Web3’s Biggest UX Bottleneck: Why Do Users Drop Off at the Mnemonic Phrase Step?

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I wrote my mnemonic phrase on a piece of paper, hid it behind my phone case, and still couldn’t sleep.

When I first used a crypto wallet, the onboarding process was filled with reminders, the most critical of which emphasized the importance of the mnemonic phrase (12 English words).

The system told me: Write them down, keep them safe, and never let anyone see them. If you lose them, your assets are gone forever. And you must store them somewhere other than on an electronic device.

Thinking about the potential financial loss even before I’d deposited any funds — screenshots might be seen by others, saving them on a computer risks a hard drive failure, and emailing them risks hacking — every “secure” option came with a new fear. Faced with these possibilities, I grabbed a notebook, tore out a sheet of paper, copied them down word for word, folded it, and tucked it behind my phone case.

Even then, I was still worried — is this safe? What if I lose my phone? What if someone finds it? What if the note gets wet and the writing smudges?
In that moment, I suddenly realized: the crypto wallet didn’t give me the sense of security I get from a bank; it was just telling me, in a blunt way, “This is your own responsibility.”

Technology is evolving, but the “sense of unease” remains

Over the years, I’ve observed the following:
From the early days of teaching users to manage their mnemonic phrases — “Please write down these 12 words and keep them safe” — to later innovations like MPC and social recovery, and now to Passkey and account abstraction. The direction of technology is absolutely correct — it’s trying to make mnemonic phrases disappear entirely.

But even though the technical direction is right, the onboarding processes for the most widely used products have remained largely unchanged.
I’ve tried several new wallets myself, and most of them still make me feel uneasy by the third step.

Established products are hard to change. But new products can get it right from day one — and that’s where I see the real opportunity for designers.

But technical solutions alone aren’t enough — design decisions are the key

Passkeys, MPCs, Account Abstraction — these technologies can already make mnemonic phrases disappear completely.

But once these technical solutions are implemented, product teams often expose the technical complexity directly on the interface.

They replace one kind of complexity with another. I’ve seen many products turn Passkeys into yet another thing users have to learn.

The truth is, users don’t care whether you’re using MPC or Passkeys. They just want to know: Is my money safe? Can I get it back? Will I make a mistake while using it?

So I believe these three questions aren’t technical issues — they’re design issues.

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My First Decision at Zenfi — Using a Showa-Era Operator to Reduce Psychological Distance

In the concept project Zenfi, the first challenge I faced wasn’t about functionality, but about emotion: How could I make users feel, the very first second they saw the interface, that “someone is here to help me”?

Coincidentally, I came across a photograph — a female telephone operator from the Showa era, standing before a complex telephone switchboard, transforming a tangle of wires into a smooth, uninterrupted call. The user doesn’t need to know anything; they just need to speak.

She embodies exactly what I wanted to convey: someone is handling the complexities behind the scenes; technology is a warm intermediary, not a cold, impersonal system.

At its core, blockchain is also a switchboard.

It’s as if I see my job as becoming that operator.

My Second Decision at Zenfi — Hiding Complexity Like PayPay

In the actual design, I drew inspiration from PayPay— because users already have muscle memory for this type of payment app, and mimicking this process inherently lowers the learning curve.

PayPay’s success isn’t due to technology; it’s because it makes the act of “paying” disappear. Users see their friend’s profile picture, enter the amount, and press “Send.” There are no complex account addresses or confirmation hashes.

At Zenfi, I want to do the same thing. Gas fees shouldn’t be called “gas fees” — they can simply be “transaction fees,” with a brief explanation provided when necessary, rather than using technical jargon to create anxiety. Transactions shouldn’t be “on-chain operations,” but rather “sending money to a friend.”

And what I can do is minimize these opportunities that push users away as much as possible.

It’s not about explaining blockchain; it’s about making users forget it exists

Users never need to understand blockchain. What they need is a sense of security, familiarity, and control.

A designer’s job isn’t to write a blockchain manual, but to ensure that after completing an action, users don’t even realize they’ve just interacted with blockchain.

Just as you don’t think about the clearing system behind it after paying with PayPal. Just as you don’t think about how the operator connected the call after making a phone call.

The best design is one where the technology is invisible.
But I also realize that to achieve this, designers themselves must understand the technology more thoroughly than anyone else.

This is a question I continue to explore.