Bitcoin showed us that a decentralized monetary system can work in practice. Ethereum did the same for applications of all shapes and sizes. DeFi extended these principles, demonstrating a wide array of large-scale use cases for institutions and traders alike.

Now, as an industry, we’re on the precipice of our next major tipping point.

Consumer crypto.

It has exploded onto the scene over the past year and continues to dominate web3's zeitgeist. Conferences, podcasts, thought leaders, investors, and builders are all doubling down on its themes.

Major investors are prioritizing consumer crypto projects, particularly in social protocols, apps, and games, highlighting the industry's evolving focus and future direction.

Today, consumer crypto resembles the early days of online businesses during the dot-com boom. While many consumer-focused protocols and apps may be short-lived, a select few are poised to stand the test of time.

Currently, we're in the nascent stages of this boom.

Over the last 5 ETH Global hackathons, 80% of builders building with Push Protocol have chosen to ship projects focused on the consumer crypto niche. This is a major shift from 4 years ago when the same could be said for NFT marketplaces.

However, when you search “consumer crypto,” you get a wide variety of answers as to what it is, why it matters, and where it’s going.

There’s never been a better time than now to sift through the viewpoints and fully grok it.

In this post, we aim to:

• Establish a clear definition of consumer crypto

• Explore the key reasons for its importance

• Comment on its future trajectory

Industry professionals are thoroughly split on exactly how to define consumer crypto. Some suggest it all comes back to NFTs and their related token standards. Others say everything in the industry is moving towards consumer scale and has always been meant to go that route.

Others term it the movement focused on web3 apps that are purpose-built for everyday use by billions of people. While this is closer to the point, it doesn’t quite hit the nail on the head either.

Consumer crypto isn’t solely about web3 apps becoming household names.

It also refers to every layer of the stack being hyper-focused on providing novel experiences powered by the blockchain, smart contracts, tokenization, and everything in between. Zooming in, it could then be said that consumer crypto is the niche of the greater crypto industry that’s focused on building the future of all apps and services, powered by blockchain tech.

However, that’s still not quite it.

There’s something more that needs to be included because to scale all things crypto or more accurately, all things web3, to the masses, we need improvements to every level of the industry’s aggregated UX.

However, this concept needs to be simplified for the average person to grasp it. To establish a universal definition for consumer crypto, it's important to first identify and address what isn’t working.

Most consumers object to using crypto or anything related because they don’t see the need to switch to it. They return to the option they already trust and continue interacting within its walls.

This measure of how often users keep coming back to an app is called “stickiness,” and it’s something that web3 apps have yet to achieve on any comparable level to web2’s household names.

Think about why Slack is sticky, even for Web3 teams.

Once you pass a certain threshold of all-time messages sent, it becomes the standard for communication in your workplace. It doesn’t matter, in most cases, how many alternatives pop up. Your historical conversations and all the documents you’ve ever shared are stored in your team’s Slack.

What about Google Meet?

It’s a sticky progressive web app because it seamlessly integrates with your calendar and it just works. You can schedule a meeting in four clicks, counting inputting participating emails, and you don’t even have to have a Gmail to join one you’re invited to.

People keep coming back because, above all else, it’s intuitive to use and it doesn’t lock anyone out.

Consumer crypto, as a whole, is a vision to build out sticky apps that scale far beyond the web3 niche. All in all, the key goal is for them to be just as intuitive to use as their legacy counterparts and more attractive due to the new, on-chain-enabled features they champion.

To narrow down what this means, let's consider the rise of DeFi.

Since 2020, the success of protocols like Aave, Uniswap, and Maker has demonstrated, in practice, the power of transacting with minimal fees, globally, and without intermediaries. Truthfully, the term DeFi, stretches far beyond these protocols and their counterparts to all of crypto that deals in financial use cases. Even Bitcoin, for example, may be considered “DeFi,” when it is used to store value, or simply, to do business.

As institutions like Blackrock continue to buy in, that’s only becoming clearer by the day.

While both DeFi and consumer crypto are niches within the same industry, they have considerably different target markets. DeFi aims to provide the future financial system, piece by piece, to institutions, traders, and individuals.

Consumer Crypto is the vision of developing intuitive, sticky, and user-governed applications that leverage blockchain technology to deliver seamless, chain-abstracted experiences. These applications extend beyond financial services, enabling any user to engage with a diverse range of web3 applications for various purposes, fostering widespread adoption, and enhancing everyday digital interactions.

Below, we dig into why that needs to be done, and how we, as builders, can do it.

Why does consumer crypto matter?

The top hurdle for web3, as a whole, continues to be how inaccessible it is to the average person. To change that, we need to commit to radically improving how we onboard new users to our apps, how we seek to retain them, and what use cases we’re building for as well as supporting, through grants programs, hackathons, and otherwise.

Once we achieve this, it will become clear why consumer crypto is essential and why it represents the next paradigm shift for all consumer apps.

Seamless Onboarding

From approval signatures to bridging, to holding multiple tokens just for gas fees on different networks, to managing multiple wallets, and beyond, web3 apps are rife with complexity. Changing the status quo requires unifying the user experience regardless of all these intricacies.

A commitment to learning from web2’s successes and failures is a good start.

Chain abstraction across the board, as we describe in a past post here, takes us further.

Spinning up an account on a web3 app must be as easy if not easier than doing so on something like Facebook. Simplicity needs to reign across the board in our approach to UX and we need to commit to benchmarking to leading legacy apps that are household names to ensure this happens. Moreover, putting all of the innovations that make this industry great on the back end does not mean hiding them.

Until all of this is achieved, onboarding will continue to be a major barrier to widespread adoption and the advent of an age in which on-chain apps supplant off-chain apps.

Long-Term Retention

Raising retention is a multi-sided problem. To retain users over the long-term, we must ensure better and seamless UX.

With web2’s common approaches to it and the unique features that web3 has in mind, it becomes easier to solve.

Think about the apps you have on your phone. What reminds you to check them? Push notifications. There’s a reason we still need them, even in this space. When done right, they’re one of the most effective methods that apps employ to retain users.

When your phone’s locked and you receive a push notification saying that you got a new message from a friend on an app, you check that app. It’s a reflex, in most cases. The same principle applies to web3. If you’re a trader and you get a push notification in your wallet that says the asset you’re tracking has reached the price you’re looking for, you’ll head to your account and trade that asset. Delegates for a DAO who receive the same sort of notification that a vote has begun will head to Snapshot or wherever that vote is being held to participate. The same goes for fans of a particular NFT artist who receive a ping that a new drop is live or fans of a podcaster who see that a new episode is live.

Push notifications are still key to keeping people engaged, even on-chain.

Beyond push notifications, numerous other methods for enhancing user retention exist, both predating web3 and emerging from it. The initial rise of NFTs has already shown the power of royalties, guaranteed in perpetuity, by smart contracts. Most legacy marketplaces and social media platforms offer only negligible profit-sharing, if any.

It’s the call for change we’ve seen since the earliest days of social media. Give us apps that prioritize the users, including creators, first, above all else.

Add in DAOs as well as the lego-like composability that smart contract-based applications have and you’re starting to get the picture as to how consumer crypto can do that. At present, both creators and general users lack meaningful upside in the apps they use daily. Any significant gains—monetary or otherwise—are subject to the whims of centralized entities.

User-led apps flip the status quo on its head, for the better.

If something isn’t working, it can be changed via a vote. Apps evolve based directly on what their communities want to see and any advertising that is done is opt-in.

Any revenue that’s generated goes both to the app itself, to keep the lights on and keep it scaling, and to its community, with the latter receiving the lion’s share.

Token-based incentives such as higher statuses and higher rewards based on longevity and participation further increase retention even further.

Diversification of Use Cases

However, none of the above matters if we, as an industry, can't demonstrate a stronger commitment to a broader range of use cases for our apps. Currently, the majority of existing web3 apps are DeFi-focused.

Consumer crypto aims to change that by providing intuitive, fun, sticky apps that rival those that are today’s leaders in the social media, gaming, and marketplace niches. Chain abstraction, cross-chain requests, and related solutions are making it easier than ever for that to happen.

As previously mentioned, through recent hackathons, we’re already able to see consumer apps leading the charge.

Consumer crypto matters because it’s the movement through which web3 expands its boundaries to the next billion users.

It’s the only way that we finally cross the chasm to being the standard-bearers for all online interaction instead of a tech-heavy alternative.

Once everyone in our industry shows commitment to that in practice, consumer crypto will become the dominant driving force for the industry’s move to expand crypto beyond finance and achieve widespread adoption.

What’s the future of consumer crypto?

Since Bitcoin's inception, we've advocated for a financial system and a world that levels the playing field more than ever before. Our apps need to strike a balance—easy to use, yet demonstrating these principles in action. We need more engaging, participatory, on-chain economies, of all shapes and sizes, embedded within enjoyable user interfaces.

This doesn’t require reinventing the wheel. Our next break-out moment may come from a team saying, “How can we make a better Instagram with features and functionalities unique to this industry?”

That app would likely also be DAOified because you can’t have consumer crypto without governance by the people, for the people. Decentralized Governance, as an overarching model for our future social apps, aligns perfectly with the broader vision of consumer crypto, as it ensures apps evolve in a more participatory fashion than ever before. Web3-app users can have a direct say in how the app they’re using evolves as well as how it approaches key questions like compensation for creators, which is technically not possible in traditional web3 apps, where all control lies in the hands of the few.

Consumer crypto is the next Schelling point for our industry.

It's the driving force propelling us toward a future where web3 becomes the standard for all global consumers' online interactions. To travel further down that road, let’s start by building things on-chain that people beyond our sphere, legitimately want to use. Let’s also commit to making crypto easier to use than ever.

With that, we might reach an age in which a web3 app is just an app and a protocol is just a structure behind it.

An age of seamless interaction, on-chain, where users no longer have to bother about the underlying chain behind their favorite applications.

Here at Push, we’re all aligned and focused on this vision.

If you're building in consumer crypto, then we're here to support you every step of the way. Reach out to us and we’ll get you plugged in with our grants program.