Still a complete disconnect between promotions in web3 and their true on-chain value-add
It is probably an understatement to say that 2022 has been rather turbulent for the crypto space: There have been both all time highs and severe crashes, e.g., 3AC and FTX. For Attrace, these crashes are both bad and good.
Bad, because some of the large future Attrace partners and potential investors are now out of business or in survival mode, with some investments delayed while others cancelled altogether. While there are still plenty of partnerships in the pipeline, this turbulence has inevitably led to delays.
Good, because the turbulence should encourage the crypto market to become more rational, with both retail and institutional crypto stakeholders realising the cost of departing from the core fundamentals of web3:
- Decentralisation;
- Full transparency;
- 3rd party verifications.
It is worth noting that there has not been a DEX with similar problems that are now being experienced by various CEXs.
Critical mass to prioritise true web3 fundamentals
The main driver behind the crashes has been a wake-up call for a large segment of crypto stakeholders. However the Attrace team believes, and some might disagree, that this group is not large enough yet — we have not hit the critical mass of crypto stakeholders that will prioritise only true web3 fundamentals. Arguably, the majority of investment power, both retail and institutional, is still mainly focused on short term yield, insufficiently grasping the critical importance of core web3 fundamentals.
Vanity Metrics
Currently, users in general seem indifferent if a platform/project is decentralised or centralised, or how governance and tokenomics work. The emphasis, even after the crashes, still seems to be around the question “when will prices pick up again”.
As a result, this also means that, as of today, there is still a lot of emphasis on what the Attrace team likes to call Vanity Metrics: Metrics that for some reason are given a lot of value, but bottom line do not say a lot about true on-chain value-add. Vanity Metrics can be manipulated and are for many projects solely important to drive hype. Examples are the number of social media followers on Twitter, Discord, Telegram and, even to a lesser extent, trading volume. The conventional crypto wisdom still seems to have accepted these metrics as more authoritative and forward-looking than actual true on-chain value-add itself!
Which brings us to perhaps a flaw in the strategy of the Attrace team. The Attrace team believed that at some stage in 2022 more rational marketing behaviour would kick in, that for example crypto projects and buyers would start to realise:
- Not your keys so not your tokens!
… and that crypto marketeers would start asking questions like:
- What is the real added value of focusing on more Telegram, Discord or Twitter followers?
- To what extent does fake trading volume really add value to my project, taking into account that creating trading volume also involves costs?
Everybody is still behaving the same. It is all about Vanity Metrics. As a result, as of today there is clearly a complete disconnect between promotions in web3 and their true on-chain value-add.
Web3 marketing strategy will evolve
Now that we are in a bear market, you would expect that web3 projects will become more critical about their marketing strategy, which means looking at two points:
- Marketing skills required: The Attrace team has had meetings with over 250 projects over the last 18 months, and concluded that a lot of the marketing managers of crypto projects are in most cases very good social media managers, but have limited knowledge about true online marketing tech and the online marketing metrics that really matter if you have real traction targets (e.g., attribution analysis around true on-chain value-add).
- Secondly, sooner or later it will become best practice to look at the true on-chain impact of marketing spend.
The Attrace team is patiently waiting for that moment to kick in. Because when it does, Attrace will be the go-to app able to facilitate performance based marketing for assets and services sold in a truly decentralised environment.
Eventually people will realise that we need marketing for web3 that is based on web3 fundamentals.
Looking forward to 2023!
(E. Werring)
About Attrace:
Attrace protocol is capable of connecting referral links (via social channels, websites, cross-chain and the Metaverse) with true activity on a blockchain (e.g., buy and hold crypto or NFTs via a DEX, or engage with a DeFi smart contract like a lending protocol). The solution works via creating a three party relationship, between public wallet addresses of Project, Promoter and Buyer in combination with a Network of Oracles that can “observe” any asset on a blockchain.
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