UFOstart Newsletter

This must be the mondayest Wednesday ever…😅 But no worries! We’ll share some great value this week and it’s a hot topic…user acquisition in web3!

Crypto's token distribution has evolved through 3 key phases:

1. Proof of Work (2009–present): Mining with hardware.

2. ICOs (2014–2018): Capital through initial coin offerings.

3. Airdrops (2020–2023): Bootstrapping w/distributing tokens.

Each phase reduced barriers for participants, making crypto more accessible. These shifts aligned with new waves of growth and development in the space. But is the airdrop era over? How does this fit into onchain strategies for user acquisition? Continue to find out!

• 5 Common Onchain Techniques For User Acquisition in Web3

• How to achieve Progressive Ownership

• Top Tweets/Bite-Sized Insights of the week

5 Onchain Techniques for User Acquisition

5 Onchain Techniques for User Acquisition

This week, let's tackle a challenge that many in the crypto space face: User Acquisition. We're breaking down 5 common onchain techniques for user acquisition, each with its strengths and drawbacks.

1. Airdrops: A popular method for user acquisition. Projects distribute tokens to incentivize adoption and engagement. While effective for mass distribution, it's susceptible to gaming by airdrop farmers, leading to price crashes and low user engagement. Ideally have an airdrop strategy in mind, that does not give away tokens for “free” but in fun challenges or in return for some sort of engagement format.

2. Onchain Ad Networks: Platforms, like Slise and HypeLab, use wallet and onchain data for targeted advertising. They offer quality targeting but struggle with scale due to the limited reach of publishers in the crypto space.

3. Finding Crypto Users in Web2: Addressable is pioneering this approach by linking onchain blockchain data with off-chain social media accounts. This method has great potential for massive reach but is yet unproven.

4. Quest Platforms: Platforms like Layer 3 and Rabbithole incentivize users to complete value-add actions. They offer low-cost acquisition but can attract poor-quality traffic, including bots.

5. Partnerships & Integrations: A strategy adopted from traditional tech companies, this involves collaborating with other projects for mutual growth. It's a method for quality distribution and can benefit from overall network effects by reaching new audiences from each other.

As the crypto market evolves, understanding and leveraging these methods will be key to growing your user base and community. Find out more from Alex Topchishvili here:

How to achieve progressive owe

Progressive Ownership in Crypto:

Progressive ownership builds on progressive decentralization. Tokens are not a substitute for product-market fit. Users are incentivized with revenue share income (e.g., ETH or stablecoins) and have the option to trade it for tokens, representing ownership in the community's revenue. Projects like Optimism, MakerDAO, and ENS showcase the viability of progressive ownership. So, how can you achieve progressive ownership?

1. Build Products that Serve User Needs:

   • The foundation is creating products that offer a step-function improvement in fulfilling core user needs.

   • Meeting diverse needs, from income to esteem, is crucial, also for psychological ownership.

2. Use Onchain Revenue Sharing for Growth, Retention and Defensibility:

   • Implement onchain revenue share models (e.g., Zora's protocol rewards) to deepen user commitment and boost defensibility.

3. Allow Power Users to Level Up into Ownership:

   • Most loyal users can opt into ownership through tokens that grant economic and governance rights.

   • Users choose between earning income or taking a proportional token distribution…

   • Implementation details (staking, vesting) require further consideration…

TOP TWEETS

Check out the most insightful and game-changing Tweets just for you:

What onchain strategies would you add?

👉 What secret tips would you add to acquiring users in Web3? Share your favourite tools and user onboarding tricks with us! Let's make this newsletter a conversation. 💬