The Next Wave of Consumer Crypto | Alex Salnikov, Azi Mandias, Richard Adjei, Aditi Sriram

MC Noah I'm from an intern at jsquare I'm here to present the panel the next wave of consumer crypto so I don't know if you want me you guys want me to introduce you or you guys can introduce yourself and give a brief intro great y thank you so much uh I'm ad DT I work on Pera we're building um embedded wallet and onboarding infrastructure uh for apps building on crypto rails hey what's up my name is Azie I'm the founder of Zo we're building an a chain agnostic app that converges Capital intelligence and coordination into one venue think uh we chat hi everyone I'm Alex one of the co-founders at raro I now recently moved to RAR Foundation site working on the token you know raro nft company we're doing all sorts of things nfts for consumers for businesses yeah that would be it and I'm Richard um one of the co-founders for orabs and we're building API to help wallets and apps interact with all chains as if they're one great um this panel is meant to uh be less of a a primer into consumer crypto and more about the Tactical of operating in uh and building a consumer crypto company these Founders have been around for a very long time and so I hope we can get into uh some interesting tidbits through this discussion um great conser crypto so uh trading and speculation drive a lot of crypto's attention and Innovation um and obviously all the Cycles we've all been through and so if you could remove the financial incentives overnight would anything valuable be left I can start I think experienced that firsthand with nfts being the meme coins uh last cycle when all the speculation was was inside nfts we had like bubbles and now all the speculators left so we are here to experience what is left with nfts without speculation and I see two fundamental values one of them is community you still want to be part of the community you're ready to pay several thousand for it not like uh $400,000 as for like a plus cycle uh maybe like the the biggest one is Crypt Punk right 100 150k it's still a great Community I'm going to go like to their Branch tomorrow so this is very fundamental very fundamental Market about like 100 million in in fees for everyone uh not too much for like five companies right we're battling for this Revenue but this is very fundamental another one is Art which is smaller than that Second Use case for nft which is like 20 million in fees for everyone and I'm seeing a new uh emerging one which is social uh which is great but very early maybe like 5 million in PH so that's that's what's left for the nfts see the same and m coins soon yeah I think adding on to that I strongly agree on the notion of community I think uh the wallet is the perfect form of identity it's pseudo Anonymous self- Sovereign user owned and you have money over IP natively baked into this uh identity solution using that as a mechanism to gate based on reputation I think it's a very powerful uh experience um again without speculation I do think that you know with the proliferation of llms longtail SAS the sort of uh economics of that is changing and I think pay per action or pay per use using microtransactions such as on stable coins uh I think will open up a new medium for for the onchain economy I'm not sure I completely agree actually um I think both of the use cases you highlighted still have a very strong financial component to it right so for example um even the metrics Alex mentioned for why these things are clear signs of traction where was very much so revenue and volume how much are making I think if you couple in trading which is buying and selling stuff with the whole financial sort of like landscape then crypto's primary purpose is almost entirely financial and the reason why is because like crypto's most useful for proving scarcity and almost every time when you have something that is scarce there's some sort of financial Market that sort of emerges around it and crypto does a pretty good job helping us track that scarcity and sort of like well couple the finances with it but without that almost everything we have right now can possibly be done with web 2 infrastructure and it'll be done pretty well probably even better than it can be done in crypto right now other than the financial stuff yeah o I like it some some variety of opinions on this panel um and so in this kind of next upcoming cycle you guys mentioned art communities microtransactions payments um what's the kind of next upcoming shift you guys are really excited about um especially having been Founders that have weathered multiple Cycles at this point I can start again so it's funny that you mentioned U the first question what what would happen if we remove the speculation so that's actually the the opposite of the direction we're going we are adding speculation back so that's like it's not a secret that it's not a surprise that the pump fun is the most like successful consumer product today uh in this cycle and it is because it's fun people people earning money losing money is super fun to do so that's that's the direction we're taking we're coming back to consumer market with the financialized trading product for nfts uh for the upand cominging chains where people would be able to speculate get burnt get fun and yeah enjoy enjoy life yeah I I think for most Cycles at least the previous Cycles there was this expectation that we would see net use new use cases emerge in crypto and those use cases will sort of like power user adoption um I actually don't think that's the case going forward I think M for most new tech within the first few years you have a very good understanding of what you can enable with that Tech so take for the internet um within the first like say 10 years we knew things like e-commerce social things like um what's it called um TV and radio are going to be pretty big on the internet I think crypto already knows the things that's going to be big on crypto most of it is speculative most of it is trading most of it payments most of it is sort of like just tracking scarcity of assets um and from that perspective the goal here on now is not necessarily coming up with entirely new systems that will give people value more so trying to find a way to make these systems easily accessible by the people who want them um and I still think like that's something that we're yet to sort of like do a pretty good job at um and there's a lot of tools companies and players out there doing that and I think that's great yeah I think um we're building a consumer facing app and with if you are targeting the crypto consumer there's only like probably like a million users that are actively on chain playing this sort of uh Casino like game if you're targeting the non web3 consumer uh the approach for like top of funnel all the way to the end State um you know most consumers aren't used to hitting connect wallet and then immediately asking immediately resolving a payment to get something in return and so I think uh some of the tools we're using um some of the approaches we take is basically uh paying on behalf of the user uh like sponsored gas as a as a mechanism and also um being able to use some of our tools without ever needing to pay but we keep the wallet and your IP address as a reputation mechanism so you don't obviously spam us or sible US um that sort of the approach we're take yeah and so um you all touched on points around um speculative use cases but also trying to figure out ways to make the experience as easy as possible um and so how are you guys thinking about retaining your users especially over the course of evolving use cases evolving tooling that you're using what has been the most successful strategies and uh in kind of retaining your user base into your product we don't have we don't have a consumer facing company so our user base is primarily sort of like apps and wallets and for them the goal is always making sure they have the best possible experience so that they can give that experience to the users um and if you're satisfied while the users are satisfied and by extension we're doing well for ourselves so that's been our our goal basically putting our customers first and making sure they have the best possible experience with the tools that they're using and also trying to sort of anticipate the type of things that they're using want to do down the line and sort of like provide them with the tools to do that pretty well that's been our strategy U but I'm pretty sure that is drastically different from what you we would be doing if we were a consumer facing company like just for context like my first two three years in crypto was spend building a social network on top of the Bitcoin blockchain and the amount of work you have to do to S of keep end users excited about um just tools that are just crypto Affiliated but not necessarily speculative is drastically different from just sort of like doing things that people want to do with speculative Assets in crypto land right and I like that you mentioned the The Social Network um I think my my entire thesis about retention in the in the crypto is that every successful crypto app today is a network and whoever has the network effect has retention whoever doesn't have Network effect doesn't have retention like you have a wallet with people send usdc usdc has Network effect usdt has Network effect un swap has Network effect every network has retention and people people interact with each other right and that's uh that's why that that's why they stay if they don't find who to interact with they're living does we we think about I'm the moderator but I still have something to say about this but uh we think about this a lot in in the wallet World especially with embedded wallets where yeah like the whole point of crypto apps is composability and often people are staying engaged in an in an app experience because there are composable things to do whether it's with forecaster like Aussie app or with nfts or in general and so um yeah that's a big part of it that makes sense I think uh with us uh We've really taken uh a mobile first approach back when we even started two years ago and so um I think the sort of model I have is uh capture attention enable retention and actualize intention in that order and you're you're able to basically tape uh bips on actualizing intent but there has to be uh a medium to enable retention repeatedly and so push notifications on mobile are basically the dominant medium through which web 2 proliferated and created a relationship with their user but crypto is very web Centric where you know you use the extension it's very difficult to keep a retentive user base uh with just web- based uh mediums um and you know also I am building a sort of messaging based social network and um we had a very hard time early on uh finding pmf uh we were focused on sort of the Dow Space by building like a decentralized Discord uh didn't really find pmf there but you know when these M came out it's so powerful because it's infinite permutations of data and with social networks what you need is conversational liquidity how do you enable end number of interactions between actors you can now bootstrap that with AI agents um on the other side to enable retention and intention um within within your app immediately got it cool um this next set of questions is a little bit more company building oriented because I think there's a lot of folks in the audience that are thinking about starting a company in crypto um thinking more about consumer crypto and so um curious what's an uncomfortable reality that operators in your specific verticals across AI chain abstraction nfts um refuse to acknowledge when they're getting started refuse to acknowledge refuse to acknowledge so what's an uncomfortable truth about building a company in the space you're building in yeah sometimes it's like often times it's too early I think that's one of the uncomfortable truth I still feel like even for us even for nfts it may be still even too early where we have a bunch of problems on the infrastructure side that we needs to solve uh for like a good consumer apps to be available and then yeah you're you're taking a bad it's going to be hard and then it's like you have no control over the market where it's going to grow or it's not and you sometimes you just sit there and wait for the market to arise so yeah you need to have a very high conviction you're going to if you're starting company you're going to probably spend like 5 10 years building that so yeah that's that's the thing you need to think about when you start a company you mentioned the infrastructure point is that more of a like you're waiting for other parts of the infrastructure to get developed okay interesting in what way well uh every every consumer application I think hit the scalability uh game like in 2021 nfts everybody's like okay let's create nfts oh it cost $100 to Mint one okay now let's create all two oh there's liquidity on L2 there's no interoperability okay let's wait for the bridges to be built and integrated okay we're sitting yeah definitely agree with Alex on the sometimes they just too early Point um so just for example we first raised our seed round at War Labs two years ago telling the story of simplifying web 3 ux um and it took almost a whole year before even the primary premise we were raising on which is just going to be this a whole explosion of chains to actually happen um and then once the explosion of chains Point happened it took like another year convincing folks that hey just bridging from chain to chain wasn't the most pleasant experience let's try to find something else and I would say um even the sort of conversation around chain abstraction is just starting to sort of turn in a positive direction with wallets and apps suddenly starting um to get interested in chain abstraction but um had we had everything done and sort of like ready to go two years ago knocking on door trying to get people to sort of integrate the system it probably wouldn't have gone so well because people just didn't feel that need or pain yet so sometimes just being right there at the right time is exactly what you need to sort of like make an otherwise sort of like great idea takeoff yeah and I feel like in the infro world you can very much lean with narratives um and I don't think that's the same in the consumer uh app space I wonder if you have reactions to that um so the thing about consumer are consumers aren't as swayed by very technical research jargon um you can basically present a very compelling sort of idea for why something should be there and if the consumers don't find immediate need for it they're not going to sort of budge which makes consumer way more difficult to sort of like navigate if you're too early in some cases if you're too early in consumer you're just dead there's nothing else you can do about it um but yeah again like I think the secret there is making sure you actually monitor what people are doing and just try to sort of like provide slight optimizations on those and wait long enough to sort of like have your time Under the Sun um I say a good example of this is like there's right now A bridging player that is doing pretty well called um relay um and relay's whole sort of like mechanism for moving funds around is like give us your money and then we'll give you money again back on some other chain there's some elements of trust with relay um had relay been launched two years earlier it probably wouldn't have gotten that much sort of like traction because two years earlier there was all this talk um conversation around Bridges being risky and possible hack and you have to trust a bridge operator the appetite just wasn't there there was a lot of like spooky conversations that users were aware of about like hey the problems with sort of like having a trusted intermediary um but now the times have changed right and now really sort of like benefiting immensely from this sort of like change in um times for consumers so again like I think for Consumer apps just being that the right time is sort of perfect for you to sort of like do well yeah I think uh you know with crypto the half-life of narratives is so quick that um being able to tell a story that can be fluid enough for the narratives that come I think is very important and also I had some trouble early on with um just hiring because I think um the time to liquidity in crypto is so quick for for for what we do that it can attract sort of mercenary individuals that want to want just the liquidity and exit it um and also if there is a a token attached to it it does attract basically a certain type of a crowd on Twitter that can reflexively uh alter your course that you wanted to do as a Founder so I think those are some things that um I think about a lot as well and have you guys found that with the recent kind of memec coin meta that most social projects are reliant on launching a token um or do you do you think that that's not true uh I know a lot that are but um I really don't think it's the right way to do it um you want to you don't want to have a liquidity event and then build your product you want to build your product have retention utility and then have the liquidity event that can drive further Network effects with a token as a flywheel for growth and I think um it's great that we get to see everyone experiment but uh I don't think using u a meme coin for for your main product uh maybe an anary product is okay but not for your core product I think most successful social products don't have a token yet actually like farcaster doesn't have a token Rodeo doesn't have a token zor is kind of social doesn't have a token yeah they will probably launch a token at some point but then they're all trying that's actually one category that I think is can live with the token for some time which is which is exciting um I guess I have some I still have some sort of PTSD from social days but I'm I'm not entirely sure I'm sold on any crypto social platform yet I I think like the general idea for social networks have historically done really well when they come around new content forms and they're capable of capitalizing those content fors to produce new experiences that users enjoy so like with Twitter you have what SMS so the whole 140 characters with Instagram the camera starts getting better so you're good to go um with Snapchat the front facing camera gets better so now you're better off with FR photos even Tik Tok and sort of like Vine all came when 4G internet was getting really good so like he had better um streaming video I'm not sure we found that experience yet for crypto other than possibly speculation right like the form factor the form factor maybe speculation is that form factor I would argue nfts were kind of that nfts got really close I agree yeah and but I think they couldn't they couldn't hold on long enough to sort of like make it become the final thing users were coming for right CU most I guess most users couldn't sort of like appreciate it as much as crypto heads did now the question is is there some form factor in crypto that can incentivize a user experience that users want to stick to long term like we're talking over the span of a decade which is like the main thing for social right you need to be around for like a decade to be able to capitalize on the sort of like return Factor um and I think if we're being honest perhaps crypto socials will look very different and they'll look more like pump. fun than um Facebook native big blue or Instagram um and if that's the case then they probably should be leaning more into speculation soon or rather than later taking it all the way back yeah circular I'm curious Alex if you have thoughts on the form factor question just given that you've spent so much time on nfts that gave me good thought Food For Thought nfts are more like people think nfts are content but it's all it's not really content it's more like uh like a feature of your like online identity that's why it's a little bit different but I I agree did did not reach the the potential that needs to be like lens tried to do social network on nfts fully uh kind of I'm not sure it's working so far like Rodeo is also doing kind of social network with nfts probably the most successful use Cas so far but I agree it's still like photo and video uh the successful maybe the most successful social network in cryp is like payments Network you can like you can pay people and that's like kind of another form factor uh yeah but it's it's good I guess if you if rank like cash app as a as a as a pseudo social app then like crypto is well positioned to sort of like have a global cash appes system right with social features that sticks around um but yeah I do think like again payments money finances sort of like speculation will probably end up being core parts of whatever social network crypto have you seen zerox people app I have not it's like uh some guy who like cashed out 200 million from his previous startup he created social network where you can see the net worth of the person when you're following them like the network okay it's like 200 million following yes and it's funny I think they also add in Social feeds and so you can see if they're tweeting about a token or something and then they they've just dumped it it's just gives you some better context on actually I just whether to buy it or not yeah sorry about that sorry for cutting you off um but just hearing about the social feeds made me remember there is a web2 trading social platform called public that's a mix of a and trading and why doesn't a version of exist for crypto I feel like it's the perfect place for it right a lot of crypto sort of like trading comes down to like hey knowing what other people are doing and sort of getting there before others I think Vector is doing something like that yeah right last question we're about 30 seconds out um Ai and crypto nfts chain abstraction one needs to go which one is overhyped and why um well ns are definitely not overhyped at this point yeah uh no all all need to stay No One Needs to Go AI will is is hyped it will come down but it it's the most hottest thing we have right now let's let's explore what we can do with it okay I volunteer as tribute the hope is that chain abration goes away okay I think like once you have features do really well um over a long enough time right you don't actually remember them anymore yeah no one thinks about like anything in the internet stack when you're sort of like using the internet I think similarly when it comes to chain abstraction if chain abration works pretty well within the next 2 3 years you shouldn't be thinking about chain abstraction when you're interacting with crypto um I still think there's going to be room for AI because you're going to be thinking about whatever AI chat you're talking to I think there's still going to be room for nfts because you're going to like know there's this asset that sort of like is tied to your identity or whatever you're doing but the hope is in two three years from now no one knows about or even cares about chain abstraction because it's done so well getting integrated I love it I i' I'd agree and I I think uh i' also say Chan up scrash and I think uh the end user should never know uh have to think about the security implications and AI is obviously going to stay around it creates infinite information in an area of infinite information you need digital scarcity which is nfts um and so I think uh those two will be very important in the future thank you for the sacrifice thank you so much [Applause]