USD? Can I trust it?” Providing transparency (attestations of reserves, simple explanations of how to redeem) is crucial to building confidence, especially post-Terra.
Optimize apps for low-end Android devices and low-bandwidth connections, since many users in these markets have basic smartphones. Also, integrate multi-language support and reduce jargon – call a stablecoin “digital dollar savings” if needed.
Build in features that address local needs: e.g. an option to easily dollarize one’s salary (if paid in volatile local currency) by converting to stablecoin, or merchant tools that auto-convert incoming crypto to local currency for vendors who need to restock in fiat.
Navigate regulations carefully: some governments frown on dollarization. However, many have not outright banned crypto. Builders might engage with regulators to clarify that these tools help people and can be monitored for AML compliance. In some cases, working with licensed financial institutions (for custody or issuance of a local currency stable token) could be a path.

3. Inclusive finance and credit: banking the unbanked 2.0

There are still about 1.4 billion unbanked adults – people with no access to basic financial services. Even among the banked, hundreds of millions have limited access to credit or face high fees and bureaucracy for simple transactions. Crypto can offer an on-ramp to financial inclusion by turning a smartphone into a bank. Think of a world where anyone can download a wallet app and immediately have a secure account to store value, earn yield, and borrow against assets, without needing formal paperwork or a local bank branch. This is not just theoretical – in regions like sub-Saharan Africa and Southeast Asia, mobile money leapfrogged traditional banking. Crypto can be the next leap, providing more capabilities (global transfers, savings in strong currencies, micro-investments) on those mobile rails.

Empowering the unbanked is both a social good and a vast market opportunity. These populations often rely on informal cash networks that are risky and costly. By offering a digital alternative, crypto can integrate them into the global economy. For instance, small entrepreneurs could access micro-loans via decentralized lending platforms if they can collateralize some assets or reputation on-chain – something local banks might never offer them. Additionally, in many developing markets, youth demographics are high and smartphone penetration is growing. Younger, tech-savvy users are more open to trying new financial apps, especially if those apps solve problems like receiving international payments or earning higher interest on savings. Crypto yields (when not purely speculative) can outpace the near-zero interest many get, and tokenized assets could let them invest in things previously out of reach (like buying $10 of a U.S. Treasury via a token).

To seize this use case, focus on simplified, mobile-first financial apps that abstract crypto complexity.

Implement account abstraction and social logins so users don’t have to manage private keys or remember seed phrases. Projects are already doing this (e.g. wallets that use phone/email for recovery via multi-party computation). This is crucial for non-technical users.
Offer stable, low-risk savings products. For example, a wallet that gives users 5% APY on a digital dollar (sourced from reliable DeFi lending or RWA yields) could be very attractive where bank accounts give 0% or where people resort to keeping cash under the mattress. But it must be presented in an understandable, safe-feeling way (perhaps with an element of insurance or reserve backing clearly shown).
Enable micro-transactions and micro-earnings. One interesting model is allowing users to earn small crypto rewards for useful actions (similar to how some telecoms reward airtime for watching ads, etc.). Some crypto projects reward learning (earn tokens for completing educational modules) or contributions. Such programs could onboard users with initial funds that they can then use or grow. It also familiarizes them with crypto gradually.
Build or integrate identity and credit scoring solutions. For credit, decentralized identity (DID) could allow users to build a reputation (e.g. a history of on-time repayments in a lending dApp, or attestations from community leaders). This could unlock unsecured or under-collateralized lending – crucial for truly extending credit access. Partnering with NGOs or microfinance networks to use crypto rails for loan distribution and tracking could also be powerful.
Address fees and scalability. Often the people who could benefit most can afford high fees the least. Ensure the solutions use low-cost chains or subsidize fees – possibly via local sponsors or using L2 networks.

4. Real-world Asset tokenization: bringing traditional value onchain

Tokenizing real-world assets (RWAs) – such as fiat cash, government bonds, real estate, commodities, or invoices – and bringing them onto blockchains is an emerging use case with massive potential. It can onboard users who are less interested in crypto speculation and more in practical investment and finance opportunities. For example, an average person might not care about yield farming obscure tokens, but they would care if they could buy a token representing a fraction of a rental property or a bundle of blue-chip stocks, or earn yield from a tokenized U.S. Treasury bond. Tokenization can lower entry barriers (fractional ownership, 24/7 markets, global access) and increase liquidity in traditionally illiquid markets. It also appeals to institutions – in fact, we see major financial players like Visa, Mastercard, and JPMorgan piloting tokenized deposits and treasury bonds on blockchains, indicating that integration of traditional finance with crypto rails is underway. By focusing on RWAs, crypto can attract users who are interested in real assets and stable returns, not just native crypto assets.

The total addressable market is enormous – essentially the entire $900+ trillion in global assets. Capturing even a tiny slice on-chain can drive adoption. Already, tokenized dollars (stablecoins) are a clear success in crypto. The next step is tokenized everything else. This has several advantages: stability and familiarity – people trust a token more if it’s backed by something tangible/regulated (like real dollars or government bonds). It feels less like magic internet money and more like a convenient wrapper around a known asset. Diversification and inclusion – someone in a developing country could, with a $50 stablecoin and a DeFi app, invest in a fund of U.S. stocks via tokens, which might be impossible otherwise due to local capital controls or minimum investment sizes. Likewise, small businesses could get financing by tokenizing invoices and selling them to global liquidity pools, accessing funding beyond their local banks. These real-world use cases demonstrate direct utility, not just speculative value. In fact, by late 2023, RWAs had quietly grown to be one of the largest sectors in DeFi by collateral, over $5.7B in TVL, showing that even in a bear market, there’s demand for asset-backed crypto products that generate steady yield (often from real-world interest or revenue streams).

Pushing RWA tokenization forward involves a few things -

Compliance-first approach. When dealing with regulated assets (securities, etc.), navigating securities laws and investor protections is critical. Partner with traditional institutions (banks, brokers, asset managers) to issue tokens in a legally compliant way (e.g. Reg D/Reg S offerings, or using security token frameworks where needed). This might not be fully decentralized, but it’s a bridge that can bring trust and users.
Infrastructure for custody and auditing. Ensure that for every token created, the underlying asset is safely custodied and regularly audited by reputable firms. This transparency is key to winning user trust – much like how stablecoin issuers publish attestations. Using on-chain proof-of-reserves or even programmatic settlement (like automatically reconciling token supply with real asset balances) can bolster confidence.
User-facing portals that simplify access. For instance, a straightforward app that allows users to swap a stablecoin into a “tokenized yield” product (like a basket of bonds) and back at any time, with clear info on returns and risks. Think of it as a decentralized “savings account” interface, where behind the scenes the funds go into a yield-bearing RWA protocol. By abstracting the complexity (multiple steps, wallet switching, etc.), more users can participate.
Global distribution and education. If you tokenize, say, real estate, make sure to educate the target demographic (maybe expat communities who want to invest back home, or young investors priced out of housing) about how they can now buy $100 worth of a property via tokens. Work with influencers or financial advisors in various countries to demystify these offerings.
Leverage DeFi composability. Once RWAs are on-chain, integrate them into existing DeFi ecosystems to amplify utility – e.g. allow a tokenized bond to be used as collateral on lending platforms, or a tokenized property to be traded in a secondary market DEX. This creates more liquidity and usefulness, attracting both retail and institutional players to participate since it adds value beyond what’s possible off-chain.

5. User-centric web3 apps where fun/utility comes first

Finally, it’s important to not abandon the consumer apps that first excited many – gaming, social, creator economies – but to reinvent them with a user-first mindset. The next wave of Web3 games and social platforms, built on lessons learned, could onboard millions if they offer compelling experiences that just happen to be enhanced by blockchain. The opportunity is to make the blockchain aspect invisible and the user benefits clear. For gaming, that means games that are fun and competitive with top traditional titles, where digital ownership is a bonus rather than the sole attraction. For social/creator platforms, that means products where users genuinely connect or consume content, with crypto quietly enabling things like censorship-resistance, direct fan ownership of content, or portable digital goods.

Entertainment and social connectivity are universal human interests. The total addressable user base for games is over 3 billion, and for social media over 4 billion. If even a small fraction of that can be tapped via a breakout Web3 app, that’s tens of millions of new crypto users. The key is those users won’t sign up for the sake of crypto– they will join because the app is enjoyable or useful. We’re already seeing some green shoots: for example, Reddit’s introduction of blockchain-based collectible avatars (NFTs) was framed purely in terms of user enjoyment and status, not crypto – and it led to millions of users obtaining wallets often without realizing it (Reddit abstracted the custodial wallet creation) because they valued the avatar. Similarly, NBA Top Shot got many sports fans collecting NFT moments because it felt like a natural digital extension of sports memorabilia. These cases worked by focusing on fandom and fun, with the blockchain aspect under the hood. If future games can do the same – e.g. a hit game where players truly own some items that have resale value, but the game is free-to-play and fun enough to attract millions of gameplay merits – then mainstream adoption can happen without people even noticing the tech.

Here is what we should focus on while building these apps:

Lead with content and community, not tokens. If you’re building a game, invest in top-notch game design, graphics, and storytelling. The crypto features (NFT items, token rewards) should be secondary and optional. The game should be enjoyable even if a player never touches the marketplace. Some studios are now focusing on “Web2.5” models – basically game first, crypto optional. That approach should be standard.
Invisible wallets and fiat onboarding. Use solutions that create wallets behind the scenes when a user signs up with just an email or social login. Let people purchase NFTs or tokens with a credit card or in-app purchase. They shouldn’t need to already own crypto to get started. Only introduce the full self-custody if/when they are ready and want to take assets out. This reduces initial friction massively.
Community-driven growth without speculative hype. For social platforms, instead of promising users they’ll make money, promise (and deliver) a space where they have more control or better engagement. For instance, a decentralized Twitter alternative should focus on features like user governance (no sudden bans without recourse), or allowing creators to own their follower list, or innovative ways for fans to support creators (tipping, NFT membership passes) that add value to the social experience. Emphasize freedom, ownership, and privacy rather than “earn X tokens for posting”. The latter attracts mercenaries; the former can attract genuine communities (e.g. think of how Signal or Telegram grew because people wanted privacy – not because they were paid to use it).
Progressive decentralization. Don’t sacrifice usability on the altar of purity from day one. It’s okay to start more centralized (running on a fast database, controlling some aspects) if it means delivering a smooth user experience, and then progressively decentralize components as the tech and community matures. The failure of friend.tech shows that fully renouncing control too early can kill a project’s evolution. Instead, maintain the ability to iterate and improve the product quickly in early stages. Mainstream users care that the app works well – they won’t complain if not every piece is on-chain.
Leverage existing distribution channels. To reach millions, go where they are. That means working within app store guidelines (even if it’s tricky with NFTs, find creative solutions or compromises). It means partnering with popular IPs or brands to create Web3 experiences (people will come for a beloved brand or influencer). It also means performance marketing in regions where users are, not just Crypto Twitter. Essentially, treat a Web3 app like any consumer app: growth hacking, user acquisition, A/B testing onboarding flows – all the traditional tactics need to be applied.

For the builders, developers, and founders reading: the call to action is clear. Prioritize real-world impact over hype. If you solve a pain point for users, adoption will follow. Keep an eye on metrics that matter (retention, satisfaction, transaction volumes in emerging markets) rather than just TVL or token price. Continue to improve UX and communicate transparently to earn user trust – these “soft” aspects are as important as hard code. And be ready to work within (or alongside) regulatory frameworks to connect crypto to the wider world.

Diksha .