Gnosis Co-founder Dr. Friederike Ernst Predicts Web3 Trends for 2024, Anticipates ‘Real-World Crypto Integration’
In Brief
In an exclusive interview with Metaverse Post — Dr. Friederike Ernst, co-founder of Gnosis and Gnosis Pay, shared her Top 6 predictions for the Web3 industry in 2024.
As we approach 2024, the trajectory of Web3 in the upcoming year is poised to redefine the landscape. Several key trends are expected to dominate the discourse, catalyzing shifts in the way we perceive and interact with digital ecosystems.
With analysts and experts are keenly anticipating the unfolding trends of Web3 in 2024 — Dr. Friederike Ernst, co-founder of Gnosis and Gnosis Pay, shared her insightful perspectives in an exclusive interview with Metaverse Post, on the imminent trends that will dominate the Web3 ecosystem next year.
Ernst’s predictions revolve around three pivotal aspects – the need for enhanced user-friendly experiences, the imminent demise of the 12-word seed phrase, and the growing integration of real-world crypto payments.
UX Crucial for Blockchain Platforms’ Global Adoption in 2024
Addressing the challenge ahead for the Web3 ecosystem, Dr. Ernst believes that 2024 could be a make-or-break year. Identifying user experience (UX) as the foremost challenge, she underscored the necessity for blockchain platforms, notably Ethereum, to prioritize usability.
“2024 will be the turning point where Web3 technologies are no longer built solely by and for early adopters and crypto natives, but for newcomers too. This is already happening through the launch of new products and applications with more mass appeal and utility,” Gnosis’ Dr. Friederike Ernst told Metaverse Post. “UX is by far the biggest challenge that needs to be addressed. If you believe Ethereum and other credibly neutral blockchains should become the global settlement layer, then we need to make much bigger strides in the area and make applications running on these networks usable and meaningful to a much bigger audience.”
She said that for Ethereum and other neutral blockchains to establish themselves as the global settlement layer, a critical shift towards more user-friendly experiences is imperative.
“By prioritizing creating a cleaner, more accessible interface for users new and old, Ethereum can become the global settlement layer based on practical usability for as many people as possible. That’s why Ethereum, and more specifically, those building on it, have a responsibility to simplify and streamline UX,” she added.
Shifting Away from Blockchain Tribalism will be a Industry Challenge
Addressing the call to move away from blockchain tribalism, Dr. Ernst highlighted the lack of clarity regarding which blockchain suits specific business cases, emphasizing the industry’s responsibility to provide support in decision-making. Dr. Ernst contends that decentralization and permissionless innovation will guide the industry, calling for a more inclusive and collaborative environment in 2024.
“Shifting away from blockchain tribalism will be a challenge for many. A lot of the rationale behind the kind of tribalism we have seen in the blockchain community comes from people being proud of the things they’ve built and the people they built them with,” she explained. “In some ways, blockchain tribalism emerged as a result of the notion that there would be “one chain to rule them all.” This, we now know, is no longer the trajectory for the industry looking into 2024. As a result, many projects are falling short in assessing where the future of their projects needs to be for them to have the most significant impact possible.”
Dr. Ernst urges the blockchain community to move beyond tribalism in decision-making processes, advocating for a collective effort to facilitate real cost/benefit analyses across different networks. She asserts this would empower projects and enterprises to make informed decisions tailored to their unique business needs.
“Some blockchains have very large validator sets (Ethereum has 600k validators, Gnosis Chain has 170k), while others have much more restricted sets. As blockchain applications become more mainstream, navigating the nuance of decentralization and doing a prudent price/ benefit analysis is paramount to make sure you’re building on the right stack for you. The industry needs to provide more support in helping projects make that decision,” Gnosis’ Dr. Friederike Ernst told Metaverse Post.
Account Abstraction will Emerge as a Game-Changer in DeFi
Dr. Ernst highlighted the emergence of account abstraction as a groundbreaking development that could address the technical challenges associated with self-custody. She stated that account abstraction will help address UX challenges and overcomes technical hurdles associated with self-custody in 2024, providing easy onboarding, account recovery, gas abstraction and batch transactions.
“By abstracting the more technical points of certain processes away from the end user and automating them in the ‘back end’ of the product, the experience of decentralized finance can be made much more seamless and accessible. Account abstraction can yield easy onboarding, account recovery, gas abstraction, batch transactions and more,” said Dr. Friederike Ernst.
She added that as with many new technologies, early adopters often prioritize technical customization, enjoying the way their understanding of the underlying technology allows them to make choices about the way they interact with it.
However, as technology becomes more popular, this kind of customization becomes more niche, with many users onboarding because of the newfound ability to engage with the benefits of this technology as more technical decisions are abstracted away from them.
“Account abstraction lets you solve several UX impediments in one go. It will be a game-changer for addressing UX challenges and also for overcoming the technical challenges associated with self-custody.”
End of the 12-Word Seed Phrase
Predicting 2024 as the year marking the end of the 12-word seed phrase era, Dr. Ernst predicts that the traditional practice, once considered the epitome of asset safety, is outdated. The shift towards account abstraction, she posited, would herald a new era in blockchain, enabling the realization of inclusive finance objectives that have long been at the core of the industry’s values.
“The current practice of using 12-word seed phrases as part of keeping crypto wallets secure has long been seen as quite an archaic practice by many. Blockchain technology has revolutionized the world of privacy and security in many ways, so it’s almost funny to think that amid all this sophistication, crypto holders are expected to accept that ‘these are your 12 words, NEVER lose them but also make sure NOBODY ever sees them.’ We need easy onboarding and technological solutions for navigating the whole spectrum of custody and recovery options (social recovery, institutional recovery, partial recovery),” explained Gnosis’ Dr. Friederike Ernst.
Integration of Traditional and Crypto Payment Rails
Dr. Ernst predicts the integration of traditional and crypto payment rails as a significant trend for 2024. She envisions a seamless integration unfolding, potentially improving the usability and accessibility of cryptocurrencies in everyday transactions.
“Between crypto becoming more mainstream and more widely adopted as well as traditional finance and payments looking to blockchain and crypto for security solutions and innovation, it makes sense that the next step is the integration of traditional and crypto payment rails.”
Reflecting on the transformative impact of Proof of Concepts in 2023, particularly those bridging the gap between on-chain and off-chain payments, Dr. Ernst underscored the potential of these developments.
“On- and off-ramping have been some of the biggest pain points in the past. The difficulty of exchanging from crypto to fiat or vice versa restricted both the usefulness of holding crypto as well as the widespread use of on-chain protocols for financial assets, almost all of which live off-chain.”
On Blockchain’s Future and Payment Systems, 2024 and Beyond
As the co-host of the Epicenter Podcast, Dr. Ernst shared her predictions on emerging technologies for 2024, including privacy technologies, advanced interoperability and AI agents on-chain. She anticipates these technologies will influence the trajectory of the blockchain and tech landscape.
“Privacy technologies, advanced interoperability, and AI agents on-chain will be big themes for the coming year. Privacy is necessary for many applications to hit the mainstream and ZK technology will enable us to make sure certain rules are enforced without giving others access to sensitive data,” Dr. Friederike Ernst told Metaverse Post. “AI agents on-chain will change everything in 2024. Giving AI agents a degree of economic freedom will unleash huge potential for automation and efficiency – blockchains make an ideal substrate for machine-to-machine payments.”
Looking ahead into 2024, Dr. Ernst emphasized the importance of building bridges between traditional financial rails and Web3-based payment systems, citing Gnosis Pay as a project that exemplifies this approach. She advocates for the virtues of Web3 discourse, emphasizing permissionless innovation and experimentation as crucial for addressing complex industry challenges in 2024 and beyond.
“We often forget that while payments work well for users in the global north, the same can not always be said for the global south. More than 40% of adults in developing nations are not using digital payments. By using efficient Web3 rails, we can help close this gap, ensure financial agency, and enable participation in market economies,” explained Gnosis’ Dr. Friederike Ernst.
She asserts that Web3 payments will be transformative for many people around the world. While there are many people, especially in the Global North, for whom traditional finance works quite well and decentralized finance will also work quite well once they onboard, there are also a large number of people whose needs traditional finance does not serve by design.
“Web3’s promise has long been financial inclusion – but so far we haven’t meaningfully delivered on this promise. Making Web3 payments cheap, easy to use, and compatible with traditional payments will be the greatest asset to the many who haven’t been able to benefit from traditional financial institutions,” Dr. Friederike Ernst told Metaverse Post. “Looking forward, and thinking more broadly about the financial system, at Gnosis we’ve been working on a fully decentralized framework for UBI called Circles UBI. Rather than rely on central registries of human bio-data, Circles UBI employs trust networks and on-chain personal currencies.”
As the Web3 ecosystem prepares for the challenges and opportunities of 2024, Dr. Friederike Ernst’s insights serve as a roadmap for the industry’s evolution, emphasizing the need for inclusivity, usability and pragmatic decision-making.
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Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.
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Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.
