State of Consumer Crypto
how to define a consumer app?
before diving into any topic, I want to set it clear what a consumer app means for me in general which would set the context for the following sections.
the consumer is any person who comes to your platform on a day-to-day basis or rather the platform is like a habit of the user, like waking up and opening up X ( prev. Twitter) or reading a newspaper, the user should wake up and also open your app / the app should be a part of the user. if you have 100 of such people then, woah you have a consumer app.
examples of such non-crypto apps can be taken from app-store rankings.
examples of such crypto apps
dripdothaus, warpcaster, hey, pumpdotfun, frienddottech, puffpaw and skytrade to name some apps that I am personally excited about.
x and dialect team deserves a special mention because, with the arrival of blinks, x has become a crypto-powered app.
why focus on the consumer?
we all are bored of infra, open CT, see the 69420th crypto infra startup raising some funds. we need more consumer apps. a lot more. there are only a couple of consumer crypto apps that the whole crypto community knows.
if you want to onboard the maximum folks to crypto, then the consumer is the only play.
“consumer is difficult in crypto”, “there are not enough users”, “infra is not there yet”, “UX is shit” and there can be plenty of reasons not to build, but the consumer is most difficult to crack it crypto or non-crypto.
and small startups having a high conviction can beat any corporation, according to Zuckerberg
Do we have the infra?
we all have been cursing infra for quite some time, that “Hey, I want to build this app, but infra is not quite there yet”, “Hey, I’ve been waiting for the team to ship this feature, but they are procrastinating”, “Hey, 420th problem why they are not able to build the app”.
In 2024, the infra is all there be on EVM or SVM. Let’s see EVM first
Lens Protocol
Lens Protocol was one of the early social protocols that enabled developers to build on top of it. The DX was very good, you could spin up a web app in less than 30 min.
Lens was originally built on top of the polygon network and boasted a total rise of 30M$ from 10 apps built on top of it. ( there are more than 100 apps on top of the lens )
Lens earlier this May, shifted from polygon to zksync considering a more scalable approach.
Farcaster
Farcaster started on Ethereum and later moved the major contracts to Optimism and it has an interesting structure, where user identity and paying rent to store data is stored on-chain and the data is stored off-chain in things called hubs which are kind of a node/validator for Farcaster data.
Above is an overview of architecture from Farcaster Docs which describes the overall flow for an app. The DX on Farcaster is also pretty good and it’s easy to spin up apps in less than 30 min using services like neynar.
State of SVM
Solana, Solana, Solana. No such social protocol has been built on top of Solana yet. The reasons are unknown, in the past teams like Gum Protocol, and Solarplex ( on top of at-proto) have tried to build but had to shut down. There are apps like drip.haus, helium, hivemapper but no protocol.
With the recent releases of Generalised zkCompression, SVM API, and firedancer on the way, this seems like the best time for someone to develop a consumer protocol on Solana.
Generalized zkCompression can be used to store any data at a fraction of the cost. More about it here, https://www.zkcompression.com/
SVM API can be used to create a layer on top of Solana, which can provide more flexibility to the protocol builders to include custom use-cases and also make it cheaper, like this example https://github.com/buffalojoec/paytube where Joe from Anza Labs, created a state channel where people can transact among each other off-chain and then the result can be submitted on-chain
Firedancer is set to make Solana greater and increase the overall performance of the blockchain.
Considering the above points, this is the perfect opportunity to create a consumer app.
what are some thoughts to keep in mind before/during building a consumer app?
The first thing is to define the audience, it’s foremost important. You can’t make an app that everyone likes, but you can make an app that is liked by 100 users and expand from there.
Choosing the 100 users is most important as that will define your app segment. These should be closely related to you, in the case of FB it was college kids. Puffpaw is an app building on Berachain, which is incentivizing people to stop smoking, the founding team has over a decade of experience in the vape and pharma industry which instantly gives them an edge over any other startup.
mobile, building mobile-first is extremely important but if that can slow your SMT [ Ship to Market Time ] a lot, then you can focus on building a PWA or a web app. but mobile must always be in the roadmap.
I’ll be bringing examples of Facebook a lot because no one can deny that it’s the top consumer app of all time so they must have done something right that others did not.
off-chain wherever possible, on-chain wherever necessary. this is another angle that can be validated by Farcaster, where only a part of the protocol is on-chain and the rest is off-chain like user messages. this approach significantly reduces the fees involved, gives a better UX, and offers more control over the platform.
personalization / for-you-page is the most straightforward thing that is ignored by crypto consumer apps a lot, any app can leverage the open graph of crypto and create a better FYP page than any of those non-crypto apps.
Who to market?
We have already discussed choosing the audience, but this describes it more considering how important it is.
Taking the example of Facebook, Facebook started as a college campus networking site, if they had thought from day 0 to market to the whole world [ imaging on day 0, Facebook tagline being Revolutionizing how the world talks ] then I guess they wouldn’t have been what they are today. It’s very important to define the SAM (Serviceable Addressable Market) and keep it very specific, in any app.
You are not building to onboard the next billion users, you are building to onboard the next 100. billion will follow.
Above depicts, how SAM for a consumer app can/should change over time. so overall, you should only pitch to people outside crypto if you have covered the SAM of crypto first.
There’s this thread from Dan ( Farcaster ) where similar ideas are discussed → https://warpcast.com/dwr.eth/0x1724054e from where I like this comment and gives clarity on how Dan approaches the platform.
The above cast also tells what should be one of the main goals of any consumer app. to become an identity.
point of view(s)
There are multiple ways to approach this problem, we’ll look at each solution that has been tried in the past and try to understand what went (if) right and (if) wrong
Is Protocol the only way? FC and Lens
Farcaster and Lens both chose the protocol way, they both first built a protocol and then apps on it.
Farcaster chose Product Lead Growth ( PLG ) [ mentioned in detail in this article here below ]
Essentially, Warpcast the top client on Farcaster, is also managed/owned by the Farcaster team itself. With this approach, they can control a lot of things on the application layer and offer a really good user experience, if they launch a feature, then it’s easy for them to show the possibilities by launching it on their client.
The flow of login on the app is also pretty good for a normie,
It’s completely a web2 experience, where you don’t have to connect your wallet even once, you can also pay on-chain fees with the help of Apple Pay, which makes Warpcast a great consumer app, user experience-wise.
One of the things, that I don’t like about Warpcast, (it might be done intentionally to force user sign-ins ), is that you can’t browse the app unless you are logged in. The behaviour is similar to X where you can view a post through the post link, but not the app.
There have also been some debates over market share, there are apps like Supercast which is an awesome client, but due to Warpcast influence, it’s said that people go to Supercast only when Warpcast is down. There are plenty of mini-apps on Farcaster but Warpcast is the most widely used.
Lens chose the other way, it asked founders to come and build apps on it, and the ecosystem will bring the users. It had a huge user base which apps can use to bootstrap the growth.
This approach gave more power to the clients, despite hey being the major clients and also completely open source, other clients served different purposes and many had individual use cases and were used. Orb is one of the mobile clients which was used a lot. Due to this approach, apps were able to raise close to 30M$ for them, which has not happened with any app built on Farcaster protocol till now.
At Poster (then Lenspost ), we were also quite early to the protocol and experience the community, the users were quality, they were genuinely interested in the protocol and the Lens team itself gave time to each app building on top of it, which helped us to grow the initial base for our app.
Farcaster saw a huge growth in DAUs once frames were launched earlier this year in January and with people using Farcaster to drop tokens starting with degen and followed by multiple people using the same playbook, the activity on Farcaster peeked ATH. I earlier liked Farcaster a lot, due to qDAUs ( Quality Daily Active Users ) which decreased once the airdrop meta came, and was better than before. ( sounds a little selfish, haha, i still use Farcaster, just a bit crowded )
Lens uses also peaked ATH last year, there were rumors around airdrop, and due to the invite-only feature of len in the early days, it gave some status symbol to people in the network, that people were willing to buy handle in the secondary market for 300–400$.
This leaves a thought in the mind that
Is Speculation the only way? Friend.tech / Fantasy.top
The above is taken from one of the decentralised blogs, Every application requires a certain amount of liquidity to become relevant. Every app needs to find the meta that can help them cross the threshold. In the case of Farcaster, frames were the escape velocity. In the case of Lens, it was the early invite-only people that created hype and also the rumors around airdrop.
Now, here’s the problem. Read a tweet ( not able to find it ) but it was something like this — People are rewarded by airlines in points, but without even rewarding the points, people will still fly.
Any user should use your app without even having a point/token in place, point/token should be a cherry on top.
The above tweet highlights why speculation/financialization is important but apps should focus on long-term incentives with the tokens/points.
Friend.tech, Fantasy.top are some apps that have used speculation as a way to gain traction, for a given time, they gained a good amount of traction but eventually lost that. This clearly shows, that one of the core problems is short-term incentives, the idea behind friend.tech was good — you could trade time of people, but people just used it for gains.
The below charts clearly show how the activity across both apps peaked during a time and then went close to 0.
Knock Knock Solana? Drip.haus and Pumpdotfun
Drip.Haus — Consumer without drip.haus is incomplete.
Drip is a creator-focused app, that enables creators to distribute any art to a large-scale audience ( of drip ) for negligible cost. Users can also tip creators using something called droplets, you can consider droplets like the platform token except they are not on-chain, you need to buy them to collect art, to tip creators and creators also receive droplets which they can swap for usdc.
For creators, drip recently launched a studio that makes the process of publishing artwork easier.
Drip also has this hook, where you can unlock a chest daily to secure a rare or legendary art. Such small games inside the app like chest, droplets mechanism, and rarity have helped drip to become one of the top consumer apps across all chains.
Drip is currently working on a mobile app, which is already live on the Saga store, expected to launch in Solana Breakpoint 2024.
Above are screenshots ( SS ) of the app taken from Vibhu’s tweets, which make you think about how you should focus on building a consumer app, and the detailing you should focus on. The SS on the left side shows the option to the user and each option has a different login flow entirely.
Pumpdotfun — memecoins as crypto content
For any global news, within a couple of minutes, thousands of memecoins are created on pumpdotfun, and users can trade on these pieces until the bonding curve reaches 69K$ MC, after which a raydium pool is created. These coins are symbolic of the events happening around the globe and can be also seen as a piece of content.
The ability to launch a memecoin in just 1 click for free, makes it a really powerful platform
I would like to quote this paragraph from manan’s article
An army of real hoomans and mechanical bots racing to spot trends and events, then tokenize them in hopes of a moonshot. Used the right way, pump.fun’s terminal outshines Twitter’s trending tab.
It is also one of those apps, that has till now not seen declining users, and after the recent announcement of free deployments and 0 .5 SOL as a reward for creators whose memecoin completes the bonding curve, this number should only go upwards.
Tiplink and Privy — The UX Saviours
There are over 20 apps on Solana, where you don’t need a wallet to use the app, you can sign in through Google powered by Tiplink.
If you have been in the Solana ecosystem, you must have interacted with a tiplink somewhere, the concept is simple, and the link is the account itself.
You can send anyone in the globe a link with some USDC loaded and they can offramp to their bank account.
Anything that can be done in a wallet can be done with the help of tiplink and the team behind tiplink is making the user experience on Solana better day by day.
Privy has mastered the art of user onboarding, with the support of multiple OAuth providers like Google and Twitter and also adding support for Solana recently, one can only be bullish on them.
Teams like Opensea, Zora, Hyperliquid, and Blackbird all use privy for user login, for the experience that it brings to the table. If any user chooses to go with Social Login then an embedded wallet is created for them, which is secured with passkey. The user has the option to port that wallet to other apps or create a completely new wallet for new apps.
Privy also provides offramp and onramp solutions right from the wallet with the help of MoonPay and Coinbase. Recently they also released a feature called Native Bridge which enables users to pay from any chain they want, the app would receive the funds on the request chain only.
Such small design decisions have enabled Privy to bring over 3 Million users into the ecosystem across different deployments.
Consumer x IRL — An interesting sector
I read about this recently only, on how some apps in crypto are creating unique experiences for the user by combining an aspect of real life in their app. This generation might be terminally online but this generation also craves for real-life experiences more. Some apps in this sector are Skytrade , Puffpaw and Hivemapper.
Skytrade enables people to host the rights of airspace over their homes, and drone operators can buy the tokenized air trades over that house which would enable them to be part of this accessible market. Despite being in the early stages, skytrade has enabled more than 30M$ of air rights trade on its platform.
I’m bullish on projects like Skytrade, because back in 2018 I was working on a hyperlocal drone delivery startup, and the process to get permission to fly drones over residential properties was lengthy, before each take-off permission needed to be signed by the local police station and the District Magistrate’s office. It’s 2024 but not a lot has changed.
Puffpaw is another interesting project, which aims to incentivize people to quit smoking. It has created its vaping device or the node, which has a daily puff limit that affects the game. The vapes are also available in multiple flavors with varying nicotine levels.
Imagine just getting paid just to drive around the world, Hivemapper is just doing that. You need to install a dashcam in your car and you are contributing to making a better mapping system for the planet.
Due to the entry barrier having the dashcam price being close to 500$, the users on the platform are those who are genuinely interested in it, and the users are increasing month on month.
Why Telegram can be the biggest crypto consumer app?
Telegram Team launched the Telegram Browser, which supported websites hosted on TON on both mobile and desktop and enabled a seamless switch between messages and websites. Which makes crypto accessible to almost 1 billion monthly users.
Mini-apps have been a great success, over 500M out of 950M Telegram users interact with mini-apps each month.
There are a couple of mini-apps in the Farcaster ecosystem that are fun to use, some examples are
- Hamster Kombat — a game where you can manage a virtual crypto exchange, and grow your hamster, right from the telegram.
- Fartapbot — which is a really simple app, where you just tap on the screen mindlessly to earn some points which can be redeemed for some goodies.
- Dialect Operator — a mini-app that seamlessly integrates with a phantom wallet to perform transactions.
It’s amazing to see, that you don’t have to authenticate anywhere because the mini-app can just use context from telegram to pre-authenticate the user.
Are Blinks going to save the internet ( and crypto )?
URLs have been the backbone of the internet, and they have been the same for a long time, they are the only thing that can be shared anywhere as a message and a preview can be rendered using the metadata present in the URL, and that what makes blinks ( blockchain links ) powerful.
Any link can be turbo-charged to enable crypto transactions anywhere.
The below podcast is a must-watch, and it will hype you about blinks that can’t be summarised in words.
Below is an analogy that I like a lot for blinks, blinks meet users where they are, and ultimately if we have enough users wanting blinks, then the platforms would be compelled to build built-in support for them.
You can explore more about blinks:- https://dial.to/
There is also this blow-your-mind thread that shows what can be possible with blinks
Missing pieces in Solana
There is now enough infra on EVM side for creating consumer apps, and services like Airstack and Neynar are doing some great work, in connecting the dots.
I feel, that what Solana lacks is a social graph — a place where you can enter any address and see what that address likes to use, the app he has interacted with, the interests he has, and whatnot.
There is also this lack of support on mobile, for apps to integrate the Solana Mobile Wallet Adapters is a pain and not standardized. You’ll need to follow the deep link guides of each wallet to integrate them, iOS is another story to cry about in the corner.
Conclusion
We have come a long way in crypto, and there has not been a better time to build a consumer startup than now.
It doesn’t matter which chain you choose unless the user experience is not compromised.
We also discussed about what has been tried till now, the good and bad so you can form your opinion on what type of consumer app you’ll build.
If you want to discuss any ideas, say hi on the x app → https://x.com/_0xaryan
Care has been taken to keep the article factually correct, if there are any issues please feel free to reach out above. Views are personal and not endorsement.
