By
Chimamanda U. Martha
April 19th, 2024
The crypto projects that are flourishing cracked the C that’s at the heart of a robust and diverse ecosystem – they’ve built a community.
What makes for a great crypto project that can withstand market cycles? A startup that can navigate bear markets and bull, and emerge from the other side intact? Team, tech, timing, and product market fit all count, but they’re not the biggest determinant of whether a project makes it or withers on the vine.
Analyze the crypto projects that are coasting through the current economic crisis, and a pattern emerges. The ones that are flourishing have cracked the C that’s at the heart of a robust and diverse ecosystem – they’ve built a community. Here’s how they did it and why it matters so much.
Putting the Community in Crypto
All crypto projects talk about building a diverse ecosystem of developers, users, and enterprises, but few succeed in converting these words into action. Some start off with noble intentions, only to falter as the magnitude of the challenge bears down on them. Others never truly meant it to begin with and were running on pure hopium that an extended bull market would lift all ships, bringing an army of new users flocking to their network.
Users are fickle, and won’t wait years for repeatedly promised products to materialize. Even the most patient of bagholders will jump ship when the mainnet – and the moon – are indefinitely deferred. As early backers leave a project’s ecosystem, it can induce a death spiral as network participants scramble to abandon the sinking ship.
The Mixed Fortunes of Crypto Ecosystems
As an example of what this desertion looks like, one need only look to Loom. Once the darling of Ethereum scaling, the layer two has been buffeted by the departure of senior figures including former CEO Matthew Campbell, who stepped down in February. The managerial changes prompted Chorus One, Stake Capital, and StakeWith.Us to withdraw their support as network validators. Simultaneously, several dApps, including Loom’s most popular dApp, Axie Infinity, announced they were leaving to seek scaling elsewhere.
As for what a project moving in the opposite direction looks like, Matic stands out as a contender for a functioning community-oriented endeavor. Its focus on the needs of its community, rather than those of its architects, have seen more than 500 validators apply to participate in Counter Stake, the staking program which precedes May’s mainnet launch. The number of dApps utilizing its Plasma-based scaling network has also grown steadily. More than 50 dApps are now committed to using Matic to scale their blockchain applications, including Decentraland and the odd Loom defector such as Somnium Space.
Matic’s success so far has been about more than merely opening its doors for business; the project has actively sought crypto projects to build upon its scalable blockchain, and has actively supported their efforts, facilitating token and NFT sales via Matic Network, as was the case with BetProtocol’s $BEPRO token sale. This hands-on support has earned significant goodwill, and had the knock-on effect of enticing yet more dApps. As a result of these efforts, Matic is now attracting new dApp projects on a weekly basis, all of which augurs well for its mainnet launch.
Community Isn’t Created in a Vacuum
Excluding the most popular blockchain networks such as Bitcoin and Ethereum, the most successful crypto project in the past year has been Chainlink. It has prospered not so much on account of its tech – it’s by no means the only oracle solution out there – but through its partnerships. Projects great and small, from Google to Synthetix, have been convinced to use Chainlink as their oracle solution, turning the project into the CoinMarketCap of blockchain smart contracts.
These are businesses utilizing Chainlink for commercial purposes, not token-holders supporting the network for speculative or emotional reasons. Nevertheless, the same lesson applies: through onboarding a diverse array of users, across multiple verticals, Chainlink has laid deep foundations.
As world events accelerate the reversion to decentralized communities, and local becomes the new global, the case for strong communities has never been more evident. Crypto projects that can capture this cooperative spirit will generate the goodwill and support to survive the current downturn. When fairer conditions return, those community-building efforts will yield dividends.