The Hidden Cost of Ignoring Non-Speculative Users

Every non-speculative transaction—a payment, a game move, a social post—incurs a hidden tax via Maximal Extractable Value (MEV). This makes micro-transactions economically impossible and degrades UX with front-running and failed trades.\n- ~$1.2B+ in MEV extracted annually, largely from DEX arbitrage and liquidations.\n- Non-speculative users bear the cost without capturing any of the arbitrage profit.

Shift from transaction-based to outcome-based systems. Users submit intents ("I want this token at this price"), and a network of solvers competes to fulfill them optimally, abstracting away gas and MEV.\n- ~30-50% better effective prices for end-users by pooling liquidity and routing.\n- Enables viable gasless transactions and batched settlements, critical for mainstream apps.

General-purpose L1s/L2s are insufficient. High-frequency games, social feeds, and global payments require dedicated data availability, execution, and settlement layers. See Reddit's Community Points or Axie's Ronin chain.\n- ~5-10x higher throughput and ~90% lower cost for targeted use cases.\n- Creates defensible moats by aligning infrastructure incentives directly with application logic.

AMMs like Uniswap V3 incentivize mercenary capital, not stable liquidity. This leads to ~80% of TVL concentrated in <5% of pools, causing catastrophic slippage for non-speculative swaps and making real-world payment flows economically impossible.

• Consequence: Volatile, unreliable pricing for stablecoin pairs and long-tail assets.
• Hidden Cost: Protocols cannot build reliable on-chain commerce atop this infrastructure.

By abstracting liquidity sourcing to a network of fillers, UniswapX and competitors like CowSwap and Across Protocol separate execution from liquidity provision. This enables gasless, MEV-protected swaps sourced from the best venue (private pools, on-chain LPs, solvers).

• Key Benefit: Non-speculative users get optimal execution without managing liquidity.
• Key Benefit: Opens the door for fiat on/off-ramps and recurring payments with predictable costs.

Networks like Solana and Arbitrum optimize throughput for speculative DeFi and NFT mints, leading to fee spikes >$10 during memecoin frenzies. This prices out any application requiring consistent, sub-cent transaction costs (e.g., microtransactions, gaming, data attestation).

• Consequence: The network's utility is defined by its worst-case, not average-case, performance.
• Hidden Cost: Developers cannot build predictable business models on volatile base layers.

Protocols like dYdX (on its own chain) and projects leveraging Celestia or EigenDA for data availability decouple their execution environment from general-purpose congestion. This allows for guaranteed block space and predictable ~$0.001 fees.

• Key Benefit: Enables sustainable models for social, gaming, and DePIN applications.
• Key Benefit: Retains sovereignty over stack and upgrade path without forking.

Attempts to force ERC-4337 Account Abstraction on all users add ~30% gas overhead for simple transfers and require bundler/ paymaster dependencies. This complexity is unnecessary for 90% of non-speculative use cases which need simple, recoverable accounts, not programmable transaction logic.

• Consequence: Over-engineering increases cost and centralization pressure on bundlers.
• Hidden Cost: Slows adoption by solving for power users instead of the mainstream.

The right approach is lightweight primitives like social recovery or multi-sig modules, not full AA stacks. Protocols like Safe (multi-sig) and simple EIPs for seed phrase migration solve the actual pain point—loss of access—without imposing systemic cost. Coinbase's Smart Wallet demonstrates this by simplifying onboarding, not transaction logic.

• Key Benefit: Solves the #1 user problem (lost keys) with minimal overhead.
• Key Benefit: Keeps fees low for the 99% of transactions that are simple transfers.