Blockcamp Brief (Issue #4)

Web3 On-Ramps

Sorry for bailing on the newsletter last week - I had one in the works, but then life stuff came up, as it does. You haven’t experienced hell until you’ve solo-parented a 3 year old with strep for three days 🤪.

But now we’re all back and feeling better than ever, so let’s get into it!

🔦 Spotlight

Coinbase’s ETH L2 Solution, “Base”, launched Aug 9th.

Web3 On-Ramps

Any technology is only as good as the extent to which it positively impacts people’s lives. A cure for cancer won’t change the world if it can’t be reproduced or it’s outrageously cost-prohibitive for all but the extremely wealthy.

At the moment, crypto suffers from a different problem that it’ll have to surmount if it’s to leave its mark on the world: adoption.

As novel and revolutionary as the underlying technology is, there remain significant impediments to getting people to use it in the first place. And if normal people aren’t using crypto in their day-to-day lives, no web3 strategy will move the needle for us as marketers, regardless of how ingenious it may be.

The barriers to widespread crypto adoption are many, although some are more valid than others: security concerns, data privacy, energy consumption and environmental impact, regulatory ambiguity, volatility of the underlying assets themselves, technological complexity, high transaction costs, poorly designed UXs…. I could go on.

It’s for this reason that you’ll often hear folks within crypto parroting that we need a “killer app” to serve as the web3 on-ramp to drive adoption by the masses. This common refrain is optimistic, but also naive, for it’s highly unlikely that there will be a silver bullet of an app that will magically take crypto from zero to one overnight.

Instead, it will takes tens—perhaps hundreds or even thousands—of killer apps, one after the other, to drive meaningful adoption. And rather than the hockey-stick growth many are hoping for, we’ll likely see a steady grind up a similar adoption curve to what we saw with the internet over the its first 15-20 years as a consumer technology.

Source: Pew Research, US Internet Adoption. 1995-2011.

Contrary to the prevailing narrative in my head (and perhaps yours as well?), every person on the planet didn’t rush out to buy a PC the day after chat rooms and AIM were invented. Rather, it was a steady cascade of genre-defining apps, one after the other, that collectively contributed to getting us where we are today with the majority of people on the planet (~60-65%) now regular internet users: Netscape browser and Yahoo (1994), Amazon / Craigslist / eBay (1995), AOL Instant Messenger (1997), Google search (1998), PayPal (1998), Napster (1999), MySpace (2003), Facebook (2004), Google Maps (2005), YouTube (2005), the iPhone (2007), Instagram (2010), Snapchat (2011), MineCraft (2011), TikTok (2016), Fortnite (2017), Dall-E AI (2021)…. you get the point.

It’s because of all of these and many others not listed that a technology like ChatGPT (2022) can come along and enjoy the fastest user growth of any consumer application ever, acquiring more than 100 million monthly active users within the first two months after its launch. Had ChatGPT been (somehow) released in, say, 1995 or even 2005, it’s unlikely to have seen such rapid adoption, despite how truly revolutionary the technology is. The grounds just weren’t fertile enough for it.

Fortunately, we’re seeing a number of encouraging developments in crypto as of late, each of which should be viewed as a small but meaningful step forward on the path to adoption:

  • The world’s largest crypto company, Coinbase, just launched their Layer2 chain, Base. Built on top of Ethereum, Base promises to provide faster and cheaper transactions, improving scalability and efficiency.

  • Many of the world’s largest funds, including BlackRock and Fidelity, are currently awaiting Bitcoin ETF approvals from the SEC. If green-lit, every American would instantly be able to invest in Bitcoin through their tax-advantaged retirement accounts, while also removing the need to learn the complicated process of how to self-custody.

  • PayPal launched their own $USD stablecoin, $PYUSD. Backed by US dollar deposits 1:1, this is a critical step to allowing consumers, merchants and developers to seamlessly connect fiat and digital currencies. PayPal has the scale (29 million merchants) and partnerships in place to unlock millions of dollars in crypto settlement volume virtually overnight.

Now, will any of these be THE “killer app” that some are crying out for? Probably not. But they also aren’t nothing.

So we march forward, one foot after the other, and steadily climb the hill…

👊 Quick hits

  • If you know someone (or are yourself one) who struggles to understand how NFTs can be valued as they are by many today, this piece by Holladay Saltz is a good place to start ) – Digital objects, economies, and the challenge of meaning: a beginning.

  • Speaking of Base, the talk of the crypto world this week has been the SocialFi app Friend.Tech, which apparently already did more than 100,000 transactions in a single day after launching on Coinbase’s new chain. The tokenomics embedded into the makeup of the app itself are not without flaws, but shine a light on the potential that proper incentive design can have on bootstrapping growth of a new app. I may spotlight this in more detail next week if I can properly wrap my head around it all.

  • Andreesen Horowitz (a16z) continues to publish great content in their Crypto Startup School series – recommend browsing through and seeing if anything piques your interest. This one by Amanda Cassatt is particularly relevant for us marketing folks.

  • One of the Onchain Summer Base mints was “Masterpiece” by Coca-Cola, where they enlisted web3 artists to reimagine their iconic bottle inspired by classic paintings. Frankly, it feels pretty uninspired and lacks any real tether to a broader campaign by Coca-Cola, but interesting to see mega brands continue to dip their toes in web3.

  • Business of Fashion published “How Fashion NFTs Fizzled”. It turns out that if you launch something whose entire value is tied to its utility and cultural currency and then completely abandon it, it will lose value.

  • Protocol Protocol Protocol. Just click and watch.

  • In metaverse news, Lamina1, the metaverse-focused layer-1 blockchain backed by the “Father of the Metaverse” himself, Neal Stephenson, launched its betanet earlier this week.

  • Related: a new study by Bain suggests that the metaverse could become a $900B industry by 2030, even as the hype of 2021’s bull market is now a distant memory.

🐦 Social Musings

🔨 For your toolkit

I wrote last week about the comparatively lighter funding and activity in the web3 ad network space, but Slise is one of the leading players operating here. Their primary value prop is that they enable web3 brands to target crypto-native users, utilizing on-chain data to inform their audience targeting. For instance, if you’re Louis Vuitton, you could target holders of Gucci Grail NFTs and serve them ads for your upcoming drop on any publisher in the network. This is a fairly simple example, but the possibilities for creative targeting are only widening as the web3 user base grows and the on-chain data becomes richer.

🌐 Web3 Marketing Roles

🔗 Let’s Link

That’s it for today! Be sure to follow Blockcamp on Twitter and subscribe to the Blockcamp newsletter if you haven’t already. I’d truly appreciate it if you’d share this with any of your friends who may find it valuable as well 💚!

Until next time….