Web 3 Growth Hacking in a nutshell

Web3 growth hack

For every Spotify, there is an Audius, for every Coinbase, there exists a Uniswap and for every Etsy there are platforms like OpenSea.

If it wasn’t clear by now, web3 applications have grown tremendously over the last few years and are decentralizing all aspects of the internet. Though the concept is still in its nascent stages, it has proved itself promising. The global blockchain market size is expected to reach $39.7 billion by 2025 and the sector observes 20k monthly active developers as of Dec 2022.

Even the quality of users in the space is very high. For example, as of Q2 ’22, Uniswap did 76% of Coinbase’s trading volume with just 12.48% of its monthly transacting users. Imagine the kind of volume that Uniswap could experience if it reaches Coinbase’s user base.

However, for Uniswap to reach that kind of a user base is a bit of a challenge. Why, you ask? Because web3 is still trying to figure out how to growth hack their products and that is exactly what we will figure out today.

What is Web3 Growth?

Well, the idea itself is no different than web2 growth. It involves strategies centered around acquiring, engaging and retaining customers. However, what’s different is that web2 growth strategies may not work for web3 applications because of its decentralized architecture, pseudonymity and user-owned data.

For example, social media platforms like Facebook and Twitter were able to grow rapidly by leveraging user identity. They were able to build a network effect and could offer personalized experiences, targeted advertising, and other features by leveraging user data. This helped them acquire and engage users. In contrast, web3 social media platforms like Steemit and Minds.com are struggling because of lack of availability of user data.

Basically, web2 growth strategies are outdated for web3. If marketers want to drive large scale growth for their web3 products, they need to focus on two things.

1. Come up with new growth strategies like public goods funding, community building, leveraging on-chain analytics etc.
2. Power web3 applications with the tools to execute web growth strategies effectively (because they do work!)

Web3 Growth Strategies

These strategies are unique to web3 and leverage the principles and technology of the decentralized web to drive acquisition, engagement and retention. Some examples of the same are as follows:

1. Tokenization: It refers to the process of creating a digital asset/token for the purpose of incentivising user engagement. For example, Brave Browser rewards users with BAT tokens for viewing and interacting with ads.
2. NFTs: Non-Fungible Tokens (NFTs) are unique digital assets that can be used to reward users for their engagement or as a way to monetize digital content.
3. Airdrops are a marketing strategy where companies distribute tokens or digital assets to many people for free or at a reduced cost to promote a new cryptocurrency, increase user base and create buzz around its launch.
4. Community building: In Web 3.0, building a community around a brand or product is critical. Businesses can leverage these communities to reach and engage with their target audience.
5. AR/VR: This technology allows for the creation of virtual storefronts, immersive product demos, and other interactive experiences for users

You can read more about this in our blog on web3 marketing.

Web3 Growth Tools

Coming to the tools that can help us overcome the constraints of web3 applications.

1. Identity Tools

User data is critical to run targeted ads, show personalized content and devise custom growth strategies.

Web2 applications can easily build rich customer profiles since they capture personal information of their users and even build social graphs. However, the same is very difficult in web3 since most activity here happens anonymously.

To solve this problem, some teams are working on creating new ways to identify people in Web3:

1. Ethereum Name Service (ENS): It is making it easier to use human-readable names instead of long, confusing wallet addresses.
2. Civic: They are building a system to create and manage digital identities that can be used across different apps and platforms. It allows users to control and protect their personal information online while providing a convenient and secure way to authenticate themselves without revealing sensitive data.
3. Galaxy: A crypto-native identity solution that creates a unique identity for each user based on their on-chain behaviour.

2. Marketing, Automation and Customer Engagement Tools:

In Web2, companies use Facebook ads, emails, and push notifications to reach new and existing users. However, in Web3, there are no widely used tools for companies to grow their user base.

Some teams are working on communication tools specifically for Web3:

1. Ethereum Push Notification Service: They are working on a protocol to send mobile push notifications based on on-chain activity.
2. Lens Protocol: They are developing decentralized social graphs to super-charge user-owned social networks.
3. Collab Land: It is a tool for Discord servers that keeps them gated based on token balances in a users’ Ethereum wallet.
4. Lit Protocol: It is a decentralized access control platform to gate content, software, and data using tokens or NFTs.
5. Spindl: Spindl is solving the attribution problem of web3, it tracks users as they move between web2 and web3 applications to give you a clear picture of what your funnel looks like, which acquisition channels work for you etc.
6. Layer3: They offer web3 native growth solutions by allowing you to create powerful, interactive experiences like quests and challenges.

3. Crypto Adoption Tools

Crypto products face a more concrete challenge in terms of their market size because they depend on the number of people using crypto wallets. For example, if you build a DeFi app on Ethereum, your potential customers are limited to the approximately 25 million people who actively use Ethereum wallets.

However, some products are expanding the market by making it easier for people to use blockchain-based products without needing to know about wallets or blockchains. Other products are getting people excited about blockchain-based products by offering incentives, such as revenue potential or rewards. Finally, some products are designed to onboard new users into Web3 and make it easier to start earning in crypto.

Let’s look at each of these tools:

1. Dapper: One of the applications that they created, NBA Top Shot is one of the most widely used web3 apps. They are growth hacking their way into adoption by hiding the complexity of blockchain technology behind a simple user interface. Dapper has also simplified the process of creating and managing a digital wallet, making it easier for users to participate in the ecosystem.
2. Everbloom: They have created a user-friendly interface that allows users to buy and sell NFTs directly from their mobile devices without needing to understand the underlying technology, making it more accessible.
3. Helium: They have been able to reach an install base of 350K+ by getting people excited about mesh networking and their hotspot’s revenue potential
4. CoinList: offer centralized products that incentive people to try out Web3 products

Conclusion

All in all, a lot of innovation is happening in this space as it is on the verge of taking over the world. The overall MarTech category has seen over 6000% growth from 2011 -2022 and we see it growing at an even rapid rate as the interest in web3 piques. For product marketers and managers tasked with growing web3 applications, it is important to be on the lookout for emerging trends and strategies.