Sign CEO: Telling Stories That Everyone Can Understand

Author: Xin Yan, Co-founder and CEO of Sign

In a few months, Sign will turn four years old. Time flies; we have grown from a simple hackathon idea into a team with multiple business lines, with revenue and funding both exceeding tens of millions. We have witnessed our own changes and growth in the industry, during which we burned millions of dollars iterating on products in search of PMF (macro-wise, venture capital funds have also invested hundreds of billions to find PMF for crypto). Today, I mainly want to write about the changes and perspectives we have personally experienced.

Around 2018, when I entered the space, the crypto community was very Cypherpunk, eager to learn about cryptography, blockchain consensus algorithms, the performance of different virtual machines, and so on. At that time, we believed that the main reason crypto had not achieved large-scale applications was due to inadequate infrastructure. Later, around 2021, we had many fast and cheap public chains available, and the main narrative in the industry shifted to the Web3 revolution. Web3 is the next generation of the internet, where we aim to reconstruct the entire network on the blockchain (our first application, EthSign, also started with this idea). This idea is radical and straightforward: we rebuild all applications using the blockchain's standard (public and private key) system, turning many SaaS into protocols while providing free and reliable services to users worldwide.

However, in reality, the adoption of Web3 has not been as fast as we imagined. Personally, I have not seen my friends outside the circle continuously onboard to Web3 over the past few years. For startups in this space, the best outcome is to find loyal users within a small community (currently, the main users of EthSign come from Indonesia, Turkey, and Nigeria, countries where the adoption rate of electronic signatures is low but crypto-friendly), while many have already given up their ideals and been acquired by Web2 companies.

The adoption of Web3 and crypto has not gone as smoothly as expected, and I believe there are the following reasons:

1. No new functions or user experiences have been provided. Most Web3 products attempt to replicate the features of Web2 competitors while emphasizing security and privacy. However, the reality is that most users do not care much about data privacy or do not trust laws and regulations.

2. The most basic data in the entire industry, the number of wallets, has not grown exponentially, limiting the network effect of Web3. Although both email and crypto wallets are anonymous electronic identities, users still prefer the former because it is more familiar to them.

Web3 demands users to take responsibility for everything from the start (they must remember and keep secret 24 words) without providing a user experience that is ten times better than existing applications, new features, or sustained significant economic incentives, which inevitably scares off novice users who are just looking to get onboard.

Mnemonic: If you show it to someone else, you will lose everything!

3. Compliance. Essentially, the capabilities offered by Web3 are ahead of the existing systems and struggle to gain regulatory support. For example, we all know the value of peer-to-peer transfers worldwide, but this easily achievable function does not fit well with the current mainstream anti-money laundering frameworks, making crypto payments difficult to integrate into mainstream applications.

Since our attempts to hard sell/fomo the entire world to onboard Web3 have failed, we should choose a more conservative and gentle approach, wrapping Web3 into different concepts and creating simple, easy-to-use products. The most successful examples this year share this commonality:

1. Bitcoin ETF. It is far from Satoshi Nakamoto's original vision, but it has effectively brought Bitcoin into mainstream society. The controversy surrounding this issue reminds me of the problems of adapting excellent literary works into films; there will always be people who say that the film adaptation loses the spirit of the original work. However, objectively speaking, adaptations lower the barrier to entry, allowing a more mainstream audience to engage with the original. The Bitcoin ETF alleviates many issues for traditional capital, such as custody responsibilities and investment category restrictions, truly bringing Bitcoin into the mainstream.

2. TON. TON is the native blockchain of the Telegram ecosystem and is an important part of Telegram's goal to become a global super app. Telegram's users are scattered across different countries, and the cost of establishing partnerships with all banks, similar to WeChat Pay or PayPal, far exceeds the cost of running a blockchain. As long as Telegram users can onboard TON, peer-to-peer transfers can be easily realized. However, the first ecosystem project to achieve large-scale onboarding was not DeFi or NFTs, but an application with just one button, Notcoin.

Notcoin has only one huge button

Notcoin is an application that requires no documentation or introduction; users only needed to tap their fingers to receive Notcoin airdrops in their wallets early on (Notcoin transitioned into a traffic distribution platform after TGE, directing traffic to other ecosystem projects). Notcoin opened up the "tap coin" track, bringing tens of millions of users into Web3 with minimal user education, allowing them to have interest-bearing USD stablecoin accounts.

TokenTable is honored to serve most TON ecosystem projects, helping them distribute tokens to users and providing us with our main source of income this year. The success of TON represents the most successful mass onboarding in crypto history, with twenty million addresses created within three months. However, because most users come from Eastern Europe, the Middle East, and Africa, it has not received enough coverage in the US-centered crypto world.

3. Pump.fun. Pump.fun may be the fastest company in the world to generate one hundred million dollars in revenue. It allows anyone to quickly and easily create a memecoin while preventing early rug pulls. This platform has brought memecoins from the margins to the mainstream, making memecoins a new way for users to participate in predicting mainstream event changes or capturing various traffic values. I don't have data, but many of my friends who recently joined crypto bought memecoins on Pump.fun as their first application.

Over the past year, I feel that the opinions of my friends have diverged into two distinct camps, or rather, fled to both ends of the IQ curve. One camp, with an IQ of 150, remains obsessed with discussing how to build the infrastructure for large-scale applications faster and cheaper, while the other camp has given up on doing anything, believing that any product or even webpage is redundant, and that only CA matters.

We proudly and bravely sit in the middle of the curve, packaging new technologies into simple products, striving to connect more closely with the real world and gain funding and traffic. I believe the industry has moved past the era of selling concepts; the vast majority of people already understand crypto but lack blockbuster applications to onboard them. We are in a time window for mass onboarding; the infrastructure has been established, and the future will resemble the application era of the internet. Entrepreneurs need to find the right angles to attract and retain users.

This realization has been painful. Earlier this year, we launched Sign Protocol, an omni-chain attestation system. But as you might ask, what is attestation? This is a technical concept that takes us five minutes to explain. We wanted to establish standards for on-chain proof and data verification, but most of our time was spent explaining technical concepts. So in the second half of the year, we began promoting applications based on Sign Protocol, such as the on-chain verifiable ID system we created for Sierra Leone and ZuThailand, and TokenTable, which distributes and unlocks tokens for users. This actually promoted the adoption of Sign Protocol. We learned a lesson that seems laughably simple in web2: Sell functionality/experience/service, not technology/standards.

Sign Protocol's npm download volume: We did not promote it in the second half of the year, but the data is still good.

We are not a team satisfied with just creating demos to validate feasibility; we genuinely want to drive our products to be used by tens of millions of users and change their perceptions of crypto. We will aggressively collaborate with the traditional world (which is not as traditional as it seems) to seek to bring already digitized information and trust into the barren world of chains. Cyberspace, while independent, is not isolated from the real world. Over the past few years, we have witnessed the developmental bottlenecks of purely on-chain native projects due to insufficient data, information, and applications on-chain. For example, on-chain lending struggles to develop because it cannot utilize users' credit systems from the real world, always requiring excessive collateral from users.

In the future, we will focus on mass onboarding, using the latest technologies (mainly zk) to allow more users to easily use crypto and enjoy its conveniences. Our new products will address the most fundamental issues: identity and trust.