Simple math for next cycle founders

[tieubao]

https://twitter.com/DoveyWan/status/1682455837019881477?t=nFwYtCig_G_hJxusqbLPpg

Simple math for next cycle founders:

CB+Binance = 200m accounts;
MetaMask = 20m addresses;
Active onchain users = 200k

It’s a 10% to 0.1% ratio from top of the funnel. Every new cycle top of the funnel will grow organically as price action (fomo and greed) is the best acquisition.

Solid work that can drive 10% to 20% or more, or 0.1% to 1% will be next cycle’s trend setter

[tieubao]

The data structure above at first glance is a pyramid, but from user intent/profile perspective is more like a barbell: ❚·══·❚

onchain experience serves best for either the MARGINAL users (no good access to cex or financial infra) or POWER users (self-custody, whales who want to trade with transparency, heavy yield farmers, additive hamster degen) at current phase. The large middle distribution are either indifferent or not enough incentive/too high of mental switch cost to move onchain.

When competing with offchain experience on cost, speed, usability, or content quality & accessibility we are far from there. imo is not the right battle to fight: Twitter will not be decentralized by a Twitter form factor thing, onchain STEAM needs to have its own Counter Strike level hit first before it can be a distribution channel.

It’s just unrealistic to expect “better onchain content delivery to beat web2” recommendation, targeting, curation all these are too costly to do it in crypto native way. retro fitting NGMI, we need to reimagine in the native and creative way.

Simply have tokenomics on top of apps will not magically lower down the CAC or fix the broken retention rate, which are the two main causes death of consumer facing apps

So my thesis for funding next gen products/protocols are

1. How to serve the two sides of barbell better
2. How to enlarge the barbell coverage (ask the q: why mid distribution will care and what’s the trigger to move them onchain)

[tieubao]

Some prior examples of barbell adoption path

Defi (permissionless access to financial instrument)

• Uniswap started from marginal users and assets later broadened the barbell to average spot traders. Uniswap saw adoption from marginal long tail asset issuers and spot traders, the first surge of utility was for algo stable coins as liquidity of rebasing asset was hard for CEX. Uniwap users is now roughly 5-10% of CEX

• Etherdelta back in the days was for power crypto natives users, DAU peak at ~30k back in 2017; GMX, most of the value driven by high lev whales alson power users. nowadays the size of traders on perp dex was at most 1% of CEX, I'm expecting to see the barbell being broadened for tradfi and deriv soon.

Stablecoin is the same path of adoption

• USDT is a good example that's built for offshore traders outside US or folks without access to US dollar, both powerful and marginal users, and serves lots of global trade settlement in massive grey markets where local currency is not a preferable form of payment

• widening the barbell is the play on distribution: USDC with Coinbase as distribution partner& all the banking relationship makes on/off-ramp easy; Binance props up BUSD with its distribution engine before it gets shut down

[tieubao]

There are two perspectives of this barbell data structure: consumers distribution and developers onboarding

1- from consumer distribution perspective as mentioned in the first tweet, we are actively funding top of the funnel distribution beyond exchanges and standalone wallets, ie dapps that built for users without wallet instead of the 200k active onchain users, and middleware and protocols that can drive the 0.1% conversion rate to 1 to 5%

2- from developer onboarding perspective, there are roughly 20k Solidity devs, compared to 2m Rust devs and 20m JavaScript devs, .sol is a 0.1% market share at most 🥹 enable developers to program smart contract application in a secure environment with whatever language they are already proficient in is something infra projects will find their edge in