The Problems

Transaction Fees

The most popular blockchains require users to own native coins (e.q. Ether, Matic, Solana) to pay for transactions and interact with decentralized applications built on top of the network. Fees were primarily designed to reward miners or validators for their role in confirming transactions and protecting the network from spam attacks. However, the nature and structure of these fees can pose challenges for businesses considering building on blockchain technology. Even though consensus mechanisms were changing (Evolution from PoW to PoS), tokenomics & transaction fees' mechanics remained fairly similar, which indicates the stubbornness of the ecosystem and lack of will for a change.

The First critical issue with blockchain transaction fees is their variability and unpredictability. For example, Ethereum's model, which involves "gas" fees that fluctuate based on network demand, can lead to high costs during periods of congestion. This variability makes it challenging for businesses to predict operational costs accurately. The introduction of Ethereum Improvement Proposal 1559 (EIP-1559) aimed to address some of these issues by making fee estimation easier and reducing the variance of transaction fees. While EIP-1559 has been observed to lower transaction waiting times and potentially reduce fee variability, the impact on overall fee levels is complex and multifaceted, involving considerations of network load and miner extractable value.

The Second critical issue with blockchain transaction fees is related to the first-time user experience, including the lack of accessibility to native coins and the overall complexity of user flow. For newcomers, the blockchain ecosystem can be daunting, with the need to understand wallets, gas fees, and the procurement of native tokens for transactions representing significant barriers to entry. This complexity not only hinders the adoption of blockchain technology but also affects the scalability and user-friendliness of blockchain applications. Acquiring native cryptocurrencies to use as gas for transactions can be a complex process for those unfamiliar with crypto exchanges or peer-to-peer trading platforms. This necessity poses a significant hurdle, especially in environments where regulatory constraints or limited exchange access make obtaining these tokens challenging. Moreover, the requirement for native tokens to execute transactions can deter businesses and users looking for straightforward solutions, as it adds an additional layer of financial and operational planning. The developers have already introduced the EIP-4337 concept, which can be used on EVM blockchains with gas-fee concepts, but it also presents several potential issues that could affect its efficacy and adoption. We explain the differences and benefits of Saakuru Concepts vs EIP-4337 concept in the Gassless Transactions section.

These challenges underscore the need for ongoing innovation and simplification within the blockchain ecosystem to make it more accessible and economically viable for both new users and businesses looking to leverage the transformative potential of this technology.

Go to market complexity & cost.

In addition to the challenges inherent in the design of popular public blockchains, there are further issues that deter companies from confidently integrating their products into the Web3 space. One such issue is the complexity associated with the go-to-market (GTM) strategies for blockchain and decentralized applications. This complexity arises from several factors, including a lack of practical examples and guidance, a complex wallet as identity and storage provider logic, and a scarcity of high-quality on-demand Web3 development resources.

1. Lack of Practical Examples and Guidance: There's a noticeable shortage of compelling use cases for everyday applications in the Web3 space that businesses can look to as models. This gap extends to a lack of guidance on how to transition an application from Web2 to Web3 (From technical to regulatory perspectives), not just technically but strategically, to truly embed the benefits of Web3 into their products. This challenge is compounded by the gas fee design, which can deter the exploration of potential applications due to cost implications.

2. Complex Wallet as Identity and Storage Provider Logic: The current landscape of blockchain wallets is not particularly user-friendly, presenting a significant barrier to entry for average users unfamiliar with blockchain technology. The complexity of having to manage separate (sometimes even several) wallets as entry points for different applications complicates the user experience further. Addressing this issue requires innovation in making wallet as storage and identity provider usage more intuitive and integrated seamlessly with applications.

3. Scarcity of high-quality on-demand Web3 development resources: For small businesses, the blockchain space poses a significant challenge in the form of a talent gap. Finding and hiring developers with expertise in Web3 technologies can be difficult and expensive. This shortage of skilled personnel not only slows down the development and deployment of blockchain projects but also inflates the cost, making it less feasible for smaller entities to compete or even enter the space.

Companies face difficulties entering the Web3 space due to lacking clear examples, complex wallet systems, and a shortage of skilled developers. If we want Web3 to revolutionize - we have to change the approach.

Security

Public-permissionless blockchains, while pivotal in advancing Web3, inherently bring security challenges due to their open-access nature. This accessibility allows anyone to deploy applications, including those with malicious intent, introducing vulnerabilities through malicious contracts. The evolving complexity of both hackers' techniques and virtual machines means that security gaps are inevitable and can be exploited, creating a continuous battle to maintain security integrity.

Summary

Web3 is facing several technical and user experience challenges due to transaction fees, complex user experience & developer-experience issues. However, there are methods available to improve and transform this situation.