Why We Built Plug.

Why We Built Plug.

381e35

381e35

3/6/2025

#perspective
TLDR: Crypto as an industry holds tremendous potential to redefine how money is used globally, but the requirement of manual transactions in a fragmented ecosystem has resulted in growing inefficiencies with no effective solution today. The introduction of automated strategies accessible in a single click enables users to realize many of the initial dreams of crypto that countless were sold on.
Crypto has the potential to change the way people use money forever.
The ideal world of crypto still feels like a dream. A world where you have real ownership of your money. Where you aren’t resorting to a bank with a 2/3 multi-sig between you, the bank, and government. Where you can spend your money how you please without concern of geographical restrictions or rules. Where you can escape local inflation and find safety in an asset that has more sound fiscal policy without a money printer that constantly dilutes your buying power.
You can boil everything down to: crypto is programmable money that lets people fully utilize their money however they prefer. It's control, freedom, transparency and verifiability all combined into a single financial offering.
In 2021 a shift began, though.
Transaction costs of Ethereum mainnet transactions had become prohibitive. It was very expensive to do even the most basic transactions. Optimizing gas consumption for smart contracts was critical. Without efficient models in place, protocols became effectively unusable.
As Layer 2s (L2s), transactions that post transaction records back to Ethereum, began spinning up the existing users and ecosystem found itself in a place where monetary and operational security was abstracted into smaller selective pieces. But, users could finally transact for fractions of a cent without making compromises on the benefits they gained.
With the continued focus on driving user-facing costs lower the market eventually reached a point of hyper specialization where general L2s became app chains that aim to do one thing very well. Avoiding the value of network effects, protocols began optimizing for the lowest possible costs while introducing new central authority risks, walled gardens, and liquidity fragmentation that negatively impacted everyone and every protocol, including the app chain itself.
At the same time in another piece of the industry, we saw account abstraction take hold. Account abstraction in the form of EIP-4337 had two major goals:
  • Enable new signature schemes that weren't reliant on existing private key mechanisms.
  • Solve the cold-start problem that forced users to have money to pay for gas before running their first transaction.
Many developers and VC firms believed that the biggest user hurdle was how messages are signed and that the need for gas was a significant limiter of adoption. At the same time, we saw millions of dollars pour into passkey solutions that do simplify the user experience by introducing authentication methods native to the device the user is on like FaceId.
Yet, even with the continued growth and adoption of account abstraction, the core user experience did not and will not nominally change outside of being able to log in with your Google account or Device Passkey.

Money as Cash

Still, with all the effort, the user experience largely remained the same and even degraded in several places. You are still required to do everything manually. You still have to choose favorite protocols. You still can't achieve the basic practices of money management like a savings account that generates consistent yield without risk.
In all regards, every single user of crypto has been left to use their magic internet money like it is cash:
  • You must transact in person by clicking buttons one by one.
  • You must pay current market rates instead of being able to unlock the capital efficiency of futures.
  • You must constantly be aware and knowledgeable enough to manage your own finances because financial advisors don’t really exist for this sector.
The most simple things that we have become used to like rent auto pay, automatic credit card payments to cover debts, mortgages that draw from our savings fund on a set basis are not options today. Nothing of this sort exists for crypto at scale and it can’t in the current model due the explicit need for transactions that are signed by private keys or the use of protocols designed for explicit legacy transactions.
Even more drastically, you do not even have the capacity to operate in a market that never closes. Even if you work in crypto there is a zero percent chance that you spend multiple hours a day onchain or even inside the applications of crypto protocols.
You are offline a majority of the day
You are at an inherent disadvantage. Everyone is. The broader ecosystem is being held back at the most fundamental layer by being forced to operate as if our crypto is cash rather than magic internet money as we know it to be.
In the end, so many non-crypto individuals liken the market to a degenerate equities market because in practice, it really is little more than that for most. The foundation for normal users to utilize their internet money like it’s actually digital doesn’t really exist.

The “There’s Nothing to Do” Paradox

This issue is rooted deeper than priorities or user interest though. It’s not uncommon to hear participants of the current market remark that people do not care about decentralization; that all people want to do is gamble. For some, they aren’t far from the truth.
In reality, gambling is the product for many. But, what many often fail to realize is that carrying that belief is a statement of defeat. A perspective only formed through disgust and biased perspective without consideration of what the alternative truly looks like.
Those holding this perspective aren’t wrong, because well, there’s not much a normal user can do to get exposure to the benefits of crypto today. Unless you’re willing to become a psuedo-economist, the learning curve of how to use your money is much steeper than the difficulty ramp of buying crypto and holding it in spot. This is why only 1% of all crypto users use any semblance of DeFi. It’s unapproachable, confusing, and in general much riskier than other alternatives. Especially to people who are not willing to live and breathe the contents of the industry.
You have people trying, the basis is improving, but the experience pattern is still exceptionally subpar. So, the general user strapped with typical equity-market knowledge buys a few tokens, a few memecoins and forgets about it as they sit on their spot position while being completely blind to the real value the industry has to offer them; not really to their own fault.
Even for those that do know, the case is still much the same. When you summarize the general DeFi ecosystem you quickly realize that the majority of primitives today are focused on two things:
  1. Asset acquisition.
  2. Asset utilization.
With so little diversification your options for capital management are extremely limited.
In most situations, users are really just choosing between a brand and the attached incentives that exist outside the base protocol. If the limitation stopped there it could be easily addressed, though.
The deeper reality is that there simply isn’t much to do when everything requires you perform every action manually. Users can't really be glued to their devices at all time. Even if they choose to be, there isn't enough in crypto that provides entertainment to be online 24/7.
For many, there exists no interest in doing research about all the options before deciding where they should use their capital. Even when users finally understand a protocol they have no way of comparing it to the best rates or determine what gives them the best outcomes without having vetted every option available.
As a new market entrant your pool of options is small. Knowledge isn’t implicit, but ignorance is. It takes years to understand the new models in place. Without a close network of people that are deeply integrated it can be weeks until you even discover a protocol that gives you the functionality you are looking for.
Some chalk this up to discovery quality being poor, but really it’s that delivery is poor. Even with a vastly improved discovery process users will not have a vastly improved experience.
A user should not need to know these things or do this work to get the benefit of crypto. Until they can get the benefits without such an extreme level of required knowledge, the market will feel empty and the general consumer of the world will stay far away. Until it as simple as depositing into a bank account and immediately earning yield, there is no hope for real mass adoption.

Billions in Inefficiencies

Without people transacting though, there is a constant lack of liquidity. Coordination of people is difficult. Coordination of liquidity is abysmal. There’s forever several yield protocols offering exceptionally high yield rates as they vie to become a king of the market. Forced to overpay, incentives flow in a way that results in limited growth and parasitic tendencies simply because a certain mechanism has not been capable of securing enough liquidity to function.
Perpetually compared to traditional rates of a bank account, users must make the constant decision if the newly introduced risk by crypto is worth the additional yield.
Today, fragmentation of chains has exacerbated this risk and knowlege issue. Users have more money onchain but that money is less concentrated than ever before. It’s distracted in all the worst ways:
  • It’s spread across several different chains, many of them being fundamentally incompatible with one another.
  • It’s siloed into countless wallets and continues to grow in disparity as embedded wallets continue to be pitched as a major value prop. because now users can sign up with their email.
  • It’s delivered through wallet apps that show a single token across different chains as unique assets because the team can’t figure out how to unify the canonical reference with the social ones.
In every way, using your money onchain today is significantly worse than it was years ago. As an industry a lot of money and labor has been spent, but what benefit did it actually give users that are here today? Effectively nothing.
Because of this, protocols for the most part, operate in a worse ecosystem than ever before. The patterns needed to enable effective operation have disappeared. It is not that the market became competitive. It is not that the protocol isn’t appealing. The fundamental thesis and promise of blockchains and the value of network effects, simply put, was broken. Users aren’t the only ones that suffer, protocols feels that effect even more and this flywheel is accelerated by every investment into a hot new L2 that’s chasing the opportunity to allocate 40% of its token to investors.
It is the money ouroboros of the industry. So, while it feels bad today, it is only going to get much worse if a solution does not become available very soon.

Chain Abstraction

Finally though, there’s at least real conversation about this problem. Primarily in the form of chain abstraction which is a commonly held belief that the path to correction here is one led by the idea that balances across all chains should be utilized as one. For a simple example here:
Chain abstraction money flow
  • If you have USDC on Base, but want it on Arbitrum, you should be able to use that money with ease.
Unfortunately though, this belief is good in nature but exceptionally weak in reasoning tolerance while being exceptionally idealistic. Rather than fixing the fundamental problem, chain abstractions is permission granting to exacerbate the problem and leans into the hideous nature of a system where fragmentation is a systemic issue that’s never properly addressed.
While it seems to track logically, the idea quickly falls apart as you begin to dig into what this direction really means and what it enables. We’ve covered a basic example of the hopeful outputs, but we must consider what benefit, we, the users of the industry, get out of it. In the simplest answer, you get little tangible benefit:
  • Your experience is still worse than it was years ago.
  • Your settlement and transaction times are longer and more error-prone.
  • Your cost of interactions grows significantly now that complexity of even the most simple transactions has been multiplied by many factors.
  • The risk profile grows substantially as you introduce more middle men and non-atomic settlement into the standard execution path.
  • Your ability to utilize the efforts of the last years effectively vanishes as things are siloed into their own ecosystem.
In nearly every single situation, a philosophy of one balance is delivering users a trash experience that has been disguised as a cherry pie with a dollop of whipped cream on top. It is a step backwards covered in a mirage of technical jargon and improvement. It's an idea simple to sell to the non-technical. But, it is exceptionally hard to build around, insanely detached from real-world benefit, and is stuck at square one where you can count those making real progress and improvements on one hand.
The idea that chain abstraction is a solution is especially confusing when acknowledging that leading wallet applications have been stagnant for years after having done little more than copy-pasting the designs of one another with little change or evolution... And users don't easily change the wallet they daily-drive.
Yet, it is a righteous desire. I don't discount them or blame them for trying. There's a group of people working to improve the space with a temporary solution while the long-term one is established. Chain abstraction simply isn't the most direct or realistic path to an improved ecosystem or user experience.

Directionally Correct

So, if we understand the problem to result in a bad user experience and ineffective liquidity management what can we do to improve that? Really, it's simple. It's just highly under-funded and under-developed.
The obvious answer here is enable atomic transaction automation.
In the last few years there have been several attempts to do this. You do have platforms like faviconGelato, but it was made for the highly technical and failed to enable the general end-user. You still have to write code to get any level of functionality while dealing with a much worse user experience. Even more recently they have pivoted and directed their focus away from improving this product. Antithetically too, you are trusting Gelato with the outputs of automation and thus inputs of transactions.
So, not only have users not been empowered with the functionality that brings real improvement to the industry, the only real option also comes with a big set of drawbacks that have made the rate of adoption extremely low. More importantly, the general consumer and blockchain user still effectively has no option to choose from.

Automation Is Not Solved

In the meantime though, a few protocols have risen that claim to empower users with the capabilities of automation. Generally, they are using the word incorrectly and are making a claim that is fundamentally false. Instead, these protocols are really offering increased yield through managed vaults that have a single vault like:
  1. Users deposit into a vault.
  2. The operator of the vault rebalances the position.
  3. Yield is increased due to centralized management.
The user has not been empowered to automate anything. The user deposits into a vault that they have no real control or influence over. Users of yielding-vaults have been empowered with an increase in yield, not automation.
Still today users are left without any real option to create strategies or even to adopt strategies that already exist. Even the most technical developers such as Foundry framework developers struggle to provide this functionality to themselves after having invested hundreds of hours into building a system of their own. Of course, there are MEV bot frameworks that you can adopt, but you are left to do everything yourself.
There is not a single market-accessible automation solution that supports general execution and highly customized strategies without requiring the user to be exceptionally sophisticated.

Our Future

We are here to solve this with Plug.
Plug is the single destination for all your crypto activities in one place. We're not just another wallet or interface - we're building a comprehensive platform that fundamentally changes how you interact with blockchain:
  • Multi-account portfolio management: Unified view and control of all your assets across different wallets and chains.
  • Complete ecosystem composability: Interact with any protocol through a single, intuitive interface.
  • Automated strategies with granular control: Create, customize, and deploy sophisticated transaction strategies without writing code.
  • Reactive runtime transactions with coils: Dynamic data-driven transactions that adapt to market conditions in real-time.
  • Set-and-forget automation: Systems that optimize your positions 24/7 without requiring constant monitoring.
What all of this enables is a set of experiences and features that cannot be found anywhere else in the crypto ecosystem. As we get closer to our public launch, we'll share more details on each of these capabilities and how they work together to create a seamless experience.
It should be clear that we are here to redefine what the typical user experience looks like and deliver automated-enabled features that help you outperform. It's not another piece of infrastructure designed to only be used by 20 companies.
Plug has been a venture of passion built by rethinking every small detail of how you interact with blockchains today. It's been crafted with the hindsight of past mistakes and the foresight of a clear future where humans no longer need to manually execute every blockchain transaction. We've prioritized a user-first mindset rather than a tech-first approach, always keeping your needs and experience at the center of our design philosophy.
The journey to redefining crypto interactions starts here. Make sure to faviconfollow along on Twitter so that you are the first to know as we reach the next steps.
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