10 Challenges Facing Web3 That Could Unlock a New World Once Overcome
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10 Challenges Facing Web3 That Could Unlock a New World Once Overcome
These issues require proactive re-examination.
Navigating Web3 tides with focused insightsSource: cryptoslate
Translation: Blockchain Knight
The crypto asset space is currently fascinated with generative artificial intelligence and the concept of "agents," supposedly powered by crypto asset "rails" and coordinated via on-chain smart contracts.
This isn't a good path forward, for a simple reason: We cannot build agents on top of large language models (LLMs), which are essentially shifting sands of randomness.
LLMs can play a role in creatively generating ideas and content—such as code—but that same creativity manifests in potentially malicious behaviors, namely deception.
Additionally, discussing quantum computing—specifically, moving toward post-quantum cryptography and "future-proof cryptographic protocols"—has become fashionable.
The elliptic curve cryptography currently in use does indeed carry risks.
However, most remaining attack surfaces are at best threatened only by polynomial-scale advances, and the arrival of quantum technology may simply raise all boats.
The key point is this: Practical, real-world quantum computing is still decades away.
While we're distracted by these shiny new developments, core design priorities, choices, and trade-offs continue to rust and risk becoming merely "good enough," when they should instead be actively re-examined.
Below are 10 such areas:
1. Social Consensus. If anything in the crypto ecosystem feels outdated, it's the notion of "social consensus." Social consensus is how so-called community leaders manage their tribes; it has no place in crypto protocols in 2025.
2. On-Chain Governance. Following social consensus, what happened to on-chain governance? Was it too hard? Have we just given up? And yet, we believe we can govern AI agents on-chain?
p>3. Miner Extractable Value (MEV). Is it now acceptable for miners and block proposers to extract revenue by manipulating transaction ordering, exclusion, reordering, or alteration within blocks?4. The Oracle Problem. Has it become conventional wisdom that the oracle problem is an economic rather than technical issue? Was this an unintended consequence of the shift to Proof-of-Stake? Doesn’t this slide us back toward pseudo-centralization?
5. Centralized Stablecoins. Speaking of centralization, aren’t centralized stablecoins essentially lightweight CBDCs? If the wheels of crypto are lubricated by private, centralized stablecoins, why maintain a double standard against private central banks?
6. No Such Thing as a Settlement Layer, nor such thing as L1s and L2s. Any chain—including so-called L1s and alternative L1s—can become an L2 of another chain by publishing ledger data and deploying bridging contracts. We must stop creating confusion and clean up our terminology.
7. Privacy. At some point, we lost sight of the necessity for privacy protection. Perhaps the concept of "privacy pools" is exactly how crypto protocols can finally balance regulatory compliance with privacy.
8. Rollups. In reality, rollups are mini-blockchains. Unfortunately, rollups have largely been neglected and suffer from numerous issues: from multi-sig rug pulls to centralized sequencer MEV and censorship resistance (CR), and everything in between. We need a comprehensive cleanup of rollup terminology and execution semantics.
9. Centralized Ledgering and Block Building. With the advancement of Proof-of-Stake, we face increasing centralization. As private order flow dominates, resistance to censorship is increasingly undermined. This brings us back to square one: where do permissionlessness and trustlessness go? Or do we simply not care as long as the numbers grow?
10. Public Goods Funding. Rising digital assets bring persistent challenges in funding public goods. Crypto protocols play a unique and meaningful role in financing public goods—an opportunity that remains critically important. We must remind ourselves that this is a top-priority backlog item.
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