Engage-to-Earn, SocialFi, and the Dream of Mass Adoption l KBW2024

[Music] all right perfect um welcome everyone Welcome to our distinguished panel um I will be extracting the questions from my phone while tapping and earning at the same time um kidding all right perfect so thank you for joining us in the panel um we're going to kind of dive straight into it and I'd love if every panelist could very briefly introduced themselves and how they got to this wacky space and sitting here in Korea talking about Mass adoption of cryptos is this thing on yes hi my name is Caitlyn cook I'm the director of growth for moonwalk Fitness moonwalk is a fitness accountability at built on salana to uh that hosts step-based competitions to help people build daily healthy habits uh prior to this I was working uh for D5 project originally started in finance but all led me to um more consumer facing applications which we're talking about today um my name is OLG I'm co-founder and CEO of sweat economy I looked at Bitcoin for the first time in 2011 it took me three years to start this business that we're running right now uh we started in 2014 we couldn't build on bitcoin because that was the only blockchain moved to ethereum couldn't build there and only in 2022 we found blockchain fast enough and robust enough to build on we're building on near and we now have 16 million token holders and 3 million actives all around the world and we literally convert your steps into currency hi I'm W and I'm the co-founder of cyber um and ethereum L2 build with optimism and um we also launch an app called uh link 3.2 one of the most um adopted uh onchain verified uh profiles for organizations we currently have more than 3 000 Orcs using that um if you check on um Twitter you can see uh projects like coin Mar c blah blah blah using it directly um it's like a alternative verified version of Link tree um our team started um in crypto in 2017 and um yeah glad to be here hi I'm navine Jane and I'm a contributor to a project called tar tar is a new layer one that has the easiest onboarding for any layer one blockchain protocol in the industry it's download free software from the internet install it on your Mac or PC and click Start mining it's that easy um before getting involved with tar I was in the music business and ran uh digital experiences for iconic artists like Lincoln Park and slip knot and The Killers [ __ ] yeah I love snip knot all right perfect um so I'm going to start with this question because we have two consumer facing daps and and two infr layers um and I love the fact that we're going to talk about user adoption um so I think there's about 5 or 600 um protocols out there right now in crypto I'm not I'm not I'm not being uh exaggerated I think more than 150 have been funded in the past few months to the best of my knowledge the internet as we know it runs on six maybe seven protocols um do you guys think that we might have after you guys deploy your main Nets of course um do we think we should maybe start and saying we have enough infra let's try and get some users what what do you think about that and I'd love to actually start on the infra side and I'm sorry to put you on the spot but is is enough enough at some point so I think the answer to your question is more about are our net new users who don't already have Exchange accounts and wallets and tokens staked on 50 Protocols are they able to actually participate in this industry and it's a it's like a first principles question more than anything so if you're a genz user if you're a gen Alpha user if you are someone who's not yet involved in the crypto economy how are you participating to get involved with ethereum today to go from fresh user to doing your first onchain TX is over 10 steps including KY seeing with some on-ramp um no new user is going to do that and that's why the number of new users coming into the industry is very small so it's less an infro question and more a how do you actually get new people to do the thing question okay thoughts go for it yeah I think uh I think we actually do need not like more infrastructure but proper design infrastructure uh the infrastructure is definitely not ready for Mass adoption yet uh we do have some um alternative ways that could you know uh enable users to lock in super easily without like uh uh remember those like keys or something but but but it's to be honest not like uh the most secure way yet uh so and also transaction blah blah blah all those infrastructure are been discussed and and being invested for a reason and and and to be honest if we look at the history of Internet um they you know um um um actually uh the the the internet spends much more time developing its infra uh before it becomes more accessible to the general public but from from my perspective I think how we're doing it it's more importantly um you you need to understand exactly how application and and and end users are thinking of it so so that's why we we also build applications while we're trying to figure out the exact weight of impra so I'm going to riff before we move to the application side um I'm I agree with everything you guys said but why does that need to Happ it on the protocol level like so protocol and I do want the I want I want to rebuttal from I would say the depths but protocol runs as a protocol and Facebook onboarded people to social media not ccip or whatever so I understand that but I think in isn't it the daps fault or place to bring those users and please let's ask the daps here where are our users and why aren't you bringing them spot on I we're definitely in an infrastructure budget our analysis is there are more than thousand chains and about 200 in development and if you're looking at daps that have more than 1,000 users which is not much to have 1,000 users is not something real users not AI agents not air droppers not whatever yeah yeah there is less than 600 so if we are calling blockchains rails then we have right now thousand rail companies competing for 600 carriages running on them every week I get approached why don't you move from near to our chain and I also get approached by teams willing to build a chain for us because we have so many users and it is absolutely crazy because you compared us with internet and I think it's very pertinent that until year 2000 bulk of money in the internet was invested in the infrastructure and then Capital allocators realized that returns were not coming Google was born in 2003 Facebook was born in 2007 under one success criteria or success metric active users and that was was a big shift around the year 2000 and you know what happened to infrastructure Investments made before year 2000 there was so dime on a dollar to Facebook and Google and others because whatever infrastructure You're Building without having use case you are not going to do it right because no data centers were able to deal with concurrent requirements for example of Facebook that needed to serve so many things at the same time all right perfect what's your thoughts how do we get more people to use our stuff my more simplistic take on it is that there's definitely been maybe a bit too much of a focus on infrastructure and now we're seeing a bit of a shifts towards more consumer facing applications which I think is really exciting obviously biased because building in that space But at the end of the day if Mass adoption is the dream we're not going to get there by Shilling infrastructure just because someone is very excited about the technical parts of it we're going to do it by finding interesting use cases that people want to engage with and they're not going to care which chain built on they're going to care that it's something interesting that they can use that's a very smooth uiux and I think that's the way that we get true new users rather than fighting over the few that we have in the ecosystem today all right riff I think you have something to say and then we're going to get into the topic a bit of like the X to earn but let's everyone respond to that I think that's a a statement let's go with that so I I think it's really interesting because we tend to bucket users either you're a user or you're a builder but if you actually look at HTTP as a protocol there's a billion websites there's like a couple hundred million that are actively maintained right so the people who are using the internet are the same people who are also building on the internet these are kind of like there's similarity there's connection there that is you know not really being represented and so if you if you have infrastructure where you know you're not actually solving problems for developers and you're also not realizing that these are human-powered networks like it's ultimately a human-powered network that's the only way it's decentralized so there's there's a connection there that I think we're missing the plot on I'll take that and so why is decentralization so important for user apps I'm like I'm I'm just like as I said earlier I I don't know if you I wouldn't fly a decentralized airline uh wouldn't wouldn't drive a decentralized car wouldn't take my wife to a decentralized hospital so um and one of the things I also want to rip on that let you guys respond is there is also a problem on the other side so let's say Netflix I love Netflix but if tomorrow Netflix stock goes down by 80% unless their programming goes to [ __ ] or they Spike up my prices I as a user don't care that much so something with decentralization and assets of all these users also makes a and I think that's one of the biggest issues there's a bad Riff on daps or whatever because we're going to get to that sometimes of the economy of the tokens themselves but as a user per se I shouldn't actually care that much if an asset said that whatever goes down I'm I'm here for the user I'm here for the app itself so we live we live in a world now where the CEO of telegram was just arrested in France because his platform supposedly doesn't comply with rules and regulations on you made a point let me address it so you also live in a world now where uh you have writers for various Publications saying that Elon mus should be arrested uh because like he's the figurehead and owner of Twitter because he's not complying with local rules and regulations the the value of decentralization is uh creating a world where people actually have freedom people actually able to express themselves more permissionless you know those are the values of the system and then you end up in a world where the CEO of a system is arrested and everyone's wondering what the [ __ ] yeah but still no one of these users goes use a decentralized social networking app um that's the truth user experience that's true users do not value decentralization they will only start valuing decentralization once they've gone through the account being shut down by their bank or disconnected from service then they start sort of managing that risk but generally 99% of the population don't and they don't care and we should acknowledge that that decentralization is not good enough proposition for users especially when want onboard new users all right you want them to click and be able to click in with their social media you want to onboard them but yeah they're going to be clicking with their social media there might be some mem data there that someone has who knows but how can we and I want the apps also and also more infrastructure to reply to that how can we create this seamless experience and not get people to do 10 steps and still have the dream of decentralization while the fact of the matter is that users seem to not care exchanges still till today after FTX hold more money than dexes so we can keep talking about that but capitalists the users don't care I agree but it it I understand agree that the user doesn't necessarily care about centralization the user cares about convenience user wants the easiest to use thing so the the the secret is actually focusing on the user experience even if the system is decentralized you obfuscate all the complexity away you can still you can create systems that are decentralized and where the user experience is believe it or not just as good as a web two user experience you're right but it's a second thing nobody gives a [ __ ] about easy stuff that they don't need all right first you need to have something I'm going to centralize this panel back to me um and take ownership but only then there is a ux all right so the panel itself talks about I would say x to earn um we saw a lot of adoption for a lot of these platforms uh step to earn sleep to earn um I just saw Vape to earn so that's really cool we're going to pay people to smoke um a lot of these apps saw initial initial success and then Most of It kind of declined not only with the market itself because who's going to end up paying people to do this stuff so should everything be externed can we do sleep turn what's a gimmick what's not and how do we create sustainable models where actually this will be you know going forward not a short run because I haven't seen an economy of any of these daps just yet that has more than an internal token economy the good way to think about it is we have trillions and trillions of dollars in in X to earn economies the biggest one is work to earn that we practice for thousands of years the most recent one is pay attention to earn which is attention economy and it's huge 7 trillion and one thing that you notice in theme that actions to earn that are successful are inherently valuable which is the reason why we're going for physical activity because we know that it is inherently valuable to users so not everything ex to earn will be successful but that those actions that are valuable objectively and there are third parties willing to pay for it will be exactly where are those third parties but yeah um thoughts no we have NHS paying us already in the UK okay thoughts what what are your thoughts I mean to your point I mean there are clearly situations in which that that will work the work turn which always cracks me up I make that joke too um I think typically and it kind of falls into a situation we see a lot in the crypto space of just incredibly inflationary models that are uh not self-sustaining over the long run and very short-term incentives for whether it's the people behind them or the people who are participating that kind of fade away so in yes there are situations historically that have worked but I think in a lot of cases it's setting these projects and its users up for a very you know short amount of time for s a short amount of success I'd say yeah because as I said as it said earlier want more participation um so this work to earn there's this thing called an employer he pays me um in this attention to earn there's thing called an Advertiser he pays me when how do all these corporations get into that Healthcare Providers insurers employers ultimately governments are all benefiting from your physical activity we just conducted big resarch for use case of walking I understand that let's let's play to earn for example is a little bit harder to justify but maybe so it's not not simple Vape to earn for example is a freaking joke I you know kind what about social medias things like that do we see a situation where that's going to push that um like again the post to earn engage to earn and how do you do that while not cooking the numbers as we talked backstage and just getting a bunch of agents and uh and whatever AI to click yeah I mean there there are projects out there that are doing interesting things around like boost to earn so if you are a Creator on you know like whatever Tik Tok in Instagram pick your favorite social platform um you know you can if you boost someone else's post you comment you tweet you whatever you you you help hack the algorithm to like drive more engagement for whatever the thing is because everyone knows that the social media algorithms are you know if you're not spending money you know they're they're advertising companies that's how they make money um if you can find a way to hack those alos in that way that's very interesting so there are other like two earn strategies too that I think have some Merit and could be very interesting similar to like the walk walk to earn stuff which certainly is is working in in in many markets thoughts I think especially important for developers sitting here trying to build application um I provide a very different perspective I think you should look at extra earn as a goto Market strategy and your real tokenomics that's long-term sustainable that should be something tied to proof of what it's either proof of work and you somehow can put the work on on the internet and and or on blockchain that's that could prove itself like for example WAP to earn could be cheated like there are millions of ways to cheat it right the system is not robust the the the reason why uh poof of work of the BTC is so beautiful it's because it's it's proven by math right so uh I think I think don't mess with uh exra earn with the proof of something uh I think those are two very different things I'm I'm totally fine with your extra earn if you're trying to to use some airdrop expectation whatever that you can leverage to bring users on board but make sure you have ultimately a a very unique um proof of something that's um encrypted properly um and and mathematically proven it's going to work economically um so so that would be the thing that retain user and bring value that's why we need decentralization so i' offer this as a final question maybe um well getting final it why don't all these l1s that have all this money occurred you the model of EX we're saying who we just need people to pay for these activities as these daps onboard all these users why don't all this infrastructur start putting money into these specific apps for the sole purpose of getting more people to onboard to their actual blockchains so they put in whatever budget then you'll do whatever want and it might not be a 20-year company I think they are doing it already yeah but then we're we might onboard some million people to the to the platforms and then the developers can start getting them to do other things about uh you're absolutely right they do it but people don't know how to build for Mass adoption everyone is doing it millions of dollars in Grants that's not going to work no no no no genuinely I mean you look at most apps they built for the web how many people in the world have a laptop or desktop it needs to be on the mobile and it needs to be mobile native app because everyone uses apps web on the mobile is not great second is ux and nain was talking about it that ux for web 3 DBS is horrendous 24 words scribble them with a nail on a metal piece split it into two halves hide it into different geographical locations what I mean this crazy right so we need to be fixing that and the third and actually that's my biggest bug bear everyone is focusing on tvl you cannot build a product for next million people if you're focusing on tvl because it is faster to make five phone calls and get whales to come to you and then you're going to have cop of existing product than to build for the next million people perfect I'd love the three other participants to answer that question and then we're going to lock it out you know think about the people you meet at this amazing conference um the majority of people who work on actual systems here are developers where are the designers you know this is a this is I it always cracks me up when I see the makeup of a team that's working on like infrastructure or any even anything even like applications like I can't agree with you more we don't have product people just product for for a crowd like this for a for a amazing conference like this there needs to be at least probably 3 to 5x the number of creative Talent design Talent product talent that actually understands how to build consumer products and that's not present yet so that is an opportunity for us as an industry going forward and then I think we'll see a lot of opportunities change you cannot have a world where it takes 10 steps including kyc for someone to go from cold start to being an onchain user and expect any form of adoption that's just [ __ ] what are your thoughts I mean everyone always asks where the new users are and then you ask them to your point like they go through 10 steps in a process every step that you add is going to see significant drop off in people that continue on that path right like the UI ux of most products out there today even the most heavily used ones on chain are not suitable for mainstream users and there's not been nearly enough Focus even we're talking about infrastructure let's talk about payments let's talk about onboarding let's talk about sign in let's talk about wallet abstraction and making it significantly easier for new users to come to a platform not need to care that it's powered by crypto again because it's just something they're interested in and works really really seamlessly with um different components to the onboarding process that they've already seen rather than sign in with W with wallet fund wallet and all of these different things that people have no experience with and and then if we're going to be interoperable I also need to have the gas tokens of all these different things and then I need to it's like a user saying let's move from aul to AWS right now for this server and we don't owe we don't owe um you know non- crypto native users are not incentivized nor do they owe us anything of using the products that we've built it's on us to create an experience that entices them to actually get onboarded like they owe us nothing on that front but this is another reason why we're in infrastructure bubble because if you compare it with an internet anyone remembers how Yahoo looked in 1998 99 I didn't I don't think they had designers the portal age it was horrendous so we are tracking exactly the same development and it is going to get better and quickly all right anything to add wrap it up I think uh the hardest part it's actually finding that use case that actually needs crypto um and the use case that needs the proof of whatever that somehow the aggre like because of the system that you design the the toe economics that you design and and therefore you can you can foresee a future of this um econom the overall productivity of this economy it's going to be much bigger than what it is right now so and that that's the secret of of of of finding a good use case and that's the actual challenging part all right we're done and let's just hope that use case is not meme coins because come on we're done all right perfect thank you very much and thank you for our great panelists come on [Music]