At the end of April, I attended the Miami Tech Week and Crypto Bahamas forums, during which I noticed that one of the most talked-about topics was “x-to-earn”. This model is becoming more and more common, with “x” representing any kind of behavior that can be exchanged for rewards in the form of cryptocurrency. With a wide number of blockchain products appearing on the market that turn jogging, gaming, or even sleeping into a means of earning money, it’s no surprise that x-to-earn is becoming so popular.
However, with the US Fed shrinking the balance sheet and raising interest rates, cryptocurrency has recently entered a bear market. Just look at what’s happened to Bitcoin – the market’s most high-value cryptocurrency just saw its price fall below $30,000 US dollars, which is less than half of its peak price last November. This resulted in a sharp dive in the prices of many x-to-earn-related cryptocurrencies, and x-to-earn products immediately started hemorrhaging users that were only attracted to the “earn” side of the equation.
Though x-to-earn is indeed good at attracting a lot of eyes in a small amount of time, relying on this model is not a very sustainable prospect. It’s a lot like how startups in the web2 world are trying to stay competitive by burning through their capital to offer discounts or rewards, but once the resources needed to provide those benefits are used up, their product still offers no real incentives, and users vanish. If users can’t enjoy the past high yields of crypto trading during a bear market, how can x-to-earn products survive until the next bull arrives?
The key is in the “power of product”. No matter what kind of tech you use, or whatever trendy business model you adopt, in the end, it all comes down to two fundamentals: does your product attract users on its own merit, and can it retain those users? Only after you create willingness to use your product will you be able to create a stable base of success to build upon and grow.
Silicon Valley startup accelerator Y Combinator promotes the same mindset. In the early stages, a startup team should spend their time engaging with users to understand their needs and pain points. Although this might make it seem harder to scale, this approach is vital to developing a product that users will love. If you try to scale too quickly, it will form a barrier to understanding the needs of your user base.
This is why the focus should always be on making a good product, with x-to-earn serving as a marketing tactic to reach more potential users. Sadly, so many x-to-earn products put the emphasis on “earn”, and in doing so lose users in droves every time the market takes a bad turn.
Do you want to unlock the ability to rise above the crests and dips of the market? The key is this: return to the essence, and always remind yourself to put the user and product first. Those users are sure to become your strongest breakwater during tumultuous weather.