Future Needs Drive Blockchain Development

According to Foresight News, the latest Messari report by analyst Kinji Steimetz delves into the trends of chain abstraction. This summary highlights the core content of the report, emphasizing the importance of timing in the development and investment in the cryptocurrency industry. Building with a long-term vision means betting on future scenarios unfolding as predicted, focusing on future needs rather than current ones. Chain abstraction has fallen into this 'endgame' narrative: users want better cross-chain experiences and aggregated liquidity (current needs), while they also desire protocols to decide which chain and application to use (future needs). The report argues that we are far from the stage where users want protocols to make these decisions, aligning with the short-term outlook on blockchain abstraction (2-3 years). Currently, 90% of DeFi activity is concentrated on seven blockchains, with Ethereum, Solana, Base, and Arbitrum accounting for 75%. This indicates a clear user preference for specific blockchains, largely due to limited cross-chain token deployment. Users choose blockchains based on token availability, making chain abstraction unnecessary for deciding which chain to use. To popularize and succeed in chain abstraction, more cross-chain token deployments are needed, allowing solvers to determine the best chain options. The dominance of certain applications is partly explained by limited cross-chain token deployment but also by the similarity of most products in the market and the limited on-chain operations available. Users typically choose the largest protocols, and without more diverse and differentiated applications, there is no reason for users to outsource their decisions to protocols. If diversity increases, users may need to conduct more research to find suitable applications. In the next two to three years, chain abstraction may develop in several directions: 1. Cross-Chain Bridges and Messaging: As more applications integrate cross-chain messaging, the growth of cross-chain bridges will slow, reducing the need for users to transfer assets between chains. 2. Intent-Based Applications: These applications can operate normally as long as service prices are competitive. With limited application diversity, solvers will compete more on speed and price rather than handling complex multi-protocol operations. Users already know which applications they want, so application decisions do not require solvers. 3. Messaging Becomes a Commodity: With fewer major ecosystems, cross-chain messaging protocols may become commoditized, competing on price and security, limiting their ability to establish strong network effects.