The Next Billion - The Daily Gwei #372
We've got an entire planet to onboard, anon.
As I’m sure many of you are aware of by now, a few months ago Reddit announced that they are going to be scaling their community points system using their own instance of Arbitrum. As Rahul notes below, Reddit has 500 million monthly active users so the fact that they chose to use an Ethereum-based scaling solution is a pretty big deal (to say the least). Though, I think that the even bigger deal is the fact that most of these users are currently non-crypto natives.
The number of people who have purchased coins or tokens on a centralized exchange is probably in the 100+ million range at this point. Though this doesn’t mean that these people have actually “used” crypto and estimates put actual active on-chain users at less than 10 million across all smart contract chains/networks. Due to this, it’s pretty safe to say that the actual on-chain products and services have a lot of adoption left in them - literally billions of people, in fact. But we’re not there yet - there’s still plenty of building to do at the infrastructure, application and user experience layers before we can even think of onboarding most of the world to something like DeFi.
What I find particularly exciting about ecosystems like Reddit embracing scaling solutions is that they are unlocking new economic activity rather than just migrating it from layer 1. The types of things Reddit will be doing on their Arbitrum instance are simply not possible or prohibitively expensive to do at layer 1 which means they never would’ve happened in the first place. By embracing a rollup-based solution, Reddit not only gives their users a cheap and fast experience, but they also add new activity/adoption to the Ethereum network as a whole. Think about it - millions of people are going to be downloading an Ethereum wallet for the first time to use Reddit’s crypto products/services on Arbitrum - this is very different to existing Ethereum users migrating to Arbitrum.
Of course, Arbitrum isn’t the only scaling solution that big non-crypto companies are embracing. Immutable X (built on StarkWare) has been making waves lately by partnering with massive businesses such as TikTok, Playco, ESL and more. Polygon has also been a big player in this area partnering with brands such as Atari & WWF and being the only other network that OpenSea has been deployed to. On top of this, the Polygon PoS chain has onboarded a tonne of new people into the Ethereum ecosystem since the start of this year (and since before rollups were even live). Of course, this is all only the beginning of traditional non-crypto native companies embracing this technology and I’m sure we’ll be seeing many more partnerships in the near future across all scaling solutions.
All this is to say that I think the crypto community misses the forest for the trees sometimes. While we’re all busy fighting over the current crop of a few million users by trying to lure them in with liquidity incentives, we still have billions of new people left to onboard. This is why I personally focus on the work that the scaling teams are doing because without these solutions, we aren’t going to be able to scale anywhere near where we need to be. I’d wager that in a decade or less, there will be hundreds of millions (if not billions) of transactions per second happening across all crypto-networks from both humans and robots alike.
So let’s focus on onboarding the next billion users, shall we?
Have a great weekend everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.