Newsletter: Bringing the Consumer to Crypto

Don't Bring Crypto To The Consumer, Bring The Consumer To Crypto...

Happy Monday!!

Welcome to edition 160th edition of the Forefront Newsletter. If you’re new here, we give you a weekly roundup of the best news and insights at the intersection of crypto, culture, and community.

This week we're covering:

• The consumer crypto debates…
• ...why NFTs Can't Die...
• ...new Vitalik essay…
• ...Nouns Protocol Rewards...
• ...the Crisis of Legibility...
• ...and more!

Let's get into it...

Week’s Highlight

Last week's Seed Club Demo Day was eye opening to say the least. If you weren't bought into the "consumer crypto" narrative before, you have no choice but to at least consider why folks might be excited after learning more about the companies in that cohort.

There are a few different threads to pull on here.

First, many have observed that "consumer crypto" isn't a new industry focus -- in fact, some investors have been on this wave for a while. Peter from 1kx published a thread on the firm's investments into consumer crypto teams and the various verticals they're excited about: Autonomous Worlds, crypto social, creator platforms and labels, and more. 

Meanwhile, team members from Paradigm, Variant, and more either discussed or reaffirmed their consumer crypto efforts, raising many eyebrows as to whether this is a fad (e.g. "play-to-earn") or possibly a misrepresentation of the market.

Regardless, it's clear that founders are looking at crypto through a far more holistic lens: how do we use crypto to create novel digital experiences rather than build tools for their own sake?

That said, the second thread to pull on here is what "consumer" we're really building for. The crypto industry is a bit of a cult, and many folks have noted that today's apps are too often built for an existing group of users. But what if that's okay? Onchain actions -- from minting to onchain voting to swapping tokens -- are novel behaviors. Apps like friend.tech-- while heavily speculative -- and protocols like Zora have demonstrated novel business models that can sustain businesses with a relatively small group of regular active users.

Pulling from last week's discussion of crypto being a "new planet," what if "consumer crypto" was really about building fun experiences for existing onchain citizens, so much so that outsiders can't help but be intrigued to learn more?

Take Note. The consumer crypto meme has certainly taken hold, and new projects are popping up daily to support it. Where the ecosystem heads from here will largely be dictated by the founders building enjoyable, useful experiences for all types of consumers and many different markets, big and small.

What's Poppin'

Mapping the New Internet This article from Joel John delves into the importance of online identity and reputation, drawing parallels between the early internet and current blockchain networks. It highlights how trust, established through verified identities, is crucial for a network's evolution and user engagement. The article then explores the potential evolution of identity within blockchain applications, emphasizing its necessity for addressing market exploits and regulatory compliance. Ethical considerations around identity evolution, especially concerning the blockchain ethos of anonymity, are also discussed, pointing towards a nuanced approach to identity in fostering a new generation of applications​.

The Barrier to Mainstream Crypto Adoption Isn't UX -- It's PMF Writing for CoinDesk, Li Jin emphasizes the importance of product-market fit over just improving user experience (UX) for accelerating crypto adoption. The essay suggests that fulfilling enduring human needs is crucial, as seen in successful consumer startups like Amazon and Facebook. Examples like NFTs and the first iPhone are cited to show that users are willing to overcome UX hurdles if the product significantly benefits them. The article notes that crypto has mostly been explored in the financial domain, which can be limiting, and sees potential in addressing other human needs like belonging, community, and entertainment. It encourages crypto builders to innovate beyond financial applications to enhance the human experience and achieve broader crypto adoption.

NFTs Can't Die Simon de la Rouviere is a pioneer of the NFT -- and broader crypto -- scene that we have today, and this essay is a reminder why. Simon refutes claims of NFTs' demise, asserting their enduring value lies in the blockchain's ability to chronicle history, contrasting traditional databases. He criticizes the focus on financial speculation, urging a narrative shift to appreciate blockchain's record-keeping. The piece foresees, despite some NFTs losing relevance, their histories becoming intriguing digital artifacts for future exploration, emphasizing the need to recognize NFTs' value beyond mere financial metrics​​. This is a must read.

Should Ethereum be okay with enshrining more things in the protocol? Wake up, new Vitalik essay just dropped! The essay discusses whether Ethereum should enshrine more features into its core protocol. Initially, Ethereum aimed for minimalism, leaving most functionality to be built atop by users. However, there's a cautious interest in enshrining more features to address various users' needs. Vitalik examines the evolution and challenges of this philosophy, particularly through the lens of account abstraction. He reflects on potential protocol amendments to better cater to users' requirements while maintaining a simple core, illustrating the ongoing dialogue within the Ethereum community on protocol evolution​. This is a critical debate for the Ethereum community (for a micro version of this conversation, check out discourse around The Burn).

The Metaverse is Here... A few cool things were released this week. Meta spotlighted their new virtual avatar tech in a Lex Fridman interview with Mark Zuckerberg. They also unveiled their new smart glasses, with cameras and AI built in natively. "Metaverse" is no longer a hot topic of discussion, but the vision Meta laid out a couple of years ago is quickly coming to fruition. With the onset of more spatial tech (e.g. Apple Vision Pro), it will be fascinating to see how our lives are enhanced over the coming few years and how quickly consumers are to adopt this tech.

Culture Beat

• BAYC x BAPE. BAYC is collabing with BAPE, and while details are still coming out, it's clear that access to the shirt and other potential items in the collection will primarily be exclusive to holders of BAYC digital collectibles and those who own BAPETAVERSE collectibles. However, a broader release is expected across various BAPE retail locations and on its official site.

• Pudgy Penguins in Walmart. Access to the tee and other potential items in the collection will primarily be exclusive to holders of BAYC digital collectibles and those who own BAPETAVERSE collectibles, BAPE's Web3 collection. However, a broader release is expected across various BAPE retail locations and on its official site.)**Each toy will come with a unique birth certificate that allows the user to claim unique traits for their digital 'Forever Pudgy' character inside Pudgy World, an online virtual world built on zkSync Era, by scanning a QR code.

• Naomi Campbell in Humane AI Pin. The notes describe the pin as a "screen-less standalone device and software platform built from the ground up for AI," and that the wearable "uses a range of sensors that enable natural and intuitive compute interactions, and is designed to weave seamlessly into users' day-to-day lives."

Inbox Signal TL;DR

The eleventh edition of Inbox Signal just went out to Forefront Members this weekend. Here's a taste of the stories:

• Spotlight Capsule 010
• The Nakamoto Challenge
• The Crisis of Legibility
• Nouns Protocol Rewards
• Daily Jam -- Experiment

Fun with Fundraising

• Orb -- a web3 social app on Lens Protocol -- raised $2.3M led by Superscrypt and Founders, inc.
• IYK -- a digiphysical platform -- raised a $16.8M seed led by a16z.
• Pimlico -- a smart account platform -- raised a $1.6M pre-seed led by 1Confirmation.
• Fhenix -- a privacy-focused blockchain -- raised $7M led by Multicoin Capital.) 

The information in this newsletter is not intended to constitute legal, financial or investment advice and should not be construed or relied upon as such. Any opinions reflected are the opinion of the author(s) of the newsletter only and not necessarily of Forefront. Please DYOR.