• Institutions may play a vital role in bolstering confidence in the sector, which builds trust for more to enter into the space
• Prime Brokerage Offerings and custody solutions could help convince more institutions to adopt digital assets
• Improving the general UX will also help lower barriers to entry for those outside of the industry

With the unforgiving bear market that has wreaked havoc across all within the industry, coupled with countless hacks and exploits that occupy headlines every morning, it is no wonder that onboarding more people into the space is quickly becoming an unsurmountable task.

As a survey conducted by The Ascent in June indicates, around 44% of the U.S. adult population do not own cryptocurrency or have not invested in it before. 24% of the surveyed sample explain that they have yet to enter the sphere because they think it is a bad investment, a drastic jump from just 9% in 2021. Even those who have entered the sphere are having second thoughts in recent times. As a survey by Pew Research Center in August suggests, up to 46% of American adults who have invested in crypto say that their positions have done worse than expected.

With doom and gloom all around and uncertainty hanging heavy in the air, we embark on a search to find out how more may be initiated into the crypto space. Speaking to Benjamin Stani, the Director of Business Development from digital assets financial services provider Matrixport, he shares with us some optimistic insights on onboarding the next wave.

“We’re putting the focus on continuous institutional adoption,” he says.

“Institutions can help grow the market into a more mature state and eliminate some degree of volatility.”

Indeed, one of the main reasons stated in previous market sentiment surveys centered primarily around a highly volatile market that aggregated a disproportionate level of risk that have deterred many from holding significant positions in the industry, or even entering the industry at all. Insiders hold the strong opinion that greater institutional adoption will introduce more stability into the market, as they are able to bring with them regulated products and services, together with better risk management practices that can help facilitate better investments in the crypto market.

DBS Bank in Singapore for instance, launched a digital asset ecosystem in late 2020 and State Street Digital, which launched last year and has an office in Singapore, has been expanding its crypto services to include lending, custodial, and payment services to the general public. Other banks like Goldman Sachs, Nomura, and Citi are also launching new subsidiaries in the space as a means to diversify away from traditional finance products.

Matrixport, which offers custody solutions together with Metamask Institutional, via Cactus Custody™, its third-party institutional custody service, also offers a prime brokerage offering that offers trading strategies across DeFi platforms to cater to their institutional clients. Prime Brokerage services essentially encompass the facilitation of various trading operations of large financial institutions, allowing these entities to borrow securities to increase their leverage so that they may focus on investment goals and strategies.

Benjamin Stani, Director of Business Development, Matrixport

However, many ardent followers in the space hold institutions at an arm’s length, with many fearing that greater institutional participation in crypto is likely to lead to risks of centralisation a scenario anathema to many.

With Coinbase, Kraken, and Binance holding up to 33% of total staked Ethereum collectively, according to research by Nansen, many are fearing for the threat of power consolidation and centralisation now more than ever. The Merge, which many have theorised to be capable of onboarding more into the space by allegedly reducing gas fees and transaction costs significantly, took place just last month. However, there were many misconceptions shrouding it that Benjamin wants to dispel.

“The biggest misconception about The Merge is that it would make transactions cheaper but what it does is just make the chain more energy efficient,” he tells us. “The primary objective of The Merge was to make scaling solutions possible to fit into the Foundation’s rollup-centric roadmap.”

The next stage of The Merge, which is slated to take place in 2023, would begin to implement sharding, which is envisaged to reduce network congestion and increase TPS (transactions per second). For now, however, even with the smooth transition of Ethereum from a Proof-of-Work (PoW) chain to a Proof-of-Stake (Pos) consensus protocol, it seems unlikely that The Merge on its own will be capable of onboarding more into the space just yet.

What Benjamin believes may serve as the solution, however, would be a better user experience (UX) interface for front-end applications.

“I think the way that you onboard more consumers is by improving the UX,” he says. “A lot of the ways that retail is interacting with crypto is still messy.”

Indeed, even popular wallets such Metamask and Trust Wallet are often fairly clunky to use. Having a good UX is especially important as it serves as the packaging for front end applications – oftentimes with the potential to make or break an onboarding experience for new users. Especially with the inherent complications of crypto, such as understanding fundamental jargons like “fiat”, “decentralisation”, and “gas fees”, having a clear and usable UX becomes ever more important for users, especially those from the older generation, to gain a basic understanding of how the ecosystem works.

“There will also be a lot of development from Matrixport for instance, in abstracting the protocol layer from the actual DApps (Decentralised Applications),” Benjamin adds. “I think in a few years we might even see a way where the end users themselves are not even aware of which chain or L2 (Layer 2 protocols) that they are transacting on, so that’s probably a big way to help onboard new users.”

Just as Benjamin says, there are various ways to simplify the onboarding access and generally improve user experience. With more projects and L2 rollups on the horizon, especially following Ethereum’s “rollup-centric” merge strategy, we may eventually see better and more streamlined ways for new initiates to deep their toes into the world of crypto.

This is an Op-ed article. The opinions expressed in this article are the author’s own. Readers should take the utmost precaution before making decisions in the crypto market. Coinlive is not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.