Web3’s Sovereignty Fetish Comes at the Cost of User Experience

Decentralization purists preach self-custody like gospel—while glossing over the fact that most users still can’t recover their wallets without begging on crypto Twitter.

The convenience tax

Every ’not your keys, not your coins’ sermon ignores the reality: people willingly trade sovereignty for seamless UX in every other digital domain (looking at you, Venmo).

Bankers’ revenge

TradFi quietly wins when MetaMask gas calculations require a PhD—Wall Street’s old guard smirks as DeFi’s ’unbanked’ dream drowns in seed phrase panic attacks.

Until Web3 solves its UX crisis, sovereignty will remain a luxury good for crypto’s 1%—the rest will keep gambling on CEXs like degenerate day traders chasing the next BNB pump.

Web3 is still building for insiders

Despite the industry’s progress, onboarding into web3 remains broken. Wallets are still designed for users who already understand crypto, not for the millions who do not. Most people are expected to write down and store complex seed phrases, understand gas fees, switch between chains, and avoid costly mistakes. There is no support system, no fallback, and often no way to recover funds if something goes wrong. These are not small issues. They are the primary reason everyday users hesitate to engage with web3 at all.

User data backs this up. A 2024 survey by ConsenSys revealed that over 55% of respondents found self-custody wallets intimidating or confusing. Abandonment rates are high, especially among first-time users. Fear of making irreversible mistakes with their funds keeps many from transacting after onboarding. A separate survey by RIF Technology showed that 13.25% of users identified onboarding and access as major challenges when learning to use blockchain products, while nearly a quarter (24.56%) called for easier onboarding and better mechanisms to avoid losing keys. These are not edge cases. This is the norm.

Users are asking for simplicity, not sovereignty alone

At the same time, people are more comfortable with digital finance than ever before. Platforms like Revolut, Nubank, Paytm, and Venmo have trained millions of users to expect simplicity, instant transactions, and customer support when things go wrong. These platforms are growing rapidly because they remove friction from the user experience. Meanwhile, most web3 apps are adding it.

It is clear that people do want more control over their money. The rise in demand for self-custody after incidents like the recent Bybit hack proves this. That breach reminded users that even major, well-known platforms are vulnerable, and that trusting centralized services with full custody of funds comes with risk. Events like this push users to seek options where they feel more in control of their assets. But they want control that is safe, understandable, and forgiving. Not control that comes with a warning label and a sense of dread every time they open their wallet.

This is where the industry needs a mindset shift. We need to stop treating convenience as a compromise. It is not. It is a feature. In fact, it is the feature that will determine whether crypto becomes infrastructure for the next generation of finance or remains a niche subculture.

CeDeFi shows there’s a better way

Until recently, most projects chose either full decentralization or full custodianship, with little room for in-between models that offered both control and safety.

There is a viable path forward. CeDeFi, or centralized-decentralized finance, blends the best of both worlds. It gives users optionality. You can hold your keys or delegate custody. You can switch between custodial and non-custodial experiences depending on your risk tolerance or level of expertise. CeDeFi models allow for user protection and simplicity while still honoring the principles of decentralization.

Beyond CeDeFi, other usability-driven innovations are also reshaping how people interact with crypto. Features like username-based transfers and wallet integrations with familiar platforms like Telegram are designed to reduce friction at every touchpoint. The Open Network (TON), for example, used its integration with Telegram to surpass 10.78 million activated wallets, a 1,400% increase in one year. This surge was driven by seamless in-app wallet creation and a user experience modeled after web2 simplicity. By prioritizing ease of use, some platforms are helping people who have never interacted with crypto before begin to use it regularly. And they are staying. Retention is higher when users feel confident. Adoption grows when people feel safe.

The broader industry needs to follow suit. There is too much talent, capital, and potential in web3 to keep building for an elite group of technically proficient users. If we want to bring web3 to the world, we have to stop expecting the world to adapt to web3. The tools must evolve to meet people where they are.

Crypto does not win by being philosophically pure. It wins by being usable. The next wave of adoption will not come from pushing users toward abstract ideals. It will come from designing products that respect users’ time, attention, and expectations. Sovereignty is important, but without convenience, it stays out of reach. The challenge now falls to the next wave of builders: to create experiences that make users feel both empowered and at ease.

Steve Milton is the co-founder and CEO of Fintopio, a CeDeFi wallet platform. Steve is an innovator in the web3 space, focused on driving adoption through user-first solutions that make crypto intuitive, accessible, and practical for everyday users. As co-founder and CEO of Fintopio, he is reimagining how users interact with both centralized and decentralized finance. He previously served as Global Vice President at Binance and Chief Marketing Officer at BNB Chain. Earlier in his career, he held leadership roles at Shopify and Unilever, helping scale global products and digital platforms across international markets.