Written by: Thomas Issa

Compiled by: TechFlow

Acquiring users in the cryptocurrency space right now is like the earliest humans hunting in the depths of the Ice Age that spanned thousands of years: their tools were rudimentary, their prey was dormant, and early humans wandered the tundra, knowing little about their prey, with only two outcomes: a successful capture or death from starvation and frostbite.

For consumer crypto products, the story of how they start acquiring customers is the same: get users or die.

2021 and 2022 marked a period in which startups could combine fundraising announcements with subsequent NFT or token airdrops to attract and retain early users; a strategy successfully executed by many marketplaces, analytics tools, games, and Web 3 infrastructure, allowing them to gain early momentum based solely on the performance of token projects on the market. Whether it was digital and physical marketplace Americana’s NFT pass that surged to 0.25eth after launch, or the once-promising NFT marketplace Looksrare, which allocated 12% of the total token supply to lure customers away from OpenSea. Both attracted consumer attention for a short period of time, but their user base has been volatile in the long run.

The missteps of these two projects are by no means the biggest mistakes in the crypto space, but the core problem with these dynamics is an over-reliance on token and NFT issuance as a long-term customer acquisition and retention mechanism, especially in a poor macro environment, which further inhibits the value-extractive nature of these designs.

To address many of the shortcomings of consumer acquisition, crypto companies and funds have invested in products that offer the best ‘loyalty.’ Projects have flocked to ‘earn by engaging’ platforms, with market leaders Galxe, Layer3 and Zealy emerging as ways to acquire, retain and instill customer ‘loyalty.’

These platforms are interesting in terms of top-funnel growth metrics, but they are temporary solutions and marketing props that have little impact on the long-term growth and ongoing customer acquisition of the protocol or project. Most of these platforms focus on social vanity metrics, encouraging users to follow or join communities on social media. The reward mechanisms are negligible (only small financial benefits and almost no social or reputational benefits). The disconnect between the pursuit and the consumer is exacerbated by the inability to track future transactions on-chain, which means that clients cannot calculate the lifetime value of their leads.

Now, there is no doubt that we are rapidly moving towards a future where everything is tokenized. Network participants are inherently greedy and obsessed with financialization, a dynamic that is enabled by blockchain technology.

Just as we tokenize, we will “communitize.” This means that for every human commonality, we have the opportunity to share that commonality in digital native communities through the exchange of programmatic assets.

Whether it’s the music we listen to, the items we purchase, or the schools we attend, we can make these experiences immutable on-chain and share them in the spirit of online communities. We are seeing this trend flourish in the luxury market as NFTs act as companions to physical products, bringing buyers closer together. LV recently solidified this future with their SoulBound NFT offering, which will provide the physical product, but more importantly, unparalleled access to a community of like-minded consumers. Shifting the focus from tradability to consumption fundamentally redefines community, creating unique groups that are “inseparable” from their consumers.

As Shayon Sengupta said, crypto is an inherently social technology, I would refine it further, crypto is hypersocial, it is a form of tribalism. As crypto participants, we are all tribes, and each tribe stems from the common ground between members. As a community, we listen to the warnings and advice of our peers. Typically, we will not act without the consent or recommendation of the group.

To ignore the community is to ignore the spirit of cryptocurrency consumer behavior.

Crypto-native use cases like Mirror’s Subscribe to Mint, POAP’s Attend to Mint, and IYK’s Interact to Mint bring us closer to NFT communities formed through actions, likes, dislikes, and desires. Digital fashion startups and luxury fashion have already established redemption-based minting as the future of their industry. Thanks to platforms like Medallion, we will be able to join communities of our favorite artists or collect experiences on Mercury with our future rising stars. All of this lays an important foundation for the prevalence of digital native communities in our lives.

With advances in Web 3 attribution, it will be possible to extract information about the products and brands users purchase and endorse, the locations they visit, the blogs they read, and even the sports teams they support. Web 3 allows for value capture that is not possible in the current distribution monopoly system. In the new media model, users are measured by the absolute value they bring and are rewarded through mechanisms such as revenue sharing rebates.

These elements align with a future led by a new model, a concept known as Community as a Service (CaaS). In simple terms, CaaS can be understood as access to a specific group of people being valuable enough to be considered a marketable product. If we deeply understand the idea of ​​communities, their trends, and their unique role in crypto, we can realize a future where it becomes cheaper to increase organic visibility, provide low-cost feedback and insights, enhance brand credibility, and enable targeted advertising campaigns.

The future of customer acquisition revolves around monetizing communities through cryptocurrencies, empowering consumers by simplifying and strengthening value creation. In Web 2 social consumption, the community onboarding process was simplistic and often disconnected from the brand itself. With Web 3, the consumer experience shifts from a simple “buy now” to a more inclusive “get access”, which represents the most basic form of the CaaS principle, with the most powerful distribution platforms coming from these NFT-enabled groups. Cryptocurrencies enable a value capture mechanism that enables communities to own, control, and track their influence. These dynamics will ultimately have powerful implications for brands, projects, and protocols, establishing the CaaS dynamic as the future of customer acquisition in every direct-to-consumer vertical.

Caas Transformation

The compelling argument is that Web 3.0 and blockchain technology will usher in an era of increased advertiser control, fairness, and decentralization. However, without systems to facilitate the creation of value and its fair distribution among all value contributors, we cannot maximize this fundamental premise. The CaaS monetization model is the first step in building a community-supported NFT infrastructure that is already expanding the space.

Once consensus is established, this trend will be driven by platforms that aggregate communities, infer data based on chain activity, and identify areas of value-added that communities need to be rewarded. Builders will be inspired by community aggregation tools like De.ID, contribution tracking platforms like OrangeDAO’s Grove, or efficient ad networks that connect brands to Discord communities like Wildfire.

While this concept is novel and has not yet been directly applied to product or protocol design, builders will productize these trends that already underpin customer acquisition dynamics, and we will see communities monetize their social and technical influence, which will ultimately enhance customer acquisition and validate the CaaS business case.