It’s crazy to think that it’s been nearly 10 years since I’ve been out to Miami. I spent a lot of time in Miami while working in the Music and Events industry, but wow was it great to be back in a city that has a such vibrant art, music, and (more recently) crypto scene.
I went to Miami with the CHNGRL.io team and this was the first “conference” I attended where I had a pure focus on Web3, Blockchain, NFTs, and Art. I came into this week wanting to get a better feel for the industry in real life and to get the overall vibe of the industry while we’re in the middle of this crypto winter. Here are a few takeaways:
The Builders are Here to Stay
I saw a slide at one of the presentations that said that NFT volume is down 97% YoY 😳. If you’ve been through crypto winters in the past, you know that this is the time that all the weak hands get shaken out. And what’s going on in the NFT market is no different.
It’s clear that those left in the aftermath of the 2022 crypto winter are here to build. It was refreshing to meet individuals talking about building DAOs, Web3 infrastructure, and communities, rather than floor prices. It’s particularly inspiring to meet the builders and founders who are self-funding their projects with their own capital and time.
It’s inspiring to meet a group of individuals who continue to be passionate about the technology and mindset of Web3, even when the financial metrics don’t look so great.
The TAM is Shrinking
On the other hand, it became very clear to me that the Total Addressable Market (TAM) is also shrinking. Let’s take a look at NFTs as an example. Simply put, there are less buyers of NFTs today than there were a year ago.
But looking at a more macro level, the growth rate of new wallet adoption is also slowing. The below graph is specific to Blockchain.com, but in this sample, you can clearly see a plateau in growth.
No doubt about it, when we go on the next bull run, we’ll start to see hockey stick growth again, but for all those who are building in the Web3 space, the audience of on-boarded Web3 users is starting to shrink. This means that all of us builders are going after a smaller and smaller market. So what do we need to do while we wait out this crypto winter?
Net New Web3 User On-Boarding is Critical
The thought that kept popping into my head over the week was that we need to get more people into crypto. I’ve had tons of Zoom calls with Web3 project leaders, agencies, and community builders who have all been saying this for the last 6–9 months.
If our TAM is shrinking, our job as evangelists of Web3 is to bring new people into the space. Education is definitely an important part of on-boarding, but how do you actually get someone to invest the time to learn about Web3? And what do you actually want them to do? Open a wallet? Load that wallet with some ETH? Mint an NFT? Or buy an NFT on secondary?
I love Uniswap because its the perfect example of a great way to on-board someone to Web3. It has a simple and intuitive UI/UX, solves a problem that people are experiencing at scale, and it has some badass blockchain tech behind it.
I’ve challenged our team at CHNGRL.io to gauge our project’s success on our ability to capture the FIRST TIME NFT BUYER. I told our team that if we are able to get our community to mint their very first NFT with us, we will not only have built a great community for CHNGRL, but we’ve also brought new people into Web3 to share with the other builders in the space.
Web3 Communities Need Properly Done IRL Events
In real life events are critical to solidifying your community. Yeah, we talk about the metaverse, virtual worlds, etc in Web3, but there is absolutely no replacement for face to face interaction. The challenge in IRL events is that you need to do an event that is best for your community.
Post-Miami there were a number of folks tweeting about Web3 events shouldn’t just be about loud EDM music and partying. When you’re in Miami, I know it’s tough to get away from the EDM, but there are some good points being made here.
I’m definitely one of those people who want to chat, network, and make connections during the day, but want to party at night (especially if I’m in Miami). This shouldn’t be the formula for IRL events. Know your community! The hardest thing to do is create intimate and personal interactions at scale, but IRL events, if done right can do this. We hosted a small happy hour for our CHNGRL team and supporters who were in Miami.
It turned out great! In fact, some of our team members met each other IRL for the first time, even though they had collaborated on other Web3 projects together. We did it in an environment that was casual and intimate so that everyone could feel comfortable networking.
And of course, as the host, you have to play party host! Which means doing 1:1 introductions and being mindful of including newcomers to the conversation.
You also see some of the really cool, well produced, and intimate events that organizations like Friends with Benefits (FWB) are putting on. Another Web3 community put on a really cool Hot Pot dinner with Asian founders and investors. Very well done IRL events.
The beauty of Web3 is that when you get back from those IRL events, you already have an online community that you connect back with to share the inspiration, energy, and everything that we gain from being at these conferences IRL.
It’s Gonna Get Worse Before it Gets Better…. But It’s Going to Get Better
Crypto news during Art Basel was dominated by the failure of FTX and SBF’s subsequent media tour. I hope there aren’t any institutional level failures like FTX, Luna, and Celsius (holy sh*t did we really have those 3 all happen in the same year), but I’ve learned to expect the unexpected in this space.
This industry has a lot of growing up to do.
When you see 20%+ yield on a defi play, you know something isn’t right. There are bad actors, but there’s also bad regulation. Part of this space growing up is also getting some proper regulation in place that will give the mainstream the confidence they need to on-board to Web3. There will always be bad actors in this space, but I just don’t see mass adoption until the government (specifically US government) puts some reasonable policy in place for those in invest and build in the crypto space.
Let’s also remember the macro economic environment that we’re in. We’re still fighting inflation, there’s no resolution to this war in Ukraine, and the world economy is likely going into a global recession in 2023. It will get worse before it gets better.
The good news is that there are more people building in Web3 than during the previous crashes. And when we get out of this crypto winter, there are going to be some amazing platforms, technology, and companies that are being built and incubated as we speak.
The Web3 absolutely looks bright, but for the next couple years, there’s going to be a cloud over the industry. I can’t wait to see what happens when that cloud lifts.