Op-ed: PoS Layer 1 Protocols Must Make 3 ESG Changes to Improve the User Experience
As the Web3 ecosystem aims for widespread adoption, layer 1 protocols need to prioritize the user experience, particularly for developers. Taking inspiration from traditional consumer statistics, it is evident that a bad experience can push customers away. According to a report by PWC, 32% of customers leave a brand they love due to a negative experience. In addition, McKinsey and NeilsonIQ found that products with environmental, social, and governance (ESG) claims experienced 28% cumulative growth over five years, compared to products without such claims.
To attract users and prevent them from gravitating towards other platforms, layer 1 protocols must focus on speed, convenience, consistency, and sustainability. Green initiatives not only incentivize increased usage but also discourage developers and users from engaging with energy-consuming blockchain protocols.
Energy-intensive networks face operational challenges in certain circumstances. For example, Bitcoin miners recently had to shut down amidst a Texas heat wave, which caused power prices to surge and threatened the power grid. Sustainable initiatives have consistently proven to positively influence user adoption.
While proof-of-stake (PoS) layer 1 protocols use significantly less energy than the proof-of-work (PoW) model supporting Bitcoin, sustainability cannot be a secondary mission. To onboard more users and ecosystem projects, three key ESG changes are crucial for PoS layer 1 protocols:
1. Incentivize Green Energy for Validators and Nodes:
Layer 1 protocols should prioritize PoS consensus mechanisms over PoW and strive to rely on renewable energy sources. While Bitcoin has been making efforts to move towards cleaner energy sources, there are more sustainable options available that could be utilized elsewhere. By investing in incentives that encourage users to power their work through renewable energy, layer 1 protocols can offer cheaper and more environmentally conscious solutions. This aligns with the desires of consumers who actively seek out environmentally friendly products and services in 2023.
2. Use an Efficient Programming Language:
By selecting an efficient programming language, PoS layer 1 protocols can save time, offer a seamless coding experience for developers, and reduce computational power requirements. Rust is an example of a programming language known for its ease of use, error reduction, and reusability. Choosing efficient coding languages like Rust from the start or even rewriting systems in such languages can create more sustainable layer 1 protocols over time.
3. Ensure Fast Finality:
Fast finality, which guarantees that blockchain transactions will not be reversed, is essential for decentralized technology. However, achieving finality in PoW protocols consumes significant amounts of energy. PoS protocols can achieve near-instant finality and use 99% less energy compared to their PoW counterparts by selecting validators based on their coin holdings. Minimizing congestion on the blockchain further enhances sustainability and ensures a better user experience. Short transaction times are crucial to maintaining the interest of protocol users and developers, and attracting serious businesses to adopt Web3 technology.
By prioritizing ESG principles, layer 1 protocols can align sustainability, business development, and expansion goals, making them more attractive to users and projects. Implementing efficient coding languages, incentivizing renewable energy sources, and prioritizing fast finality will draw non-Web3 users to blockchain technology and drive mainstream adoption of Web3.
In conclusion, the user experience is critically important for the success of layer 1 protocols. Embracing ESG principles is not only beneficial for the environment but also aligns with consumer expectations and drives the long-term aspirations of mainstream adoption in the blockchain industry.