Going further #1: Consumer crypto

Overview of Abstract's take on consumer crypto

Since the beginning of 2024, a surge of interest for the idea of "consumer crypto" is visible within the crypto community. With the introduction of Abstract, focusing largely on this concept, it is now essential to understand fully what is consumer crypto, and how Abstract is planning to achieve it.

"The adoption of blockchain-powered applications that serve billions of people in their everyday lives for personal use" - Luca Netz

As Luca Netz defined in this definition, consumer crypto include all crypto projects that are built, delivered and grown for a common goal: mass adoption.

What is mass adoption ?

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Abstract approach to mass adoption is that it is a 3-phases processus.

Phase 1 : Discretionary Spending

First 50 millions users

Consumer apps that occupy a person free time. These types of applications are more prone to virality and fun, easier to sell to consumers, and building them onchain solves problems that Web2 applications cannot address.

Consumer categories:

• Gaming

• Trading

• Betting

• Social

• Casinos

• Digital Collectibles

• Tokenized culture

Phase 2 : Necessary Spending

Road to 250 millions users

Apps that will integrate crypto into more aspects of life beyond free time.

Consumer categories:

• DeFi

• DePin

• Digital Media

• SaaS

• Digital Commerce

• Payments

Phase 3 : Essential Spending

Billions of users - The world onchain

This is when consumer applications are built around essentials, enabling users to do anything and everything onchain that they could otherwise do offchain.

Consumer categories:

• Online Banking

• Credit

• Insurance

• Tokenization (RWAs)

• Data

• IoT

• Identity

• Voting

Each phase paired with user adoption growth (source: https://abs.xyz/blog/articles/what-is-consumer-crypto)

The Problem

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Why haven't we achieved major user adoption?

Over the past 10 years, blockchain companies have followed a "general-purpose" strategy to boost consumer adoption, raising billions to power the next generation of the internet economy.

Visualization of "general-purpose" blockchain (source: https://abs.xyz/blog/articles/what-is-consumer-crypto)

However, this approach has led to fragmentation, hindering mass market adoption. Indeed, the strategy is ambitious but requires resources and talent many teams lack. As a result, many fail, wasting time and energy that could have been better used to achieve true mass adoption of blockchain technology.

The Solution

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Aligning the focus is necessary to break through to mass.

Blockchain adoption has been slow not due to inability, but because the right approach hasn't been taken. The key to mass adoption lies in curating specific, attractive features that draw users in, rather than relying on general-purpose blockchains. The concept of a "Consumer Chain" is not just a slogan but a crucial mindset that the industry has yet to fully embrace, for example, with the "consumer-centric" strategy.

Visualization of "consumer-specific" blockchain (source: https://abs.xyz/blog/articles/what-is-consumer-crypto)

Indeed, Luca Netz pushed the idea that the breakthrough for consumer adoption will come from teams hyper-focusing on premier attractions within their blockchain. Once they have an attraction that is driving people into their ecosystem, teams can then build around that attraction.

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Sources

https://abs.xyz/blog/articles/what-is-consumer-crypto https://x.com/jenndefer/status/1833951870353899692 https://www.project-syndicate.org/onpoint/consumer-crypto-nfts-business-use-cases-expanding-by-steve-kaczynski-and-scott-duke-kominers-2024-02