Crypto faces a unique challenge for consumers. Naturally, any consumer of a crypto product is focused on two things at once: the product and the asset value. This can be equated to needing to own Facebook stock to use Instagram or needing to own a part of the NYT while also being a reader. The value shifts from “is this product good?” to “is the business of the product good?”
While it seems like a hard hill to climb, there is opportunity in re-imagining the consumer and commercial relationship of crypto-native protocols and companies by leaning into this exact sentiment. If a protocol or product’s success is anchored on getting the right individuals to take action and remain engaged, the method of on-chain data can be a benefit. One area in this field that’s exciting to us is how data targeting, acquisition and advertising can develop in a decentralized landscape.
In this world, on-chain data is public and can be leveraged by anyone, anywhere. we like to think of on-chain advertising today as akin to the 1980s advertising era– billboards and magazine inserts are prominent, you can reach scale through distribution but don’t really have a firm grasp on who you’re reaching, if they’re the right customer and if it drives the right results. However, with more products and incentives emerging to put actions on-chain, this begins to evolve. Through crypto-native actions, we’re seeing users mint, claim, collect, buy, and sell – all unique behaviors that each tell a unique story about the individual customer. Similar to how Facebook and Google leveraged cookies as a means to build better ways to get in front of the right users and convert, we anticipate the creation of tools that make on-chain data more comprehensive and actionable based on the type of customer you want to target. But in this case, that data isn’t limited to those platforms alone, it’s available to everyone.
Third party cookies drove advertising on the web over the past three decades. The resulting business was reactionary. People traded data for access — now, their personal data is far and wide across the internet, managed by third-party vendors and platforms. We like to believe that users can and should manage this data to their preferences, but there is no putting this genie back in the bottle. On-chain actions pair user identity and transactional actions, which is a powerful way to more deeply understand consumer behavior and preference. While the data itself can be considered additive to existing user data, the behavior of preference and selection is more native to the user flow than what we see today with CCPA and GDPR. Applications can be built to encourage the access of data in exchange for better, net new experiences. Products need to be more unique, as data is public and the differentiation is now in the experience. This is early innings but a complete change of behavior and turn of hand.
One example of this new frontier can be seen through RabbitHole, which recently launched their Quest Terminal. Through the Quest Terminal, protocols can see how others are structuring their acquisition campaigns, what designs work per specific actions, and create user segments to build more effective campaigns through the use of public, on-chain data. Like how early cookie-based ad networks focused on segmented audiences, clicks and conversions a new set of behaviors are presented to crypto-based actions such as minting, collecting, swapping, staking, and lending. With the right amount of on-chain data, targeting and acquisition could become more sophisticated in knowing how best to allocate dollars, to which audience, to perform specified actions at scale.
Every day, more data is being put on-chain. Companies like Dune, Arkham and OnceUpon have taken an initial step in providing context to on-chain data, but we’re still very early in making this data actionable. For example, with the right commercial engineering, there is a model for Dune where protocols incentivize Wizards through tokens to drive more context and awareness around their offering. Sort of like a crypto native influencer and/or affiliate marketing network. We believe as more media is being created off on-chain behaviors, there starts to become an increasingly growing commercial stack that identifies and drives value off of this newly scaled network.
While Quest protocols and other acquisition tools have been “successful” in sending traffic to a protocol or product, it leaves a void in re-engagement, without really knowing who these users are, what they care about, and how best to segment those that truly value the purpose of the product. The Quest Terminal builds a new platform for creating and reacting to on-chain data where protocols can deploy Quests in real-time, monitor results and see how others’ are managing and deploying based on KPIs. This is a major component in the RabbitHole stack, where now campaigns can be easily distributed, aggregated and acted upon in real time. Soon, RabbitHole will release their SDK which makes it easy to integrate Quests from the protocol into any interface.
As decentralized networks move some of our social behaviors to socio-economic, the foundation to support this nascent economy is being constructed in real time. What’s clear is this action-based data is unique and critical for the expansion of all blockchain-based company’s, and we believe will soon go beyond for those looking to reach a user group prone to engaging, spending and supporting brands and platforms aimed towards their passions and preferences.
*To explore the Quest Terminal, visit Terminal.Rabbithole.gg. Read more from the RabbitHole team here. *
TCG Crypto is an investor in RabbitHole. None of the information discussed herein is intended to be, or should be construed as financial advice, or an offer to sell or a solicitation of an offer to buy an interest in any security. The information set forth herein has been obtained or derived from sources believed by the author to be reliable and has been provided solely for informational purposes. Nevertheless, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness. Certain companies referenced herein are included by way of example and not companies in which TCG has invested to date nor companies in which TCG intends to invest.