There are over one hundred thousand crypto projects in the web3 space currently, offering different innovative services ranging from NFTs, DeFi, GameFi, etc. But many of them often fail to go mainstream even when they provide appealing utility. Some go on to make the spotlight but eventually fade away when the market turns bearish.
It can be quite challenging to battle this out and many projects eventually leave the space after several trials and errors. If your crypto project must scale and attract new users then there are a whole lot of strategies you must have in your arsenal. In this piece, we covered one of the most critical components that will give you an edge in the web3 space - community.
Why Every Crypto Project Needs a Community
Community building is always a focal part of the growth strategy of businesses worldwide. Ever since humans started building products and offering services, we have implemented several ways of reaching out to a community through PROs, welfare packages, education and entertainment.
Early companies conducted quarterly community services like philanthropy efforts to orphanages, war victims, scholarship funds, TED talks, etc. The idea is to get people rallying for them based on their good deeds in these communities. For example, companies that were established in Africa between the 70s and 90s got the average individual clamouring for them after building roads, and bridges, and awarding scholarships for children to study abroad.
While this has worked quite well for some companies, the emergence of web2 saw a shift in the way businesses attract and build communities. Instead of spending so much resources to give back to the community, web2 companies like YouTube, Facebook, and Twitter spent resources on developing a platform where communities could easily be formed around specific memes. Unlike traditional companies that build a product/platform and spend lots of effort to form a community around it, web2 companies do somewhat the opposite. Let's use Facebook (Meta) to illustrate this.
Zuckerberg and co-investors spent a lot of time and money on building Facebook to be a FREE platform where people "could build community and bring the world closer together." This enabled Facebook to attract over three billion users monthly. Instead of building a separate product to sell to this community, Facebook productized the community to generate billions of dollars in revenue.
A close look at many other web2 companies reveals the same process. Amazon builds a platform to connect a community of sellers and buyers and in turn, leverages this community to make its founder the second richest man on earth.
In all, we can see that community is critical to the success of both traditional organisations and web2 companies. But does the same goes for web3?
Community Building in Web3
The web3 space is quite young with new business models, market patterns and consumer behaviours that are different from the traditional markets. And as a founder, it's important you understand strategies that work in the world of crypto and how to implement them.
Web3 is built on the foundation of decentralization and collective ownership, meaning all web3 projects regardless of utility should be defined by their community. As this piece puts it "a strong community is the lifeblood of your cryptocurrency startup."
Take this away and what you are left with is another traditional organisation or web2 platform.
Since web3 projects are decentralized without a central authority, ownership and authority are restructured in a bottom-top process, where the community defines the product and its future. And this is a major reason for the increased adoption rate in many web3 platforms.
By surrendering ownership to a community, web3 founders shift responsibility from a small team in their basement to a diverse group of people worldwide across several cultures experienced in different sectors of life. When a crypto project is structured with community incentives, it tends to naturally grow on its own. Beyond utility, nothing attracts people more than the sense of belonging and ownership. And that is the selling point of web3. If your project lacks it, there's no guarantee it'll stand the test of time, especially during bearish seasons.
Imagine if every Rolex watch is unique and comes with commercial rights for owners. Or if the contents of Tik Tok creators earn them some form of ownership over the platform. The network will be quite monumental and more sustained compared to what these brands are experiencing now. Even if a more innovative watch manufacturer or social media platform comes around, owners/creators will want to stick around and find ways to improve Rolex/Tik Tok because of the sense of ownership they have over the platform.
People are more protective of the things they own than the things they use.
You may probably be reading this blog post now because of the sense of ownership you have about the project you're working on. You're researching and sacrificing your funds to ensure the project grows and scales to the top. Now, imagine if a thousand other persons feel the same way about your crypto project and they are sharing this responsibility with you, putting in the same effort without you paying them a dime.
"One will chase a thousand, two will chase ten thousand. Imagine how many a thousand will chase."
Crypto communities have helped in crowdfunding and building several projects to become powerhouses in the web3 space today.
Bitcoin currently has over 50 million wallet addresses and is considered the largest digital asset in the world; without a community of hardcore followers and miners, it would be worth nothing today. The market capitalisation of Bitcoin is a reflection of the belief and hard work of its community. Even Satoshi Nakamuto realised the importance of a community, hence he created the Bitcoin-talk forum in 2009.
Moving down the web3 rabbit hole, you'll see that since DeFi big boys like Curve and Maker switched to a community-based model, their users and market value has significantly improved.
Behind every successful crypto project is a vibrant community
One project that has gained significant momentum leveraging the power of crypto communities is the Bored Ape Yacht Club (BAYC). BAYC launched in April 2021, with 10,000 Bored Ape NFTs and granted owners commercial usage rights. That's like having 10,000 people help you market and build your NFT universe while making them pay you at the same time.
BAYC founders, Yuga Labs, went on to centre all of their product offerings around owners of Bored Apes - from the Mutant Apes to ApeCoin, and the Otherside metaverse project (maybe some more in the future). The community culture is so strong that owners of BAYC NFTs have organised several community meet-ups in New York, Hong Kong, and other parts of the world.
BAYC became a household name in the web3 space without Yuga Labs, spending a dime on marketing or receiving funding from any VC. All they used was the right strategy and a community.
One owner went on to create a backstory for his Ape on Twitter with the name Jenkins the valet. Jenkins the valet eventually spiralled into a side project and the more people committed to Jenkins, the more value it ultimately accrues for BAYC.
What about the Friends With Benefits (FWB) DAO?
FWB leveraged the enthusiasm of crypto folks to expand a small private Discord group chat into a burgeoning community involving over 2,000 members from different cultures. The FWB DAO has several sections where community members can have discussions on designer clothing, learning, parenting, stocks, music, community events, etc.
Still Not Convinced?
Web3 founders sometimes express fear in surrendering to a community, especially because they feel it will see them earning less for their efforts in building the project. However, Yuga Labs has taught us that founders with vibrant communities and the right tricks up their sleeves can earn way more by not retaining total control.
As much as utility has its place in the web3 ecosystem, you can't substitute it for the effort in building a community. For example, Dogecoin is a meme cryptocurrency with almost zero utility; but it sits comfortably in the list of top 20 cryptocurrencies by market capitalization. Why? Because of a hardcore community of traders, believers, 'memers' - Elon & friends) all over Twitter, Reddit and Tik Tok.
Paraphrasing Abraham Lincoln, "Every crypto project should be of the community, by the community and for the community."