We’re gradually navigating through the third year of the web3 bear market, a landscape that feels paradoxically bizarre yet thrilling.
This oxymoronic state of being towers almost proudly at the forefront of this fiery mix of revolutionary technology, reshaped social governance models and a bigger-than-ever ease to scam money away from overly excitable young visionaries.
In this mix, there is a recurring issue which arises that I find particularly interesting to try and understand.
Due to the space proudly asserting that trust and transparency are implicit in its technological backbone, this is probably the last problem that an untrained eye would expect. I am referring to the recurring problems of communication, trust and transparency.
With a mix of archetypical class divide.
Let me show you what I mean.
The Metaplex Mess
Just last week, Metaplex made what they believed would be a positive announcement on their Twitter feed.
Heralding their work with the Solana Foundation to bring token metadata to a terminal state of immutable completion, they released the following thread:
Almost hidden in it, there was a whispered mention of network fees that would be added to actions such as minting and updating NFTs.
The news sparked outrage in the community, from devs who had practical concerns to community members who were fundamentally against any form of taxation in the ecosystem.
And yet, this move made complete sense from the Foundation’s perspective. Development requires funding, after all.
Regardless,it did not sit well with the community.
With angry calls for forks, dev groups threatening to flock to Ethereum and thought leaders posing logical concerns over the future problems that would arise if SOL increased in value and fee structures were stuck in immutable contracts, there was an overwhelming negative perception of this move.
After all, Solana’s key selling point is ultra low-cost utility NFTs and very low entry barriers. The argument is that such fees would stifle revolutionary emerging use cases.
Given Metaplex’s positioning as a ‘public good’, this move contradicts the core values cherished by its users.
“But at the same time, public goods need funding too”
The situation exposes an evident contradiction between two vital stakeholders here – the Foundation and the Community.
And this isn’t an isolated incident..
A Quick Glance at ARB
Following arguably the most anticipated airdrop of the year, the newly formed Arbitrum Foundation proposed transferring 750 million ARB tokens, worth about $1 billion then, to its own wallets.
This was intended to be a “special grants” program to promote growth on the Arbitrum chain.
Almost immediately, the situation turned messy.
Before the vote ended, the foundation was found to have prematurely moved some tokens to its own wallets.
Predictably, this sparked an uproar in the fledgling DAO.
The foundation’s explanation that the vote was merely to ‘ratify an already decided move’, not a genuine proposal, only added fuel to the fire.
In response to the substantial backlash, the foundation released AIP 1.1 and 1.2, aiming to rebuild trust with the community, and made other commitments for transparency in future proposals, smart contract-enforced 4-year lockup periods for the foundation’s tokens, and lower token threshold to make governance more accessible.
Although this matter seems largely rectified, it underscores the consistent communication failure, tinged with unprofessionalism, that is far too prevalent in web3.
Promises of complete decentralization are undermined when a foundation disregards a community vote.
Leadership teams often underestimate community reactions, and idealistic pledges of decentralization, trust, and ‘power to the people’ are marred by human flaws and misunderstanding.
The Ledger Letdown
On May 16th, Ledger announced a new feature called ‘Ledger Recovery’. For a monthly fee of $9.99, a user could retrieve their keys through the provider.
What was presented as a great beginner-friendly service used to improve user experience instead was perceived as a slap to the face from the community. There are a few reasons why:
Firstly, Ledger has a history of leaks- such as in 2020 where they accidentally doxed their user base to the public.
Secondly, the announcement coincided with the European Union introducing a law mandating identification for all crypto transactions.
This timing led the community to suspect a premeditated, overly centralized move.
The CEO himself admitted on a podcast that a government could theoretically subpoena them and gain access to your information
Ultimately, and perhaps most significantly, this move was in stark contrast to the community ethos.
Hardware wallets are typically used by those seeking complete control of their funds. The suggestion that Ledger, or any third party, might have backdoor access to seed phrases was outrageous, leading to a sense of betrayal.
Personally, I don’t believe the issue lies with the move itself, but rather its execution and the poor communication that surrounded it.
The service should have been provided for new devices only, not the existing ones – this would allow a genuine opt-in, opt-out choice.
More critically, the team should have been transparent with their communication about this update throughout its development, not after its launch.
The way it was unveiled simply underscored the feature’s contradiction with the fundamental value of cold wallets, causing significant frustration among their user base.
Although Ledger has wisely retracted this feature for now and responded adequately to the backlash, this incident continues to underscore the industry-wide problem of communication, this chasm between organizations and their communities.
The Overarching Problem
The overarching issue reveals itself to be quite straightforward:
web3 has a messaging problem, a deep-rooted one.
It isn’t isolated to a single organization but manifests itself as an industry-wide phenomenon, rooted in a disconnect between the different user archetypes that make up the space.
From Metaplex’s opaque changes to Ledger’s missteps, the web3 world currently seems to be struggling to keep its promise of transparency and trust.
There is a lack of effective communication with communities around products. Even more notably, leaders oftentimes feel disconnected to their community.
In both the metaplex and ledger situations, the reactions of the community should have been very predictable, and the lack of such was caused by a lack of understanding of their customers.
With values such as transparency, trust and community-lead inclusivity being core and necessary motivators for many in the space, it hurts even further when communities feel like they aren’t involved in the manifestation of big decisions.
It feels like announcements are made after, rather than before and during, big developments are unleashed, developments alter both the user experience and the overall perception of a brand and its services..
In all three cases, this is a stand-out and paramount mistake.The absence of dialogue was a failure to utilize the valuable insights the community might offer, leading to these avoidable PR nightmares.
The web3 world brings out the worst, but also the best of human nature. It will be interesting to see how such problems are tackled in the future.
Whether it is more diverse teams, better marketing or simply evolved communication standards between teams and their communities, the space has the potential to be the pinnacle of human cooperation and discourse.
We, the visionaries, must master the art of harnessing this potential, transmuting it into decisive, unwavering action.
Also Read: We Are in A Crypto Liquidity Crisis – But The Reason is Not What You Think
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief
This article was written by Harry Vellios and edited by Yusoff Kim
