Notes on Consumer Crypto | Aug 3, 2024

Welcome to my weekly consumer crypto-focused braindump of things I'm thinking about and have bumped into during my internet travels.

Here's what I found interesting this week...

There’s been an ongoing debate in the farcaster world about whether Dan and team should be actively marketing the product beyond crypto. Dan has continued to be strongly against the idea, but it seems most of the farcaster community is very for it.

Dan’s argument is that non-crypto audiences have no reason to use Farcaster in its current evolution and are well served by existing at-scale social networks. The strategy they’re running to justify the $1B valuation is to grow with crypto for the next 10 years and create more developer legos in the hopes that others can build breakout experiences and strengthen the network effects of the protocol.

There’s a thread here from a few days ago where Dan is talking through it, but it really just boils down to the age old crypto conversation; Crypto people really want more non-crypto people to come (for social and business purposes), but there’s not enough here for them yet.

It’s pretty easy to agree with Dan here on marketing not being their problem. Marketing farcaster broadly when it isn’t even used by most crypto people is a path to nowhere. If I were them I’d be entirely focused on figuring out how to get partially active crypto-native users (me) more active, and how to attract the Solana community. 

If they can’t figure that out the grow with crypto strategy won’t be effective. If I’m not using the product everyday as a deep crypto participant with a strong crypto social graph then it’s hard to see\ how a new entrant gets there. 

But they’re a world class team so excited to watch them navigate this. It’s funny how easy it is to love and not love farcaster as the activity ebbs and flows, but that’s the way it goes in consumer social. The people that are there are the product, and if the right people aren’t there there is no product.

Last week I talked about wedges, the importance of having a well defined target audience you can go own and uniquely serve on the path towards a larger market, and some examples of historically successful ones.

This week Alana from Variant dropped a good thread outlining some tactical things founders did to get distribution into their wedges. Two core strategies from the examples she and others in the replies shared stand out.

The first is to go and meet your target users where they are. Portnoy of Barstool stood on street corners, Paypal got into the eBay checkout flow, Blackbird got into restaurants, Tinder went to school campuses and played the sororities and fraternities off of eachother, Airbnb activating around the democratic national convention.

The other is creating unique and viral content that is broadly entertaining that your target users will naturally stumble across. The Michelin restaurant guide, Twitter projecting the news feed at SXSW, Blendtec videos seeing what ridiculous things will blend.

The more you spend time studying how the breakout products of the past got their early attention and usage, the more you realize how much better we need to do with distribution tactics into well defined wedges in consumer crypto.

I also haven’t talked much about my time at Hopper (was one of the first hires and helped scale it to 10M+ MAUs and 500+ employees) but we have a good wedge and distribution story from the early days. 

We started out as a travel search engine that wasn’t really working that well, but were capturing huge amounts of historical flight price data because we figured it would be useful. At some point our data science team realized they could very accurately predict the price trends of flights to any destination for any given set of dates and tell people the right time to buy. 

It was almost american thanksgiving so we ran our prediction model for some popular US destinations and went after getting a bunch of press around them. People went crazy for it and it drove a massive amount of traffic to our site from people looking for more. 

There was no more, it was still a travel search engine, but it was very clear we were onto something and we pivoted the entire business towards a prediction-based flight booking product serving price sensitive anxious travelers as our wedge.

Last thing I wanted to call out here was this Uniswap collaboration with Kid Super. I have a deep belief that crypto is cool as fuck, so much cooler than anything that exists on the web2 internet, and the rest of the world is inevitably going to realize it. We just need more people actively telling the stories of what’s happening here in accessible and culturally relevant ways, and this feels like a great step in that direction. 

I just want to expand a bit on a tweet I wrote this week about my conviction that the first round of killer consumer crypto products will all have speculation and financialization at their core. My thinking is that the ability to speculate on anything, or create financial games around anything, is by far the most tangible and differentiated unlock of blockchains, and that’s where all the immediate greenspace opportunity is.

Things that are entirely content or social focused and use decentralization or interoperability or uncensorable content as a value prop just largely end up feeling like worse experiences than their web2 counterparts today. I do think that eventually changes once more people have meaningful web3 identities, but we’re not there yet and it’s going to be financialized products that ultimately make that happen.

This can probably sound narrowing but I think it’s actually wildly expansive. Prediction markets, gaming, DePIN, NFTs/Memecoins as social / identity primitives, art, payments, full stack brands, the list goes on. I think there’s a speculative or financial wedge into basically every consumer category that exists in web2, and obviously many entirely new opportunities. 

There’s so much to build here, and as Peter beautifully laid out the timing is perfect to do it. User acquisition is cheap, competition is limited, tons of people want to help you succeed, and the opportunity in verticalizing the whole stack if you can get meaningful attention and adoption is immense.

Embracing speculation will be rewarded.

There was a chaotic new implementation of a memecoin launchpad this week that let anyone launch a memecoin from a single tweet. You just have to tweet a ticker followed by words for a description and finish with tagging the Make Now Meme account.

Inserting memecoin launching directly into the distribution channel where the attention and social contexts exist is crazy, and it quickly got tested out by some big names like the Nansen founder and the Raydium account.

I don’t see this necessarily being a mainstay in the memecoin stack, but it’s a great drop that they probably whipped together in a day and have made $60k of revenue in the 2 days since launch.

More experiments gud.

I like this framing by Jarrod that crypto’s unique ability is to facilitate consumer to consumer experiences and business. We talk a lot about moving from an era of just building things people want into an era of building things people want to be a part of, and creating real communities where your users are serving each other is how you do that.

There’s rampant loneliness and lack of meaning caused by the breaking down of local communities and social institutions. The opinionless, sterile, and extractive web2 platforms have only made this worse and people increasingly want to feel seen and find a sense of belonging in the things they use. 

Maybe cringe to say, but think crypto can help combat this. People are finding belonging in Sanko, and Berachain, and Solana, and memecoins, and the real peer to peer nature of them is a core part of that. 

Traditional brands will not be able to compete with the sense of belonging and participation that token brands will be able provide.

Smort announced a lossless prediction market on Solana this week that sounds very cool. They’re using Sactum (a protocol that allows anyone to create custom liquid staking tokens) to create a 100% commission LST called smortSOL and the yield all goes into a weekly prize pool.

People can then play the prediction game with their smortSOL and if they get it right they earn their share of the prize pool.

So the worst case scenario is you’re wrong and you forgo your LST yield, and if you’re right you earn boosted APYs depending on the % of others that were also right.

This is cool. It’s like Pool Together but with a fun prediction market game on top instead of it  being just a pure lottery. It’s also similar to Karate Combat’s no loss betting where token inflation is used to reward winners instead of staking yields.

A very small percentage of the world are degenerate gamblers so there’s a lot of opportunity to create experiences like this that tap into the fun and upside of speculation without making people risk money.

I talked about Jesse’s tweet from a few weeks ago where he highlighted things he’s excited about, and this week Variant dropped a post including things from the rest of their team.

It’s worth scrolling through, but here are a few of my favorites:

• Mobile becomes the default

• Surprising formats for prediction markets emerge

• Real skin-in-the-game returns to token distributions, resulting in more loyal/engaged users/owners

• DePIN onboards people to earning their first crypto

• The breakout AI x Crypto use case is community owned and trained models

And a few I’d add to the list:

• Memecoins, NFTs, and DAOs meet somewhere really interesting

• There’s an entirely new evolution to the memecoin meta

• There’s a breakout consumer product that got incubated on college campuses

• There’s a new hot vertical-specific, social, mobile prediction market product

• DePIN gets a new name and becomes more fun

thanks for reading

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