OP Research: Wallet, CEX and DAPP, who is the future of Web3 traffic entry

OP Research: Wallet vs CEX vs DAPP, Who is the king of Web3 Traffic?

Original article by CloudY Sihan

Original article edited by Vincero, YL, DoctorStrange

First, the development history of the entrance

Currently, the Web3 industry as a whole is temporarily in the early stage of development. Compared with the traditional Web2 industry, the traffic capture is still in a relatively primitive stage, usually carried out in a more crude way. With the development of Web3 industry, we roughly divide the way to get traffic into three major stages according to user needs.

The early days:

In the early stage of the crypto industry, the main demand of users was the transaction of cryptocurrency. Most users in the crypto industry often accessed the centralized trading platform (CEX) through the web or mobile terminal to use various functions, such as Mt. Gox and Bittrex in the early stage. Therefore, at this stage, CEX is the main entry of traffic, leading to the emergence of a large number of CEX, such as Binance, Huobi, OKEX, KuCoin, MEXC, Gate, etc. In addition to trading cryptocurrencies, CEX is often compatible with peer-to-peer (P2P) money in and out to further control the flow of traffic, as users also need fiat money in and out. However, because CEX has a large market share, once CEX goes wrong, it will have a serious impact on the whole market. Mentougou Event is a good example.

Medium term:

With the continuous development of the crypto industry, the functions required by individual users are gradually enriched, such as the use of blockchain wallet to store digital currency or transfer money and on-chain interaction. Especially after the birth of Ethereum, the online smart contract has brought the development of on-chain ecology. In a short time, Dapps mushroomed. With the popularization of basic knowledge in the crypto industry and the influx of a large number of new users, the usage rate of wallet also increased. Since then, wallet has also assumed the mission of DAPP entry on various chains.

In the subsequent development, the business scope of CEX and Wallet was further expanded. CEX gradually began to carry out financial derivative business with trading as the core, such as joining contracts, options, etc., to compete with wallet. However, due to the single public chain and the lack of on-chain infrastructure, the major wallets support fewer chains, and the functions of transfer and cross-chain are not as good as the trading platform experience. Especially after the birth of Tron, the very low transfer fee has a big advantage over CEX. However, due to the launch of EOS and USDT, the demand for on-chain interaction has increased significantly, the function of wallet has been further expanded, and the traffic part has tilted from CEX to wallet, and the on-chain ecology of the crypto industry has gradually taken shape.

Today:

Today, the needs of users are more diverse. Because of the wealth creation effect of the crypto industry, users crave more direct ways to make money and involve more complex businesses. As for the traditional CEX, CEX has introduced IEO and other features with great wealth creation effect, and it is also trying to integrate various derivative services and Dapps into its ecosystem, such as Binance's latest DeFi board and applet function, and Binance Pay. However, CEX such as MEXC and Gate choose to launch more "local dog" projects to give users more choices. As a result, CEX is increasingly critical as a gateway to the entire Web3 ecosystem. At the same time, the wallet also began to support multi-chain, and began to audit the security and other aspects of the entrance, and built-in DEX and other functions.

Due to the further popularization of wallets and users' demand for complex financial services, DeFi Summer emerged, with various DEX, lending, prophecy and derivative trading markets emerging in an endless stream. The wealth creation effect of coin issuance has brought a large number of new users to Web3. In this period, some leading Web3 applications independently use their own app (or DAPP) as their own independent traffic entrance, such as Opensea, StepN, etc., and use traditional Web2 applications as the entrance to load Web3 application traffic. Plugins for Twitter, and some traffic spilling over to social platforms like Telegram, Discord, etc. In general, with the explosion of traffic brought by the development of the industry, the competition for traffic is further heated. And due to the different demands of various traffic, the traffic inlet begins to form a diversified development mode with trading platform and wallet as the main body and other traffic inlet developing in parallel.

Ii. About the current situation of Web3 entrance

However, according to NFTgo.io, total NFT trading volume on Ethereum was about $10.68 million on Oct 28, compared with Reddit Collectible Avatars, which traded about $2.5 million. In other words, Reddit has the equivalent of about 25% of the entire Ethereum NFT market. Opensea has about 2.3 million cumulative users, and most of Reddit's 2.83 million NFT holders have signed up for the Reddit Vault. The number of Reddit wallets registered is almost equal to the number of Ethereum wallets that have traded NFT's (about 3.43 million), and a single NFT issued by a Web2 platform can generate the same amount of traffic as the entire Web3 NFT industry. In a short time, the number of users exceeded Opensea, the largest NFT market of Web3. As a result, although Web3 has had many revolutionary innovations, there is still a lot of room for further development.

When we look back at the changes in the portal of Web2, we find that the development sequence is: portal, search engine, PC social platform, mobile social platform. From the large and complete information set filtered, to the self-filtered information set, to the user's own information output, the user's fragmented information output, and finally the user's fragmented view information output. It is similar to the current Web3 from the original POW public chain investment dominated by BTC, to the explosion of investment targets in the IC0 era, to the screening of IE0 and ID0 coins, and finally to the user-initiated or DAo-based action research, analysis and recommendation of high-quality projects. Information is shifting from centralization, passivity and complexity to decentralization, initiative and simplicity.

Based on this phenomenon, we consider the current status, distribution and future development of Web3 entry. Due to the different definitions of Web3, this paper defines Web3 as: Web3 refers to a collection of decentralized applications running on the block chain. These apps, or DApps, allow anyone to participate without sacrificing personal data. Therefore, when we talk about Web3 portals, we don't limit them to "Crypto", but to all the objects that can be channeled to them, such as traditional Web2 platforms, centralized trading platforms, Web2 games, etc.

We will classify Web3 portals according to different behaviors of users, briefly describe their characteristics, and compare major portals under the same classification. Finally, we will give our views on the future development of each Web3 portal through its characteristics and comparison results.

Iii. Comparison of Web3 entrance

Before classifying Web3 entry, we need to determine the purpose of users entering Web3, or what Web3 can bring users:

- Change the logic of existing applications: copyright confirmation, privacy ownership, asset ownership, behavioral incentives

- Cryptocurrency investment

- NFT investment

According to the above functions of Web3, we draw the process of users entering Web3. Based on this process, we define two categories of Web3 entry:

1.  Account system (money in and out and fund management) : centralized trading platform, independent money in and out projects, money in and out aggregators, cryptocurrency ATM, cryptocurrency bank cards and over-the-counter transactions (OTC); EOA, CA, and MPC wallets, Account Abstraction (AA).

2.  Web3 DAPP (Tools, Social & Entertainment) : DEX, NFT Marketplace, Copyright Trading Marketplace, Domain Names, DeSoc, GameFi, X to Earn.

System of account

1.  Management of Funds

Money management involves storing, sending, and receiving crypto assets. Apart from the early trading platforms, wallets are the primary entry point for crypto users, carrying their identity, assets and even reputations. Security is the first priority of the wallet, and convenience is the second priority. The kernel of the wallet is actually a public-private key manager, which is based on the private key generated by asymmetric encryption technology, and has the absolute control of the user over the wallet, address (public key), and assets. Therefore, how to manage the private key is the key technology of different wallet products. On top of this, how to do more development based on wallet is another battlefield of different wallet products.

Currently, the main types of wallets are divided into managed wallets and unmanaged wallets, which simply means whether you control your wallet through a private key or not. Now the main custodial wallet is the trading platform account, the trading platform on behalf of you, the assets in the wallet. Non-managed wallets are relatively diverse, including hardware wallets, address wallets (EOA), and smart contract wallets (CA). EOA wallets are divided into plug-in wallets and mobile wallets. At the same time, there is another extension of the EOA wallet called the Multi-Party Secure Computing Wallet (MPC). And a new wallet concept, Account Abstraction (AA), upgrades EOA wallets to function as smart contracts.

(1) escrow wallet

"Owning a private key means owning a wallet" sounds very secure, but in fact, it is precisely because the private key/mnemonic is so important that keeping the private key/mnemonic is the threshold for users to use the wallet. The user experience of most existing wallets is nowhere near the level of Web2. This is why CEX is the first choice for most users entering Web3, because CEX only requires users to remember the login password. But the downside is obvious. If the trading platform goes down, goes offline or is hacked, the assets in the CEX may disappear with it.

A case in point is Mt.Gox, which went bankrupt in 2014 after suspending users' withdrawals after claiming that hackers had stolen 850,000 bitcoins. In addition, since all the funds in CEX are controlled by CEX, CEX can modify the numbers to allow the funds to be invoked (for example, the notorious data crash), or even directly divert the funds in trust to increase value.

However, these shortcomings do not affect users to continue using CEX. Because the trading platform has its own reputation endorsement, the ease of use of the trading platform, and most users only need secondary market trading, the current trading platform still has most of the traffic of the whole Web3. In December 2021, the crypto industry had 295 million users. Binance alone, the largest trading platform in the world, had 120 million users, while DEX Uniswap, the largest trading platform, had about 3.9 million users. This shows the advantages of CEX as an entry point to Web3. In other words, most users choose to sacrifice security for convenience.

(2) Unmanaged wallet

In contrast to CEX, most wallets trade convenience for security, resulting in a high barrier to entry for Web3. Specifically, a hardware wallet is the most secure because you have to have both the hardware wallet and the password to call the asset inside. On the contrary, it is more complicated. Firstly, users need to spend a lot of money to buy a hardware wallet, and they must carry it with them every time they use it. Once the hardware wallet is lost, the money in it will be lost.

EOA wallets are relatively secure and convenient. The EOA Wallet can be used with web plug-ins or mobile software, making it easier for users to access the wallet. However, users still need to remember and keep the private key. However, the EOA Wallet provides another type of private key -- mnemonics (12 words converted from private keys). Once the private key/mnemonic is lost, the wallet is no longer secure, so security is also a risk. According to CertiK, at least $274 million has been lost to private key leaks so far in 2022, including by specialist market makers such as Wintermute.

Although there are new technologies, MPC wallets based on EOA wallets, and more scalable CA wallets to enable so-called unselfish key or low threshold wallets, EOA wallets are still the mainstream. As the leader, Metamask (Little Fox) had more than 80 million users in December 2021, and its monthly activity even exceeded 30 million in March 2022. Although it pales in comparison to Binance, Fox is now untouchable in the current software wallet.

An MPC wallet is one in which multiple parties each get a portion of the private key, but not all of it. This is similar to multi-signing wallets, where all parties must sign in order to initiate a transaction. The MPC wallet increases the security of wallet accounts by distributing private keys in a centralized way. In addition, the MPC wallet can also perform the refresh function of key fragments: replace the original key fragments in each person's hand with new key fragments to solve the problem of key loss. Users only need to match the corresponding email or biometric verification information to recover their wallet assets. This latest solution compared to the current security operation cumbersome traditional wallet, is undoubtedly to increase the convenience of users, lower the threshold of Web3 entry.

The emergence of Account abstraction (AA) is likely to change the current situation of wallets. Account abstraction combines EOA and smart contract, upgrading EOA wallet to smart contract Wallet (CA) without changing the underlying architecture of ETH, greatly reducing the entry barrier of EOA and giving it infinite scalability. Implements most of the functionality of the current Web2 account. For example, pay Gas fee, unselfish key, account social recovery, etc. Specifically, the smart contract wallet means that the wallet itself will be programmable, customizable and even modular, which will make the smart contract wallet has infinite imagination. The wallet with the smart contract can customize a series of situations that can be realized by the smart contract, such as the different security threshold required for different amount transfer, the operation authority classification of different Dapps, etc., which will be closer to users. Current smart contract wallet example: Argent (social recovery) Gnosis Safe (Multiple signature) A3S (wallet transferability).

2.  Money in and out

The key elements of the money in and out program include: authentication, fiat money in to cryptocurrency, cryptocurrency to fiat money out.

KYC is usually required for users who spend more than a few hundred dollars per month. KYC requires identification (ID card, passport or driver's license), proof of residence and facial recognition, among other things. Most compliant trading platforms require users to do KYC in order to access money, but not all do. Independent money access projects, money access aggregators, and cryptocurrency ATMs are more decentralized and free. But centralized trading platforms and large OTC platforms will support a wider variety of fiat currencies because they have more legal and technical resources.

In terms of how money is paid and received, it is limited to wire transfers, ACH transfers, debit/credit cards and third-party payments (e.g., Google or Apple). However, some trading platforms, such as FTX, allow cryptocurrencies to be converted into fiat currencies and transferred to receivables via wire transfers. This brings great convenience to users, while avoiding the possibility of receiving black money on OTC or decentralized platforms.

However, due to the friction between fiat currency and cryptocurrency exchange process, such as exchange rate fee, distributor markup, blockchain network fee and so on. In general, the fewer distributor tiers, the less friction, so in terms of friction loss, Independent Project < The aggregator.

Centralized trading platform is the most common platform for fiat currency in and out of gold, generally in most countries in the world have remittance licenses, support the most types of fiat currency and cryptocurrency, and the lowest rates. However, CEX can offer cryptocurrency payments in another form, such as Binance's Binance Pay, which can be used to book a hotel or buy a gift card. CEX itself has a large number of secondary trading users, so it is easy to convert them into money customers.

Independent money transfer programs (Moonpay, Transak, Wyre) operate like small trading platforms, but most offer fiat money only. Their interface is simple and easy to use, and the user learning cost is low, but these programs have a distribution premium.

Gold in/out aggregators (such as TransitSwap, KyberSwap, MetaMask's fiat money in/out service), as the name implies, aggregate individual gold in/out items and CEX to achieve the optimal exchange rate and receive a commission from them. Staking is an staking staking staking staking. The staking staking staking is an staking staking staking staking.

The most commonly used OTC is peer-to-peer (P2P), where buyers and sellers directly trade in and out of fiat currency. Some platforms, such as Binance P2P, have to use a third party to eliminate the cost of trust in order to match buyers and sellers and charge a very low rate. P2P, however, means that payment methods can be relatively diverse, with buyers and sellers theoretically able to transact in any way they want as long as both parties agree. But the risk is also obvious, that is, may be passive participation in money laundering, resulting in the freezing of the card, or even forced to return the money.

Web3 DAPP:

1.  tool

Tool applications should have the greatest potential as an entry point for Web.0 traffic among the three sectors. The tool application is not only based on Web2 improvements, but also across the era of innovation. Like DeBox (social payment platform), Monaco (instant social media), and Skiff (collaborative work platform), essentially add Token economy on the basis of Web2 application, and realize privacy, transparency, and de-trust based on blockchain. So they are called "Web3 xx" -- Web3 wechat, Web30. Weibo, Web3 Google Docs, in other words, they don't provide an incentive for users to give up their current Web2 and switch completely to Web3, but instead incentiviize users for a short time through the Token. Therefore, we will focus on the role of DEX, NFT and copyright trading platform as portals to Web3 later.

(1) DEX

The DEX DAPP plays a crucial role in the user's access to Web3. In the past, users had to go to CEX to switch between assets because the order book trading platform on the chain was nowhere near as deep as CEX. With the advent of AMM DEX, the role of market maker was removed, the depth of on-chain trading was greatly improved, and the birth of liquidity mining further optimized the trading experience of AMM DEX. The existence of DEX enables users imported from other DApps to directly convert their tokens into stable coins such as USDT and USDC in the chain to lock in profits.

But the problem with AMM DEX is that there are no market makers, and when an LP pool is not deep enough, or when users make large trades, there will be huge slippage. Take the cUSDC event that happened on September 28 as an example: a user sold 1.5 million U of cUSDC on UniswapV2, but only sold about 520U of cUSDC because there was basically no liquidity.

(2) NFT  Marketplace

NFT(Non-fungible Token), as a new asset form based on blockchain, is   Web3 is a good traffic entry. Beeple's Everydays: The First 5000 Days sold for $69m, which helped to realize the value of digital assets and spawned a number of NFT-related initiatives, such as Sandbox and Decentraland, BAYC and CryptoPunks represent the PFP plate, as well as the NBA's Top Shot. Later, some copyright NFT such as IP copyright, patent copyright, music copyright and so on appeared to help creators to confirm their rights and interests.

NFT is one of the most widely understood forms of crypto asset. The value of the painting is not only in the canvas, but in the art itself, so the digital painting has its value. Compared with traditional paintings, NFT is more shareable and can satisfy users' psychology of showing off. Therefore, the NFT of PFP class came into being. CryptoPunks, as the representative of Crypto OG, made those who owned it automatically obtain the title of Crypto Native. BAYC, on the other hand, hopes to create a club that breaks the GAP between mainstream culture and Web3. It has also become a symbol of fame and status due to the joining of stars or well-known organizations such as Curry, Jay Chou, JJ Lin, and even Li Ning in China.

Unlike PFP, Sandbox and Decentraland are recognized for their expansion into the Metacomes by major international companies that purchase land at high prices. This land is used as a platform for the brand to attract customers and, in turn, their established customers to become aware of Web3 and the Metacomes. Similarly, NBA Top Shot also introduces the original NBA audience to Web3 through NFT, and then attracts more people with the help of wealth creation effect, thus achieving further improvement in price and reputation. Similarly, NFT of copyright introduces audiences in the field of creators to Web3 through the participation of creators, which not only endows creators with more sources of income, but also facilitates investors or fans to invest in or collect the copyright of works.

As the core place for NFT's value-added, NFT Marketplace, such as Opensea, Rarible, and SuperRare, as DEX is for most Dapps, gives users the possibility to monetize on NFT and lead users to interact more on Web3. On this basis, the derived NFT lending platform, NFT fragmentation platform and NFT transaction aggregator all play the role of tools to assist users to enter Web3.

2.  social

The domain name and DeSoc under the concept of DID are typical entries in Web3 applications. Similar to the traditional DNS domain name and social media, they can directly carry and transform user traffic, and take "Lianghao" and "information" as tools to acquire users. The global domain name registration market was 374 million in 2020, and the number of ENS registrations reached a record high of 1.12 million in the third quarter, according to Messari Research. When we compare Medium and Mirror users, we can see that Medium has 25 million monthly visitors, while Mirror has 2.1 million. It can be seen that domain names and DeSoc have more than 10 times the potential as portals to Web3.

(1) Domain name

Web3 domain names will turn complex addresses (such as Vitalik Buterin addresses: 0 xab5801a7d398351b8be11c439e05c5b3259aec9b) converted to readable characters (Vitalik. Eth), greatly reduced in the process of identification and input address of interaction as the object of threshold operation, at the same time to read the meaning of characters for the user can give the address additional value (e.g., Birth year, name, brand name, etc.). The current domain name is still in its infancy and can only be replaced with a short character, but we can still see users breaking down the identity gap between Web2 and Web3 when they change their Twitter name to xx.eth. "xx.eth" means all the link data associated with this address in the ETH ecosystem, in other words, it records the "lifetime" of this address. When it is applied to the Web2 world, it is equivalent to all its interactions in Web3.

  Along with the development of domain names, in addition to.eth, there are also.ether, domain names based on other public chains, such as BSC's.bnb, Aptos's.apt, Evmos's.evmos, and domain names issued by companies specializing in multi-chain domain names, such as DAS's.bit, Unstoppable Domains of.nft,.crypto,.dao, etc. Twitterscan is also expanding the relevance of domain names to Twitter. However, in terms of practicality and recognition, eth is still the best at present, because ETH is still dominated by the number of users and capital. While other domain names are expected to attract users temporarily through air drop, and can not retain users for a long time.

(2) DeSoc

In May 2022, Ethereum founder Vitalik Buterin, along with economist Glen Weyl and Flashbots researcher Puja Ohlhaver, published "The De-Centered Society: Searching for the Soul of Web3." Hence the popularity of the term DeSoc, which in this article is based on the Soulbound Token (SBT), essentially trying to build a decentralized society with credibility through the untradability of SBT and DID. At present, the mainstream applications of Web3 are still concentrated in the financial field, such as increasing the utilization rate of funds, faster and safer transactions, and more complex derivatives. DeSoc, on the other hand, can change the current overfinancialization of Web3 and lead us to a "more transformative, diverse, social distancing, and profitable future."

Take the current popular DApps as an example. Task platform applications such as Galxe and Quest3 convert the project side's requirements into a series of tasks and issue the corresponding SBT as proof. Users can obtain the SBT by completing the tasks and wait for the later airdrop of the project side. Some of these tasks require users to interact only on Web2, such as Twitter, Discord, and Telegram, which can attract a large number of Web2 users to Web3 through the monetizing effect.

另一个直观的案例应该是 Binance 的 SBT——BAB，其利用 BAB 将所内通过了 KYC 的用户流量导入进 BSC，并借助针对 BAB 的空投留住用户，同时发展基于 BAB 运行的项目，例如 Lifeform.cc，其要求用户拥有 BAB 才能够 Claim 其游戏的人物 Token LBT。

3.  entertainment

Entertainment Web3 applications are an important part of the industry. Among such apps or DApps, GameFi is the most important one. Compared with other Web3 portals, GameFi has a natural advantage, that is, it has a huge appeal to a large number of users within a certain period. This includes a large number of traditional Web2 users. In today's mainstream GameFi games, a large number of mature classic games from the Web2 era have been modified in the Web3 way, which means that GameFi is born with excellent loop-breaking ability.

GameFi, which exploded last year with the Axie Infinity buzz, has become one of the most important tracks in the Web3 space. Currently, the number of active players on the chain is around one million, and GameFi is focused on the three public chains BSC ETH POLYGON. The resulting "X to earn" concept, exemplified by StepN, a creative outdoor Web3 game funded by Binance that became a hit this year, represents the latest entertainment trend in the Web3 space. In addition, there are still various types of entertainment apps or DApps, such as imitation short video apps and dating apps. All of the new generation of Web3 apps are primarily oriented towards user monetization, supported by gameplay, and have a strong ability to break the circle. This type of dominant application means that GameFi in the Web3 era has a more mature gameplay and traffic appeal than any other entry.

Although entertainment applications still have a series of problems that require higher performance of the public chain due to excessive on-chain interaction, the defects do not outweigh the defects. Phenomenon-level entertainment applications emerge in an endless stream, such as Axie Infinity, RACA, StepN, etc. For out-of-circle traffic, some of them are using traditional EOA wallets, while others, like StepN, are using a centralized app approach to direct users to sign up for wallets with built-in portals. These initiatives have greatly helped GameFi bring in traffic and convert it to new, full-fledged Web3 users.

Thoughts on Web3 applications:

As mentioned in the beginning of this article, we currently divide Web3 application entry into two categories: account system and DAPP. Each of these two types of entry situations has its own advantages and disadvantages: For the entrance of the account system, this kind of entrance is more like a process from surface to point. Users first enter the bank through the centralized account system path, create their own account system, and then radiate from the account system (such as trading platform, wallet, etc.) to the point (Web3 applications such as DAPP). This is a relatively traditional traffic entrance way at present.

Due to the maturity of this type of entry, the gold entry system is relatively complete and convenient, and users can have full choice and freedom. The disadvantage is that the categories of traffic attracted are relatively single and one-sided, and it is impossible to make different policy configuration for different groups. For Web3 DAPP entry, it is more like a radiation from point to surface. Traffic usually enters through the point (Web3 DAPP) and then enters the larger Web3 ecology. This way can give full play to the subjective advantages of different types of DAPP and attract their own target traffic. For example, some specific NFT Marketplace and the once-popular Axie Infinity have attracted a lot of traffic from outside the circle through the influence of the DAPP itself.

At present, the account system entrance has a long history and is more mature. For example, the users of the trading platform still account for the majority of the whole Web3 users, and the wallet is also a must for entering Web3. But now more and more cases show that the excellent leading DAPP or Web3 application in the track has the ability and foundation to skip the entrance of the trading platform and wallet, because of the huge advantages of independent traffic, and start to establish independent APP or application side as the entrance.

This category of Web3 DApps represents a more emerging trend and deserves our attention. However, both still face some similar challenges. For example, the barriers to entry in the Web3 world are still much higher than those in the Web2 world, and they are working hard to remove these barriers while playing to their strengths.

Iv. Prospect of the future entrance of Web3

As the representative project of this year's traffic explosion, StepN has temporarily suspended a series of plans due to the general reasons of subsequent operation and environment. However, in the current development stage of Web3 industry, from the perspective of the eye-attracting ability and traffic aggregation ability of the explosive applications born in the industry, Has created conditions for them to create their own independent entry with huge traffic in a short period of time. After the initial success, they are not satisfied with the opening of the game market, but want to use the traffic entry to develop a series of metaverse visions around the Stepn ecosystem, Launchpad, DEX and even more DApps. I have to say that this is a very imaginative measure, and the author believes that it is also the way for many entrepreneurs who are not satisfied with Web3 APP or DAPP to rise up. StepN imitates the development path of wallet and at least opens up an idea, that is, it hopes to use the traffic of its peak period to develop ecology and retain traffic. This move has made Web3 entrepreneurs realize that this path is not only available for wallets, but also for APP DApps and even future traffic capture developers.

More recently, StepN's parent company Find Satoshi Lab has launched a new NFT trading platform called MOOAR. Although the project does not adopt the original idea as expected, StepN is at least leading by example.

In our opinion, the reason why the traffic of such short-term popular apps can escape the gravity of trading platform and wallet and get independent traffic is only phased. That is to say, the dividend period of the industry is limited, no matter for users or entrepreneurs. We believe that this is only caused by the immature or unbalanced ecological development of Web3 field. When the industry maturates, this phenomenon will gradually disappear, and precious traffic resources will be concentrated in a few leading applications.

This is just like in the period of rapid development of the Internet, no matter the application side or the traffic entrance can achieve a hundred flowers bloom, but in the mature period of the industry today, most services and even functions converge to a few leading apps, and small and medium-sized apps either die or are integrated. This is not just the result of capital operation. We believe that the most fundamental reason is that it conforms to human nature. As users, we cannot enter through complicated and complicated entrance for a long time, and the traffic always tends to be convenient and one-stop integrated entrance. This may be the inevitable result of the requirements of product end. But the front end still escapes the gravitational pull of user habits, which are hard to decentralize.

Therefore, we believe that in this situation, the future Web3 traffic entry, no matter choosing the account system or Web3 DAPP, should still focus on a few, and should conform to the form of radiation from the surface to the point. To be specific, from the current situation, trading platform and wallet are the most powerful and most likely terminator to achieve this great outcome. If CEX and wallet can grasp the current golden period of traffic and develop an entrance that conforms to users' habits and use environment, they should greatly improve their dominance in traffic. For example, the pull-down applet interface in the main interface of Binance trading platform, which integrates various apps and DAPP portals, is an attempt worth learning in my opinion.

We believe that the most likely way for traffic intake to be concentrated in a few leading applications in the future is to mature the industry (currently, trading platforms and wallets are the closest to this point), and this way of traffic capture does not violate the decentralization of Web3 and the spirit of respect for individual users. Because their back end is still built on top of the whole decentralized approach. Based on the spirit of decentralization, it is worth thinking whether there are better and better solutions about traffic entry in the future that can better optimize this centralized way of traffic entry.

In addition, Musk has recently completed the acquisition of Twitter. As the world's largest Web2 social network and a huge portal carrying the entire Internet traffic, it is worth looking forward to the reform of Twitter in the way of Web3. Musk may carry out major reforms for Twitter. It is worth pondering whether such a huge Web2 and traditional Internet giant will carry out Web.0 reform, in what way and to what extent, and what far-reaching impact these will have on traffic intake. Assuming that Twitter can carry out decentralized reform or be compatible with a large number of applications in the Web3 industry, Maybe it will break all the current patterns of Web3 traffic distribution. We believe it will be epochal. Let's wait and see.

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