Good Problems
Challenges that signal progress
Many of the biggest challenges I see crypto founders face stem from ecosystem growing pains — problems that have less to do with the founder’s specific company and more to do with the state of crypto overall. These growing pains come in many forms, but they often involve fragmentation or scaling issues.
Fragmentation often appears when new ecosystems are created, requiring users to move funds in order to have tokens accessible and usable on the new chain. This creates a point of friction for users moving over to the new ecosystem or specific application. If they don’t have the right tokens on the right chain, they typically need to leave the user flow and bridge their funds on a third-party application before returning. This is a major dropoff point in many customer journeys. Similarly, there’s fragmentation across ecosystems from a data perspective: even if a user is interacting with the same wallet across various ecosystems, it’s often difficult to see all of their transactions and user behavior in one place.
Scaling is another issue that builders in crypto are well aware of. Just last week, two L3s experienced over two days of downtime, caused by a large increase in on-chain activity as well as a failure on the chain’s data availability layer to process the larger batch sizes (increased as an experiment to reduce frequency of batch posting to the L2 and cut costs for the L3 chains).
These problems are frustrating for ecosystems, applications, and users alike. But I like to call them “good problems.”
Increased fragmentation means developers are building new ecosystems and applications for consumers to use. Scaling issues mean that more and more people are engaging with experiences onchain. The infrastructure isn’t evolving quickly enough to keep pace with the rapidly expanding developer ecosystems and consumer use cases. These are good problems. They reinforce that we’re trending in the right direction, building products on the foundation of what consumers want.
Many of my favorite teams are tackling these “good problems.” Companies like Decent and Relay work to solve ecosystem fragmentation by enabling instant cross-chain execution, allowing users to transact with the existing tokens in their wallet. Once Upon addresses data fragmentation for the Superchain by covering and contextualizing transaction data across L2s and L3s, all in one view. And a number of companies are focused on solving ecosystem scaling issues, with teams like MegaETH uniquely focused on enabling real-world use cases that require real-time transactions.
Things can break when you’re building at the edge. I am not arguing that these problems don’t exist; rather, I’m reminding us that they are good problems to have. They are signs of more developers building applications and more consumers using them. The hurdles along the way are part of the journey and an affirmation that we’re moving in the right direction. Let’s continue to embrace and solve good problems.
The materials presented on Gaby Goldberg's newsletter are my opinions only and are provided for informational purposes and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Any analysis or discussion of investments, sectors or the market generally are based on current information, including from public sources, that I consider reliable, but I do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. My views and opinions expressed in any website content are current at the time of publication and are subject to change.
Cover image: Catalan Landscape by Joan Miro