Industry stagnation, new user growth has peaked, how can project parties find new breakthroughs?

Original Title: GETTING NEW USERS IN CRYPTO IS HARDER THAN EVER (WHAT TO DO)

Original Author: Emily Lai, Hype CMO

Original Compilation: Deep Tide TechFlow

Crypto marketing is dazzling: from choosing the right channels, to messaging, to team coordination. Should you invest in hosting an event? Do you need to launch an ambassador program? How should the incentives for hackathons be designed? There’s always something to do.

Great marketers simplify processes, create plans, execute tasks, and help you save budget.

Image: An effective marketing strategy can help you clarify seemingly complex situations

However, crypto marketing has become increasingly challenging at this stage.

What exactly is happening?

As founders, builders, and marketers, what can we do?

Why? Here are three reasons: No new users!!!

Reason 1: Increased Competition

The entire crypto ecosystem's chains, infrastructure, and dApps (decentralized applications) are saturated, with every project vying for attention with its own token.

Image: Data source: On-chain data provided by @defillama, dApps and token data provided by @alvaapp

Image: For example, my friend @mumufengg has never used on-chain products (no hot wallet, no exposure to dApps), but his initial experience reflects the confusion of new users

According to @DefiLlama, there are currently over 356 blockchains.

After a talk, I spoke with @cattybk (from @thirdweb), who told me they have worked with over 2000 EVM chains alone. So, I checked the data from @coingecko:

• Over 8700 L1 chains
• Over 5200 L2 chains

In addition, there are:

• Over 1500 AI agents according to @cookiedotfun
• Over 50,000 new tokens added daily according to @pumpdotfun and @Dune

44 narratives tracked by @KaitoAI

The question is, are new users flooding in to support these new chains, infrastructure, dApps, and tokens?

From the perspective of Total Value Locked (TVL), the performance of this cycle is comparable to the previous one, and aligns with the performance of the term "crypto" in Google search trends—search volume is cyclically declining, indicating waning interest from mainstream users.

Even if new users come in, they face hundreds of chains to choose from, not to mention hundreds of wallets. This is more confusing than ever.

Image: Data source: TVL trend comparison shown by @defillama

Image: Google Trends showing global search trends for "Crypto"

Reason 2: Fragmented Target Audience

The audience in the crypto space is diverse, with different motivations for each group, further exacerbating market fragmentation.

· Developers and Builders:

If you are a developer of a blockchain/network/ecosystem, you need to attract developers to build applications that can attract new users.

This requires developer marketing and onboarding guidance. Developers' motivations may include: wanting to realize unique ideas using your tech stack, obtaining development funding, or seeing higher chances of success based on network effects and distribution capabilities.

· Customers and Users:

If you are a protocol, dApp, middleware, or service provider, you need to attract users to generate revenue.

For the ecosystem, dApp teams may be seen as customers.

It is important to note that users do not always align with token holders; sometimes token holders may just be speculators who do not actually use your product.

· Venture Capitalists, Angel Investors, and Other Investors:

These groups provide you with funding, and their motivation is to achieve a return on investment (ROI), usually through tokens, which do not always correlate directly with technology, user numbers, or developer counts.

· Retail and Token Speculators:

These individuals may or may not be your users. Their goal is also high ROI through token trading profits.

· Technical Partners:

These are usually other infrastructure or middleware projects. The demand for blockchain expansion in speed, security, and cost has spawned an entire middleware infrastructure sector, including chain/wallet abstraction, cross-chain bridges, interoperability, modularity, etc.

Additionally, there are service providers, not limited to agencies, but also including blockchain explorers, ad tech, unlocking software, etc.

These partners typically represent a broad audience that needs to be targeted, which is why business development (BD) is so popular in the industry.

· Listing Partners:

Including trading platforms, launch platforms, market makers, intermediaries, and KOL trading, etc. The performance of these groups directly impacts the success of your token, and their motivations are often related to ROI.

· Regulatory Bodies and Institutional Investors:

These audiences can bring significant liquidity but may also lead to your company's failure.

Beyond all these audience types, the globalization of the crypto industry further exacerbates market fragmentation. This means understanding cultural differences, coordinating messaging across different time zones, and managing localized marketing efforts.

All of this makes marketing in the crypto industry more challenging, whereas Web2 marketing is more straightforward, with clearer messaging and more consistent motivations.

For example:

• Selling health supplements: Targeting health-conscious individuals, seniors, and high-income groups.
• Selling winter jackets: Targeting people in cold climates, skiers, hikers, and snowboarders.
• Selling protein powder: Targeting fitness enthusiasts and bodybuilders, excluding vegetarians (if it’s whey protein).

Reason 3: Technology is Not Mature and User Trust is Damaged

According to statistics, since the birth of Bitcoin, the media has declared its "death" 415 times. In addition, the crypto industry is notorious for scams, money laundering, and crime.

Image: Some news headlines about crypto might worry your mother about your choice to be in this industry

In 2021, the boom of NFTs and the metaverse attracted a large number of new users. At that time, many celebrities entered the space. If you were working in the industry then, you might have received many inquiries from old friends.

However, all of this came to a halt with the emergence of issues: high gas fees, plummeting token prices, and painful experiences of user losses. These issues led to a reputation crisis and a loss of trust.

Mainstream users left the market, and we entered a building (bear market) cycle, while also welcoming thousands of new chains and middleware.

Image: The industry's focus swings between "we need more applications" and "we need more infrastructure." (Inspired by @jillrgunter's visualization)

So, why are you still here?

I don’t know, please take a deep breath, calm down, and tell me your reasons (I genuinely want to hear your story, which is also important for your marketing).

For me, I fell into the "rabbit hole" of Bitcoin in my college apartment in 2013 because I loved its values of sovereignty and self-sufficiency.

Since then, I have also seen cryptocurrencies widely used in places like Argentina, Indonesia, and Turkey.

For example, I primarily survive on crypto stablecoins in Buenos Aires, Argentina, to cope with the rampant inflation there:

Additionally, many companies are using blockchain technology and abstracting it completely.

Shoutout to @benLLS from @octantapp, who mentioned @jia_DeFi, a company that helps emerging markets unlock capital and opportunities, and Hala Systems, which aims to reduce harm, enhance safety, and stabilize communities.

There are also companies like @bombocommunity that ensure the security of music ticketing through NFTs while abstracting crypto language. @cattybk also mentioned some blockchain-based casual games that are acquiring users massively outside of crypto Twitter.

Moreover, @mariashen (from @electriccapital) releases a developer report every year. Although the number of developers has decreased compared to the previous cycle, the overall number of Web3 developers is still growing, indicating that we have not attracted net new users.

The reality is: Despite 16 years having passed, we are still in the early stages

Image: Classic chart of early adopters from the book "Crossing the Chasm"

We have crossed the chasm, and the mainstream market with high-risk tolerance has accepted Bitcoin and views cryptocurrency as an asset class.

But we have yet to convey to them why we need thousands of blockchains, let alone an application that allows them to use it daily, surpassing Instagram, Temu, TikTok, WhatsApp, or ChatGPT (the adoption speed of these platforms far exceeds that of the crypto industry).

What does this mean? Are we not building what people need? Or… is it just not mature enough?

I believe there are many kind-hearted individuals in this industry willing to drive social progress. I know some of them. For example, @vijaymichalik, @arlery, @motherpredicte, @divine_economy, @alipaints, just to name a few.

If you are building the crypto industry with good intentions, what marketing fundamentals do you need to master and apply?

These are two slides I often show in my talk "What is Marketing," which basically condense marketing strategy into four words.

You can see me elaborate on this in the video I did in collaboration with @modenetwork: Click to watch.

Additionally, there is a version shared at the last India Blockchain Week (@ibwofficial), mainly discussing the background of founders/personal brands, using @megaeth_labs as an example: Click to watch.

Three Key Tips for Acquiring Crypto Users

The crypto space has seven types of audiences spread across multiple geographic regions. Additionally, your internal team members (business development, product, marketing, creative, legal, etc.) also need to collaborate.

In one of the AMOS series by @moremarketsxyz, hosted by @xkonjin, I participated with @reka_eth, and we invited @jaambutties (CMO of @nillionnetwork) to share how he coordinates brand activities.

This coordination allows all stakeholders to get involved, amplifying your marketing efforts and helping to break through and capture the scarce and valuable attention in this field.

Ultimately, because the technology is still in its early stages and the industry is extremely saturated, we do need to do some things that cannot be scaled. This includes onboarding newcomers one by one, engaging personally, and educating them.

While I love showing @pumpdotfun to friends who have never been exposed to crypto, I also have to give great credit to @a1lon9:

What’s even better?

To break the distraction of attention, you need consistent messaging and content output to stay relevant.

This is why founders reply to tweets, why they participate in AMAs (Ask Me Anything), and even now appear in live videos.

This is also why teams record during events.

Engage in conversations with users, developers, investors, and customers, and tell their stories.

At the same time, you can gain valuable product feedback.

My friend @shayyydz chose her first crypto wallet. At the time of writing, this post received 5200 views because she chose @rainbowdotme.

Finally, if you are a founder or builder—this is the most important thing:

Let’s return to the earlier question, "Why are you still here?" and do some self-reflection.

No one knows your "why" better than you. Tell us why you are building, why it matters. These stories are not only the vision you convey to your team but also the core content for recruiting new members, attracting investors, and building community.

Repeat these stories continuously and try different content formats.

Thank you for reading this far. If you are willing, please also share your story with me.