Bastion's Mission to Solve Crypto's Onboarding Problem

In the rapidly evolving world of cryptocurrency and blockchain technology, one of the most persistent challenges has been user onboarding and experience. Bastion, a pioneering platform in the crypto space, is tackling this issue head-on with a comprehensive approach that aims to make entering and navigating the crypto ecosystem as seamless as using traditional web applications. In a recent episode of the Lightspeed podcast, Arianna Simpson, a General Partner at Andreessen Horowitz (a16z), joined Bastion founders Riyaz Faizullabhoy and Nass Eddequiouaq to discuss their vision for solving crypto's onboarding problem and revolutionizing the user experience in Web3.

The Three Pillars of Bastion

Bastion's approach to improving the crypto ecosystem is built on three fundamental pillars, each addressing a critical pain point in the current landscape. Riyaz Faizullabhoy, one of Bastion's founders, outlined these pillars:

1. Seamless Onboarding: Bastion has developed a custodial wallet infrastructure that integrates smoothly with existing authentication methods. Their goal is to make onboarding so effortless that users don't even realize they're entering the crypto space.

2. Frictionless Transactions: To address the high costs and complexity of blockchain transactions, Bastion has created a smart transaction routing system. This system aims to process 70-90% of interactions off-chain, significantly reducing gas fees and improving user experience.

3. Data Analytics and Insights: Recognizing the importance of user data in building better products, Bastion has developed a platform for data analytics and insights. This tool helps businesses understand how assets are used and interacted with, both on-chain and off-chain.

The Importance of User Experience in Crypto Adoption

One of the key themes throughout the discussion was the critical role that user experience plays in driving crypto adoption. Nass Eddequiouaq emphasized that the crypto industry has perhaps over-indexed on decentralization at the expense of usability. He drew an interesting parallel with Apple's approach to privacy:

"Apple, for example, didn't start focusing on privacy until after a few years, once they figured out the UX."

This observation highlights a crucial point: while decentralization is a fundamental aspect of crypto, it shouldn't come at the cost of user experience. The goal should be to make decentralization invisible to the end-user, allowing them to enjoy the benefits without grappling with the complexities.

Balancing Decentralization and User Experience

The podcast delved into the delicate balance between maintaining the core ethos of decentralization in crypto while making products accessible to a broader audience. Nass Eddequiouaq provided a nuanced perspective on this issue:

"Decentralization and a lot of aspects is pretty close to security. Just like security doesn't exist in a vacuum, it always comes at a cost of something else, generally user experience. Decentralization is exactly the same."

This analogy helps frame the challenge that crypto projects face. While decentralization is a key feature and selling point of blockchain technology, it needs to be implemented in a way that doesn't alienate potential users. The goal, according to the Bastion team, is to create an infrastructure that can onboard and retain billions of users today, not five years from now.

The Infrastructure vs. Application Phase in Crypto

An interesting point of discussion was the current state of crypto development and whether the focus should be on infrastructure or consumer-facing applications. Riyaz Faizullabhoy provided insights into this debate:

"I think we've been building up the stack as we've been, and every time you've seen companies being like enabled to build up the stack, I think the stack is actually fairly built out now. And so we are seeing these higher level applications, which is super exciting, like games, and other experiences in media entertainment."

This observation suggests that while there's still room for improvement in blockchain infrastructure, the industry has reached a point where more attention can be directed towards building user-friendly applications. This shift could be crucial in driving mainstream adoption of crypto technologies.

Bastion's Approach to Transaction Routing

One of the innovative features of Bastion's platform is its smart transaction routing system. Nass Eddequiouaq explained how this system works:

"When we create wallets, for example, today on Bastion, we basically create the wallets across every EVM chain at the same time. Because our view is that at some point, no one will care on which chain they're receiving the assets, whether it's a non-fungible token, the rail will be as invisible, as a swift, ACA, chips, whatever the fit wire, whatever the case might be."

This approach aims to abstract away the complexity of blockchain networks from the user, making the experience of using crypto assets as seamless as traditional financial transactions. By creating wallets across multiple chains simultaneously, Bastion ensures that users can interact with various blockchain ecosystems without needing to understand the underlying technical details.

The Role of Bridges in the Crypto Ecosystem

The discussion touched on the critical role that bridges play in connecting different blockchain networks. However, Nass Eddequiouaq also highlighted the security risks associated with bridges:

"Bridges are pieces of a forfeiture that are designed to move in generally large amounts around. And the amount of, I would call it kind of like faulty logic that is required for a large scale event, you know, security event to happen is fairly small, right?"

This observation underscores the importance of robust security measures in bridge infrastructure. As the crypto ecosystem becomes more interconnected, ensuring the safety and reliability of cross-chain transactions will be crucial for maintaining user trust and enabling seamless interoperability between different blockchain networks.

The Future of Self-Custody in Crypto

An intriguing topic discussed in the podcast was the future of self-custody in the crypto space. While self-custody has been a core principle of cryptocurrency, the Bastion team suggests that a more nuanced approach might be necessary for mainstream adoption. Nass Eddequiouaq noted:

"Everything that South custody is, I mean, custody is about trust and trust is a spectrum, right? It's really not a binary thing."

This perspective challenges the traditional binary view of custody in crypto and suggests that a spectrum of custody options might be more appropriate for different user needs and comfort levels. By providing flexible custody solutions, platforms like Bastion aim to cater to a wider range of users, from crypto novices to experienced enthusiasts.

The Impact of FTX on Crypto Trust

The conversation also touched on the impact of the FTX collapse on trust in the crypto industry. Arianna Simpson provided a nuanced perspective on this issue:

"The FTX situation really irritates me personally because that was just a case of outright fraud. It's the burning made off of our generation and frankly it has nothing to do with crypto. Crypto was just the way in which it happened but it was just straight up theft."

Simpson's comments highlight the importance of distinguishing between fraudulent activities that happen to involve crypto and issues that are inherent to blockchain technology. This distinction is crucial for rebuilding trust in the crypto ecosystem and educating users about the true benefits and risks of blockchain technology.

Bastion's Vision for the Future of Crypto

Throughout the podcast, the Bastion team outlined their vision for the future of crypto, emphasizing the need for seamless user experiences that can compete with traditional web applications. Riyaz Faizullabhoy summarized this vision:

"Our goal is certainly to help the customers and basically move towards trusting less and less other parties. But again, they need to start somewhere and we want to make sure that we're building essentially infrastructure that can onboard and retain essentially billions of people today, not five years from now."

This approach acknowledges the current limitations of blockchain technology while working towards a future where decentralization and user-friendliness can coexist. By focusing on building robust infrastructure and intuitive user interfaces, Bastion aims to bridge the gap between the crypto ecosystem and mainstream users.

The Role of Large Companies in Crypto Adoption

The podcast highlighted the increasing interest from large companies in integrating blockchain technology into their products and services. Riyaz Faizullabhoy noted:

"The fact that Nike and Starbucks are building and web 3 is incredible and I think wouldn't have been possible for the last cycle."

This trend suggests that crypto and blockchain technology are moving beyond speculative use cases and finding practical applications in established industries. The involvement of well-known brands could play a significant role in driving mainstream adoption of crypto technologies.

Challenges in NFT Projects

An interesting segment of the discussion focused on the challenges of launching and managing NFT projects. Nass Eddequiouaq shared his experience:

"I do think that the amount of expectations of, you know, kind of like the current NFT community is really unrealistic, right? If you have built real, you know, basically high quality experiences and products and infrastructure components, you know that it's gonna take time to architect it, to implement it, to actually test it, to roll it out, right?"

This insight highlights the need for more realistic expectations in the NFT space and the importance of giving projects time to develop and iterate. As the NFT market matures, there may be a shift towards focusing on long-term value creation rather than short-term speculation.

The Importance of Data in Web3

One of the key components of Bastion's platform is its focus on data analytics and insights. Riyaz Faizullabhoy explained the importance of this feature:

"We think beyond just wallets, we think really that there's invaluable data both on-chain and off-chain about how assets are used or are interacted with and that giving that data back to our customers will help them build the best experiences and the best products in web three."

This emphasis on data highlights the evolving nature of the Web3 space, where user insights and behavior analytics are becoming increasingly important for building successful products and experiences.

The Evolution of Privacy in Crypto

An interesting point raised by Arianna Simpson was the changing perception of privacy in the crypto space:

"I think what I've come to realize is that, honestly, at least at this juncture, users don't care about that as much as the initial universe of crypto users did."

This observation suggests a shift in priorities among crypto users, with convenience and usability potentially taking precedence over absolute privacy for many mainstream users. However, Simpson also noted the emergence of "modular privacy" solutions that can be selectively applied, indicating that privacy remains an important consideration in the development of blockchain technologies.

The Future of Blockchain Interoperability

The podcast touched on the future of blockchain interoperability and the role of different chains in the ecosystem. Nass Eddequiouaq shared Bastion's approach to this challenge:

"Our view is that at some point, no one will care on which chain they're receiving the assets, whether it's a non-fungible token, the rail will be as invisible, as a swift, ACA, chips, whatever the fit wire, whatever the case might be."

This vision of seamless interoperability between different blockchain networks could be crucial for the long-term growth and adoption of crypto technologies. By abstracting away the complexities of different chains, platforms like Bastion aim to create a more user-friendly and accessible crypto ecosystem.

The Role of Education in Crypto Adoption

Throughout the discussion, the importance of education in driving crypto adoption was emphasized. Arianna Simpson noted:

"It's on kind of everyone in the ecosystem to kind of educate themselves about what's going on and be able to distinguish between ad actors who are committing fraud versus the limitations of an early technology."

This highlights the need for ongoing education and awareness-building in the crypto space, both for users and for businesses looking to integrate blockchain technologies into their operations.

The Potential of Web3 Gaming

The podcast touched on the potential of Web3 gaming as a driver of crypto adoption. Riyaz Faizullabhoy noted the increasing interest in this area:

"We're seeing across the board, gaming, media, entertainment, social media, even education, actually is another one, a number of amazing use cases in the space."

This suggests that gaming could be a key sector for introducing mainstream users to blockchain technologies and crypto assets in a more engaging and interactive way.

The Importance of Pragmatism in Crypto Development

A recurring theme throughout the podcast was the importance of pragmatism in developing crypto solutions. Nass Eddequiouaq emphasized this point:

"We will only get there if we're pragmatic, if we're building pragmatic infrastructure, if we understand that there will be trade-offs and that decentralization is a spectrum."

This pragmatic approach, focusing on real-world usability and gradual adoption, could be key to bridging the gap between the ideals of decentralization and the practical needs of mainstream users.

The Future of Crypto Wallets

The discussion touched on the future of crypto wallets and how they might evolve to better serve users. Nass Eddequiouaq shared Bastion's vision:

"The one thing that we know for sure is that people hate it passwords. They're not gonna like to use phrases. That's kind of, that's the foundation."

This insight suggests that the future of crypto wallets may involve more user-friendly authentication methods, moving away from the complex seed phrases and private keys that have been a barrier to adoption for many users.

The Role of Regulation in Crypto

While not a central focus of the discussion, the role of regulation in the crypto space was touched upon. The increasing maturity of the industry and the involvement of more established companies suggests that clearer regulatory frameworks may emerge, potentially providing more stability and trust in the ecosystem.

The Importance of Use Cases Beyond Speculation

A key point emphasized throughout the podcast was the need for crypto to move beyond speculative use cases. Nass Eddequiouaq urged:

"Obviously use cases outside of speculation, please. Let's try to focus on user experiences."

This call for more practical applications of blockchain technology aligns with Bastion's mission to create infrastructure that enables a wide range of real-world use cases for crypto assets.

The Potential of Modular Privacy in Crypto

Arianna Simpson highlighted an interesting trend in crypto privacy:

"We're seeing ways of making other blockchains more private, but in a sort of selective, can be switched on, can be switched off sort of way."

This concept of modular privacy could be an important development in balancing the need for transparency in blockchain systems with users' privacy concerns.

The Challenge of Managing Community Expectations

The podcast touched on the challenges of managing community expectations, particularly in the NFT space. Nass Eddequiouaq noted:

"I'm actually extremely excited about kind of the current market, you know, people just resetting their expectations, giving more time to, you know, a lot of the NFT projects out there."

This reset of expectations could lead to more sustainable development practices in the NFT space and the broader crypto ecosystem.

The Importance of Iterative Development in Crypto

The discussion emphasized the importance of iterative development and learning from failures in the crypto space. This approach, common in traditional software development, is crucial for building robust and user-friendly crypto products.

The Role of Large Brands in Crypto Adoption

The involvement of large brands like Nike and Starbucks in the Web3 space was highlighted as a significant development. These brands could play a crucial role in introducing blockchain technology to mainstream consumers in familiar contexts.

The Future of Decentralized Finance (DeFi)

While not a central focus of the discussion, the future of DeFi was touched upon. The development of more user-friendly interfaces and the integration of DeFi protocols with traditional finance could be key areas of growth in the coming years.

The Importance of Security in Crypto Infrastructure

The podcast emphasized the critical importance of security in crypto infrastructure, particularly for bridges between different blockchain networks. As the ecosystem becomes more interconnected, ensuring the safety of cross-chain transactions will be crucial.

The Potential of Blockchain in Education

The mention of education as a potential use case for blockchain technology opens up interesting possibilities for credential verification, lifelong learning records, and more accessible educational resources.

The Evolution of Crypto Business Models

The discussion touched on the evolution of business models in the crypto space. As the industry matures, there may be a shift towards more sustainable revenue models that don't rely solely on token speculation.

The Role of Data in Web3 Development

The emphasis on data analytics and insights in Bastion's platform highlights the growing importance of user data in Web3 development. This could lead to more personalized and efficient blockchain-based applications.

The Challenges of Scaling Blockchain Technology

While not explicitly discussed, the challenges of scaling blockchain technology to handle millions or billions of users underlie many of the topics covered in the podcast. Solutions like Bastion's off-chain transaction routing aim to address these scaling issues.

The Importance of User-Centric Design in Crypto

Throughout the discussion, the importance of user-centric design in crypto applications was emphasized. This focus on usability and user experience could be key to driving wider adoption of blockchain technologies.

The Potential of Blockchain in Brand Engagement

The involvement of luxury brands in the Web3 space opens up new possibilities for customer engagement and brand loyalty programs. Blockchain technology could enable more direct and rewarding relationships between brands and their customers.

The Future of Digital Ownership

While not explicitly discussed, the conversation around NFTs and digital assets points to a future where digital ownership becomes more tangible and valuable. This could have far-reaching implications for various industries, from art and collectibles to virtual real estate.

Facts + Figures

• Bastion has raised a $25 million round led by Andreessen Horowitz (a16z).
• Bastion's smart transaction routing system aims to process 70-90% of interactions off-chain.
• Andreessen Horowitz raised a $4.5 billion crypto fund in 2022, with over $7 billion raised in total for crypto investments.
• Large companies like Nike and Starbucks are building Web3 experiences, indicating growing mainstream interest in blockchain technology.
• Bastion creates wallets across every EVM (Ethereum Virtual Machine) chain simultaneously when onboarding users.
• The podcast mentions that "crypto works in dog years," emphasizing the rapid pace of development and change in the industry.
• Arianna Simpson, Riyaz Faizullabhoy, and Nass Eddequiouaq have worked together for approximately seven years.
• The podcast discusses the shift from a focus on infrastructure to more consumer-facing applications in the crypto space.
• The discussion highlights the need for pragmatic solutions that balance decentralization with user experience.
• The podcast mentions the potential for modular privacy solutions in blockchain technology.
• The conversation touches on the challenges of launching NFT projects and managing community expectations.
• The podcast discusses the evolution of crypto wallets and the need for more user-friendly authentication methods.
• The discussion highlights the importance of data analytics and insights in building successful Web3 products.
• The podcast mentions the potential for blockchain technology in various sectors, including gaming, media, entertainment, social media, and education.
• The conversation touches on the changing perception of privacy in the crypto space, with a shift towards convenience for mainstream users.

Questions Answered

What is Bastion and what problem is it trying to solve?

Bastion is a platform that aims to solve the onboarding and user experience problems in the crypto space. It provides a custodial wallet infrastructure, smart transaction routing, and data analytics tools to make entering and using crypto as seamless as traditional web applications. Bastion's goal is to enable businesses to create user-friendly Web3 experiences without sacrificing the benefits of blockchain technology.

How does Bastion's smart transaction routing system work?

Bastion's smart transaction routing system aims to process 70-90% of interactions off-chain. It creates wallets across multiple blockchain networks simultaneously and intelligently routes transactions to the most efficient and cost-effective option. This approach helps reduce gas fees and improves the user experience by abstracting away the complexities of different blockchain networks.

What are the main challenges in crypto onboarding and user experience?

The main challenges in crypto onboarding and user experience include complex wallet setups, high transaction costs (gas fees), difficulty in understanding blockchain concepts, and poor user interfaces. Additionally, the focus on decentralization has often come at the expense of user-friendliness, making it difficult for non-technical users to engage with crypto applications.

How does Bastion balance decentralization with user experience?

Bastion approaches the balance between decentralization and user experience by treating decentralization as a spectrum rather than a binary state. They aim to make decentralization invisible to the end-user while still providing the benefits of blockchain technology. Bastion's infrastructure allows for gradual progression towards more decentralized options as users become more comfortable with the technology.

What role do large companies like Nike and Starbucks play in crypto adoption?

Large companies like Nike and Starbucks play a significant role in driving mainstream adoption of crypto technologies. By integrating blockchain and Web3 elements into their products and services, these companies introduce crypto concepts to their existing customer base in familiar contexts. This helps bridge the gap between traditional brands and blockchain technology, potentially accelerating wider adoption.

How does Bastion address the issue of high gas fees in crypto transactions?

Bastion addresses the issue of high gas fees through its smart transaction routing system. By processing a majority of transactions off-chain and only settling on-chain when necessary, Bastion significantly reduces the gas costs associated with blockchain interactions. This approach makes it more feasible for businesses to scale their Web3 applications without prohibitive transaction costs.

What is the future of privacy in the crypto space according to the podcast?

According to the podcast, the future of privacy in crypto may involve more modular solutions that can be selectively applied. While early crypto adopters placed a high value on privacy, mainstream users seem to prioritize convenience and usability. The trend is moving towards flexible privacy options that can be activated or deactivated based on user preferences and specific use cases.

How does Bastion's approach to data analytics differ from traditional Web2 approaches?

Bastion's approach to data analytics focuses on providing insights from both on-chain and off-chain interactions with crypto assets. This comprehensive view allows businesses to understand how users interact with their Web3 applications in ways that weren't possible with traditional Web2 analytics. By giving this data back to their customers, Bastion aims to help businesses build better experiences and products in the Web3 space.