Consumer application issues

Author: Thejaswini M A

Compiled by: Block unicorn

Introduction

We have tried everything.

NFTs were supposed to attract creators. Web3 games promised to bring blockchain to the masses. Social protocols like Farcaster and Lens promised a decentralized future for digital communities. Zora aims to prove that content can become a financial asset. Friend.tech turned social capital into something that can actually be traded. Meme coins—well, no one claims they are building civilization, but there are always those who say they will bring the next wave of retail investors.

NFTs were originally intended to attract creative talent. Web3 games promised to bring blockchain to the masses. Social protocols like Farcaster and Lens heralded a decentralized future for digital communities. Zora aims to prove that content can become a financial asset. Friend.tech made social capital truly tradable. As for meme coins—while no one claims they can create civilization, there are always those who say they will bring the next wave of retail investors.

Additionally, there are prediction markets. Polymarket may be the closest we have come to a real breakthrough product, but its peak coincided with the U.S. election cycle, and the unresolved question today is whether it can maintain user activity as the stakes decrease. There is also a very uncomfortable truth that no one wants to admit: the platform's accuracy partly stems from users trading based on real information. This is a tricky issue for regulators and ordinary users alike.

So here we are in March 2026. Bitcoin has been heavily institutionalized (let's not get into the specifics). Stablecoins have been standardized overnight by the GENIUS Act. The infrastructure is more mature than ever. If you open the App Store and filter by the "Finance" category, the top cryptocurrency apps are Coinbase, Kraken, and Crypto.com. These are all trading platforms. They have been operating for a decade. Truly groundbreaking consumer applications are still absent.

Why?

Why Haven't We Reached Our Goals?

The development of the crypto industry follows extreme bull and bear cycles. Most innovations only become known during crashes. The public often associates cryptocurrencies with chaos. When Bitcoin crashes, people say, "I told you so." They do not understand how it works. But we cannot blame them for that. After all, the signal-to-noise ratio in cryptocurrency is terrible.

Cryptocurrency was never designed for the masses. Developers focused on their ideological paths—decentralization, censorship resistance, and autonomy—and expected the public to gradually accept it. But the public never asked for these things. What they want are faster payment speeds, higher savings rates, and more convenient international remittances. However, what cryptocurrency offers are seed phrases, gas fees, and declarations to disrupt the existing financial system.

Meanwhile, the world outside of cryptocurrency has undergone tremendous changes. Artificial intelligence (AI) has dominated public opinion. ChatGPT attracted 100 million users in just two months. People who had never heard of Transformers suddenly use AI every day. Cryptocurrency has not experienced a similar explosion. This technology, once seen as the next generation of the internet, has ultimately been overshadowed by technologies that genuinely feel like the next generation of the internet.

A crisis of trust followed, and macroeconomic turmoil became the norm. Within the cryptocurrency space, a series of scandals continually validated the skeptics' concerns. Do Kwon and Terra Luna, Three Arrows Capital, Celsius, FTX... every few months, a "reputable" cryptocurrency company is exposed for a broken funding chain or misuse of customer funds. Regulatory responses, such as "Operation Choke Point 2.0," and the SEC's focus solely on enforcement have pushed legitimate projects overseas while leaving real scammers unscathed, exacerbating the situation.

Another very important issue is that user experience still does not meet consumer-grade standards.

Comparing the user experience of crypto social apps with Instagram: on Instagram, you download the app, register with your phone number, and log in. Content is immediately visible. It is intuitive and easy to use, with no learning curve.

Now, let's compare that with Farcaster or Lens. First, you need a wallet. Write down a 12-word seed phrase on paper and keep it safe. If you lose the wallet, everything disappears forever, and there is no customer service to contact.

Then, you need ETH to pay gas fees to create your profile. You must understand what gas is, why it fluctuates, and why the same operation sometimes costs $5 and other times $50. Connect your wallet, approve transactions, sign messages you don’t understand, and pray you don’t click on a phishing site. Only after completing all these steps can you start using social features, which still lack algorithmic recommendations, creation tools, and network effects—elements that make Instagram appealing.

Alternatively, you can think of setting up an e-wallet like opening Cash App: download, enter your phone number, link your bank account, and you’re done. Three steps, five minutes.

What about a crypto wallet? You have to choose from dozens of options (MetaMask, Phantom, Coinbase Wallet), download the wallet, generate a seed phrase, write it down, store it securely, understand the difference between Layer 1 and Layer 2, fund it with cryptocurrency from an exchange (which requires KYC and bank transfers), and then learn how to manage gas fees, approve token permissions, and avoid various scams.

For most people, this is a wall.

The friction is immense, but developers are oblivious. The entire closed loop—who is responsible for development, who tests, who provides feedback, who invests—is highly insular. When your test users all have MetaMask installed and understand gas fees, you won’t feel the friction that prevents ordinary users from adopting MetaMask. It’s like asking fish to notice water.

The graveyard is quite enlightening.

The graveyard is very thought-provoking.

Friend.tech attempted to financialize social relationships. Its business model was to buy and sell "keys" to access private chats with cryptocurrency opinion leaders. The platform generated $90 million in trading volume at its peak, then plummeted to $7.1 million daily, and ultimately the developers abandoned the project. The problem was not the technology itself, but that no one truly wanted their social graph to become a financial instrument.

Farcaster raised $150 million from a16z to build decentralized social media. The founder was a co-founder of Coinbase and had real technical prowess. Daily active users briefly reached 100,000, then plummeted to 4,360 active users. Monthly revenue also fell to $10,000. The founder eventually left Farcaster to create a stablecoin company. The issue was that no one cared whether this "Twitter alternative" they launched was truly decentralized.

During the COVID-19 pandemic, Axie Infinity established a complete parallel economy in the Philippines. Players earned above-minimum wage income by breeding digital creatures. Later, the token economy collapsed, and everyone stopped playing. The problem was not the game mechanics, but that unless people desperately needed money, no one wanted to play a game that felt like a job.

Who is Actually Doing This?

The companies closest to achieving consumer success are financial platforms that integrate cryptocurrency channels.

Coinbase

Coinbase is building what CEO Brian Armstrong calls the "everything exchange." In his 2026 roadmap, this is listed as the company's top priority—integrating cryptocurrency, stocks, prediction markets, and commodities, covering spot, futures, and options trading.

The products they have launched include:

Stock trading. Zero-commission stock trading. Crypto trading available 24/7, five days a week, all within the same app. Their marketing focus is not "come learn about blockchain," but "trade everything in one place."

Prediction markets integrated through Kalshi. You can bet on elections, Federal Reserve decisions, and sports outcomes without leaving Coinbase. The cryptocurrency portion is fully transparent.

Perpetual futures for international users. Lending features support borrowing up to $5 million collateralized by Bitcoin (BTC) and up to $1 million collateralized by Ethereum (ETH). Additionally, token-level sales will be launched, allowing retail users to purchase tokens before they are listed using USDC.

Brands can create their own branded stablecoins backed by USDC. Stablecoin payment functionality has been embedded in Shopify, with Checkout.com and PPRO set to launch in 2026. UK savings accounts offer a 3.75% annual interest rate, protected by FSCS. They are applying for national trust charters, which will grant them greater banking powers.

Coinbase is building the infrastructure to help everyone access blockchain. This includes not only a super app for its users but, more importantly, it also provides Rails backend support for institutions, fintech companies, and traditional banks entering the cryptocurrency space.

Base hosts over $7 billion in on-chain assets. cbBTC has become the second-largest asset, valued at approximately $2.5 billion. Its integration with Morpho shows that $2 billion in collateral supports over $1 billion in loans.

Robinhood

Robinhood's direction is quite the opposite: it started as a stock trading app and is now rapidly evolving into a full-stack cryptocurrency platform.

The features they have launched include: ETH and SOL staking for U.S. users; perpetual futures with up to 7x leverage for European users; over 1,000 tokenized stocks, U.S. stocks, and ETFs for EU customers, supporting 24/5 trading with zero commission. Their Ethereum Layer-2 blockchain, "Robinhood Chain," built on Arbitrum, is currently in testing.

As of Q3 2025, the scale of custodial crypto assets reached $51 billion. In the past twelve months, the nominal trading volume in cryptocurrencies reached $232 billion. An AI assistant named Cortex provides insights and market analysis for gold members. A cashback credit card automatically converts rewards into cryptocurrency. Staking is positioned as a "core feature" and a major driver of user engagement for 2026.

They acquired Bitstamp to strengthen global cryptocurrency infrastructure. They are expanding into Indonesia. They are developing Robinhood Social, a platform where traders can post actual trades and profit/loss information.

They have established the infrastructure of a new bank, including direct deposits, credit cards, and cash management, layered with cryptocurrency.

Then there are the crypto enthusiasts' favorites:

Hyperliquid handled $2.8 trillion in perpetual futures trading volume in 2025. The company made it to the Forbes Fintech 50 without any financing. This can be considered the most successful consumer product case in the cryptocurrency space.

However, Hyperliquid is not a groundbreaking technology for consumers but rather a success story within the cryptocurrency space. It serves users who already understand perpetual futures, leverage, and order book dynamics. Its trading volume primarily comes from traders who are already active in the cryptocurrency space and seek better execution. Hyperliquid simply provides a better trading platform for existing users.

What Are We Missing?

What should an ideal cryptocurrency consumer application look like? Let's be specific, not vague.

Invisible wallets. No need to worry about seed phrases. Social recovery or biometric security. Progressive custody, starting easy to use and gradually increasing security as balances grow. The technology already exists: account abstraction, passkeys, smart contract wallets. But adoption has been slow because developers prioritize the purity of decentralization over user experience.

Seamless fiat on- and off-ramps. Instant settlement. No waiting three to five business days for ACH transfers. No need to understand the difference between USDC and USDT. No minimum deposit requirements. Just link your bank account to transfer funds.

No obscure jargon. "Send $50 to Sarah," instead of "Enter the recipient's address and specify the gas limit." Natural language interaction that understands user intent. Error recovery features that allow you to undo transactions or cancel pending actions.

A simple and intuitive interface that isn’t as complex as operating a spaceship. All actions should be completed with one click—payments, exchanges, yield queries, social features, etc. Gradually introduce crypto concepts to users who want to learn while providing a fully abstracted interface for those who do not understand.

A consumer-facing trust layer. AI-driven risk alerts that warn you before you approve a transaction, saying "this looks like a scam." Automated portfolio management that optimizes DeFi yields. Seamless automation for handling tax reporting. The kind of assurance that ordinary people expect from financial products.

Compliance features built into the system but invisible to users. Selective disclosure features that allow you to share specific balances without revealing your entire wallet. Transaction privacy protection through shielding transfers when necessary. Identity protection features that default to pseudonyms. Data sovereignty features that allow users to control all personal information.

A strong narrative explaining why this matters without any belief system. Not "overthrow the financial system" or "be your own bank," but "it can do better what you are already doing."

It should not feel like "using cryptocurrency," but rather like a better banking application.

The problem is that most cryptocurrency applications are developed, tested, and funded by cryptocurrency practitioners. When your test users all have MetaMask installed and are well-versed in gas fees, you do not feel the friction that hinders other users' adoption.

Cryptocurrency solves problems that most people in developed economies do not face. Self-custody of funds and censorship resistance are indeed very important principles. But for those with normal bank accounts and stable currencies, these are just abstract threats rather than everyday pain points. The promotion of cryptocurrency focuses on "you should want it because of its potential impact," rather than "it can provide real benefits right now." This rhetoric simply does not hold up against competition from Venmo and Cash App.

What Have We Overlooked?

We often think that the failure of cryptocurrency is due to the lack of cool consumer applications. But upon closer inspection, its infrastructure is already quite mature.

Stablecoins work effectively. They are fully functional infrastructures that transfer real value across borders every day. Security has significantly improved. Smart contract audits have become standard practice. Multi-signature wallets are widespread. Insurance protocols are also in place. The catastrophic hacking incidents of 2021-2022 have significantly decreased in frequency as the industry learns painful lessons.

DeFi trading platforms are highly efficient. Protocols like Uniswap, Aave, and Compound can handle billions in trading volume with very little downtime. The total value locked in DeFi platforms exceeds $300 billion. Institutional investors are leveraging these platforms to enhance efficiency.

Institutions are utilizing this technology. BlackRock has launched tokenized money market funds. JPMorgan is handling blockchain-based repurchase transactions. Traditional financial institutions are quietly using cryptocurrency infrastructure because it is more efficient than traditional systems in certain applications.

Liquidity is deeper than ever. The spreads that plagued early DeFi have narrowed significantly. Arbitrage bots ensure efficient pricing across different trading venues. Professional market makers provide ample liquidity.

Institutional users are adopting cryptocurrency before retail users. While this is unusual, it is crucial. If you believe AI represents the future, then AI agents need stablecoins. They need programmable settlement systems. They need cryptocurrency infrastructure. Chris Dixon also agrees that AI agents require programmable money, which traditional banks cannot provide. As AI becomes more prevalent, cryptocurrency infrastructure will become essential. Therefore, infrastructure may be more important than hype. The foundation is already in place; what is lacking is not technology.

Cryptocurrency consumer applications will eventually prevail, but only if they stop trying to disguise themselves as cryptocurrency.

The applications that will truly stand out will not ask people to "use cryptocurrency," but will provide genuinely better solutions to the problems people already face: higher savings yields, faster payment speeds, lower transfer costs, portable identity information, and true ownership.

Bank accounts will feel familiar, and the interface will be very intuitive. Meanwhile, stablecoins will settle in the background, smart contracts will execute, and the blockchain will ultimately confirm, with users not having to worry about any of it.

Every generation creates tools they do not fully understand. The people who laid the transatlantic telegraph cable in 1858 likely thought they were just building a faster way to send information. They may never have realized they were constructing the nervous system of the global economy.

We often judge new infrastructure based on the first things built on it. And the first things are almost always wrong. They are merely imitations of old things dressed in new technological garb—like horseless carriages, moving pictures, and electronic newspapers.

Real transformation happens afterward. When someone who grows up alongside the infrastructure builds something that could not exist without it, creating something that the original builders never imagined.

The applications they develop a decade from now will be radically different from what we are discussing on crypto Twitter today. They will not be improved versions of existing products but things we currently cannot even describe in words.

Our task now is not to build that thing. We cannot do it. Our task is to ensure that the infrastructure is in place, functioning correctly, and accessible to those who will develop on it in the future without needing to read white papers.

Finance is our means to achieve our goals. Because it enables enough people to have the necessary tools, allowing the true builders—those we have yet to meet—to begin to act.

This is the strategy that truly works. Neither transformation nor surrender. We are simply constantly distracted by trivial matters.

The most important cryptocurrency applications have yet to be conceived. And that is my most optimistic view of this industry.