ETHWarsaw 2023: Kamil Gorski, Tokenguard - Measuring Success: Decoding Growth Analytics

first presentation will be by Camille and Kuba from token guard um so yeah let's start with the some a round of applause for them thanks thanks thanks everybody um okay so maybe before we start um just a quick question how many of you are developers or very technical people okay yeah got to I know that's more than a half yeah okay um so I think we know how how technical we can get um we'll be mostly discussing uh measuring metrics and growth analytics so yeah let's start so um firstly we should try to understand what has happened in 2022 when the crypto Market crashed um last year so before the um bare Market uh the crypto Market was more mostly driven by inflow of new users and investors that were pouring tons of money uh into coins and tokens on the market uh however some of these coins and tokens um have lost more than 20 or 50 times their value from their alltime high and some of these tokens like Alf zero only lost three to four times uh compared to to the rest of the market and today we're going to try to understand why this happens and of course um we still think that most of the most of the uh traffic that's happening on the crypto markets is caused by the speculation and um investors however we do believe that there's a significant proof that organic growth can be achieved in crypto Market as well so after analyzing a lot of different business models and token nomies I think we can distinguish three most important most important categories of coins of course there are many other different business models uh coins that we're not going to discuss in here um so the first category that we can think about coins are meme coins basically uh projects that are driven mostly by uh getting into the consciousness of mass media um that are uh being driven by by random posts of Elon Musk basically without any specific strategy behind them to actually build uh build uh utility or build user activity so what what we usually end up with meme coins is high number of wallets with low user activity because you cannot do anything more with them uh the second category are Niche models um here we we have examples of the two most uh one of the most recognizable ones Ripple which is basically a um crypto that is designed to be a um a source of um source of uh mean of value um transferring between Banks uh similarly as Elixir is being used in Poland uh but we also have a very niched out business model by no uh which basically allows to monetize mobile apps uh for their outs by implementing the mining algorithm within the mobile app so basically when you're opening your phone you're using an app uh the phone actually mines the coin for you and the outter of the app can uh monetize this app uh thanks to that and the first third groups we have uh and that we believe have the most potential for the growth in the future are ecosystems so what's the difference between all all the other business models and ecosystems basically ecosystems all of third party um developers projects and investors built within them them so in most cases the most distinctive feature uh is the possibility to create smart contracts within those ecosystems uh in most cases those smart contracts are the basic ones similarly as in etherium uh you can create whatever you want however there are ecosystems that have inti out specific smart contracts uh that are focused on for example creating creating oracles as as in case of f Network so what is the growth strategy for ecosystems then basically you can think of it as as a comparison if you would take a regular Web Two marketing strategy for most of web two products you would think of running an offchain marketing campaign that would Target specific users and of course you could potentially uh create this kind of strategy for ecosystems as well so you would create an offchain marketing campaign uh that would Target customers or end users draw them into the ex change and make them buy your token or coin but if you take into consideration uh the average wallet size of a regular crypto user which is way below uh $100 and in most cases is way below $20 then you would understand that this kind of strategy wouldn't work at all because the cost of conversion in terms of offchain performers marketing campaigns is much higher so what ecosystems are doing to make them grow basically they're focusing on engaging develop ERS and thirdparty projects to build Within These ecosystems and these projects are then developing deps that are um bringing in new users into the ecosystems because these DBS they have their own marketing campaigns and if these dabs are successful they are also bringing in new fresh VC money so what ecosystems are doing they basically focusing on hackathons which are also Happening Here uh focusing on Grand programs oh sorry focusing on Grant programs and do we have it yeah we have it and some of the some of the ecosystems are spending more than $10 million uh per year uh by pouring that money into deps that are being built within within this ecosystems and also by by creating a friendly de developer environment uh so basically right now in the pul C ecosystem everybody is working really hard and pouring a lot of money into building the ink or rust uh smart contract ecosystem on the other hand uh the strategy for uh deps is to uh build an an engaging app that will bring in new users into the ecosystem so what are the metrics that daps should be tracking and that web free ecosystem want daps to track basically these are smart contract interactions the average value of those interactions as you would call it in web to world this would be a conversion uh on the other hand we're also uh measuring tracking the offchain marketing campaign activities both for deps and ecosystems in case of ecosystems that are targeting developers uh we are mostly interested in developer uh offchain activity in GitHub stack exchange or any other means where uh projects are being built uh but also hackaton retention if you spend more than $200,000 per unit on hackaton you want to measure how effective these are and of course average regular onchain metrics Sim as average small contracts deployed or smart contract um interactions so the thing is that daps have a much bigger challenge because most of the daps that we know have been built with an users or customers in mind so most of the deps didn't didn't create this kind of strategy that we discussed previously however there are some um there are some outliers so here we have an example of two daxes uh which are very similar in their operations however one of the daxes has dropped 10 times only and the second one Sushi swap has dropped 30 times in the similar um TI frame so of course speculation is one thing but the second thing is the strategy you have uh behind building this kind of a product so what most successful daps are actually doing is they're applying the same strategy as ecosystems they are Eng enging developers in order to build uh build uh in order to make these people build with these ecosystems so they are also organizing heatons Grant programs but also incentivizing connecting new protocols uh into their ecosystem because that uh right now for UNIS swap uh is a huge um huge share of the of the overall turnover that it produces uh in case of successful protocols such as Unis swap there are usually um many many different stakeholders in the tokenomy so here we got deaths we got Traders and liquidity providers and the most important thing I think is that Unis swap has a very intelligent strategy um in terms of um tracking the activity from the stakeholders and incentivizing them to get more engaged into using Unis swap so traders of course are basically end customers or end users for the protocol so you can can TR you can uh try to engage them with regular web to marketing activities so unisoft is hiring a huge number of marketing people right now um Regular marketing people like Performance Marketing specialist content creators Etc uh but they're also focusing on polishing the ux solutions so that uh their very complex protocol is easy to use and it's not a simple thing for for web free product to have a u um easy to use um interface but they are also extremely focused on uh making liquid liquidity providers happy and right now they're working on Fourth version of their protocol but but each of the uh consecutive versions they have released so far uh improves the experience and the revenues of the liquidity providers so the first two versions had a um constant fee right now liquidity providers with the third version of unisoft they have multiple Fe tiers so Unis swap is measuring uh the the number of of course average value of uh liquidity providing transactions but they are also um um tracking the engagement of liquidity providers within those specific uh fers and basically um the next version of unisab version 4 is going to include an algorithm uh calculating real time uh the fee for adding liquidity into a specific prod protocol based on the popularity of this protocol uh but also the risk included within it so you can you can achieve different product plus marketing strategies uh using protocol updates but also proxy smart contracts which allow you to update your smart contracts on the Run yeah so Jacob please all right thanks uh so as C indicated Unis have kind of upgraded itself from uh from the D to ecosystem and it helped it Thrive through the bad times uh so what are the similarities and differences between L1 uh goals and uh DB goals uh there are some uh common goals but there are some contradictory goals like uh l1's want to maintain security build trust scale the throughput to attract and accommodate more and more user users uh and they want to build Variety in their ecosystem while DBS DBS basically uh when they are small they want to test as many scenarios as possible so the drawback here obviously is that it might not be as secure as it should be they usually just want to monetize as soon as possible so so just release the token and uh worry about what's to do with this next uh and this also undermines Trust of the general ecosystem they are deployed on and also once you developed your application you want to uh deploy it on as many chains as possible because the job is done and you want to just expose yourself to as many uh users as possible uh while uh ecosystems just want to build the uniqueness and uh and uh variety inside this ecosystem because that uh grants uh the growth uh so yeah there are some common goals like uh we want to deliver and preserve unique features we want to grow active user base we want to maintain the user base uh and drive the user engagement that's uh that's common uh so uh so why measuring all this stuff is so challenging the first thing is that there is a number of factors that build the bigger picture and uh filtering out uh the noise is extremely difficult because uh we can uh think about General market conditions local market condition sentiment uh we can think about ongoing campaigns the campaigns usually also have some inertia because if you uh if you execute the campaign targeting end users you probably will get instant uh response while if you target your campaign uh towards developers there is a lot of inertia and you probably will see the results of that in half a year or a year time there are new app releases there are hacks which also influence the the things that happen on chain uh there also might be just random actions uh on social media Shilling some projects uh and the the the fact that the user is not sticky to to to just one ecosystem but the users usually like to uh travel and explore various ecosystems and we have plenty of blockchains bridges uh and it's it's just challeng Ching to combine all the data and at the same time filter the noise so uh the other thing is that even though the data is public uh it is usually somehow uh fit or uh like uh hidden so it's difficult to Target a single user to track the single user uh because we can say okay so tell me what exchanges are my users using well I don't know because I don't know what addresses this exchange is using as if it is using today one address it can use tomorrow some different address and uh uh we have nothing to uh to rely on so uh blockchains are even though they are public they're basically uh private so uh so we can we we can only rely on segmentation of user behaviors uh rather than particular users and last but not least is the fact that the there exist so many ecosystems and parallel universes like txas and dexes where txas just trade coins and actually blockchain could not even exist for them to to be happy it's actually a problem uh and yeah all those cross-chain uh functionality where users are moving from one chain to the other it makes it all very difficult and also the problem that Bitcoin was so successful as a project in its early days that currently users just correlated in in the mind with easy money so they're not particularly interested in uh what can you do with uh with the tokens or what can you do in this ecosystem how can you grow your identity through web free ecosystem you just want quick money and that's it and if it doesn't deliver then you quit so uh yeah uh so now we have a few charts uh at the top we have active users and at the bottom we have a price and uh from the first chart you could see that uh uh there is uh like one to one correlation between the price and active user base so the more price movement the more active users are there right well probably yes but there are many factors that add to it uh so by the end of the chart we can see a huge Spike of active users what was that it was the release of uh smart contracts on Alf Z Network so it attracted a lot a lot of users and uh on the right hand side side we have uh Asar uh Network which actually also in the same period of Time released the smart contract feature and we also can see the spike however it is much smaller because it didn't didn't even go over the the bull bur Market Spike uh and the reason for this uh probably is because Asar already had SM contracts implemented and they only added the second engine so uh second virtual machine so they had evm but they now they have both evm and vasm and for Alf zero it was like uh major step because it was the first uh first uh smart contract engine that that they supported uh right so we can measure we can measure uh DB's performance through the new user income come or user retention uh so here we can see a chart from R zero uh on as networks uh and andex exchange and we can see that the new users were coming in in waves but it kind of uh stopped by now uh while the retention is fairly uh uh fairly stable but still with the down front which kind of indicates that this up might not be performing extremely well in future and it's harsh truth but well it's better to know it uh then just be surprised uh with the fact that uh uh no users are using your app anymore and the price is going down or whatever uh so we can measure by the number of users or we can measure it by by the outcome of actions of the users so we have uh un swap dashboard from dun analytics here uh where we have the fees paid uh in with the on a different trading purse so we can either measure the just the users or we can measure the actions of the users in the case of Unis swap it is the most simple uh simply measured by the by the fees but we have always to keep in mind that people tend to find correlations everywhere because they love structure however probably reducing All Imports from Norway won't stop drivers collisions in a railway train right so just we just need to be super cautious on what we correlate with what and uh remember that filtering the noise is the most important and the most difficult part thank you thank you so um does anybody have any questions maybe you would like to comment or any of the slides or dig deeper I have a question actually so um guys don't you think that uh sometimes there is like too much focus on the infrastructure and everyone is building infrastructure and uh not enough people are building apps because we have like um ZK day and then L2 day and it's basically all about the infra and um how about the apps and can we measure somehow uh and compare the two yeah so uh that's a great question and uh I kind of had similar feelings when when I was uh developing uh in web free ecosystem because all all the ecosystems focus on is building tools for tools for tools for tools but where are the apps where are the use cases so the problem here is uh that without those Foundation we won't be able to uh to build uh fabulous apps and uh this is the the easiest part because if we have all the uh building blocks ready then we will be able to build apps fairly quickly and like differentiator between web 2 and web three will not be a thing by then because you will be just developing app and it doesn't matter today if it's in python or if it's in JavaScript because there are a lot of Frameworks and you just build basically uh the solution so so once we have the foundation we will be able to build uh Solutions and the urge to rush to to to the solution is big but uh but today writing contract is still just too complicated for average developer to uh to to feel appealed uh by the ecosystem so I think we are still in our infancy when it comes to building just going to add that the bugging smart contracts and we've been doing a lot of this previously it's pain in the ass like really when you speak with develop ERS they are super frustrated by writing and testing anything that has anything to do with web free so of course etherum still has the the best infrastructure and the infrastructure is being built on other ecosystems like paa do where we exist and also uh uh similar to to Alive zero however um still even in in ethereum it's as as Jacob said it's it's an infancy so there is a long way here okay uh yeah that's great thank you very much uh any other question if not then uh thank you guys for the presentation thank thank you much give a round of applause for for Cam and CBA