What mom hasn’t told you about building in consumer crypto

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Over the past two to three years, many have equated growth with Product-Market Fit (PMF). Yet in the consumer crypto space, this equation often breaks down: the growth you observe may merely be amplified by speculation, word-of-mouth hype, or cyclical tailwinds. What truly determines survival is retention and genuine usage motivation—along with your ability to generate stable, repeatable signals in a fragmented market where attention is constantly siphoned by tokens and zombie projects.
I. Why Do Signals Distort?

1) Revenue Can Be a “False Positive”

After launching its Pro subscription, Farcaster generated over $1 million in revenue within 24 hours. This sounds like PMF, but closer inspection reveals: nearly half of purchasers had fewer than 100 followers—inconsistent with the “heavy user targeting” claim. One reason is speculative motivation—early buyers received approximately $600 in airdrops the next day, a 5x return within 24 hours. The result: money came in, but validation didn’t necessarily follow. In crypto environments, such external incentives can make dashboards appear vibrant while contributing little to the product’s intrinsic value.

2) Willingness to Pay Doesn’t Equal Genuine Demand

Kiwi initially required a $10 NFT pass purchase, naturally acquiring paying users—including celebrities—through organic growth. Yet post-mortems revealed many paid out of peer support, value alignment, or indifference to spending “cyber money.” In other words, payment doesn’t guarantee retention, much less core value alignment.

3) Cyclical advantages are double-edged swords

Launching an NFT exchange in 2020 might have carried you on the wave; repeating the same path in 2025 faces a radically different landscape. When your growth curve rides external hype (rather than intrinsic product value), the steeper the ascent, the sharper the potential fall.

4) Attention hijacking

The crypto world is rife with zombie projects where founders abandon communities, yet users cling to Discord channels and token narratives, reluctant to shift focus. Compounded by token price fluctuations’ pull on human nature: during Base chain’s meme coin frenzy in 2024, usage of knowledge/tool-based products plummeted—given 15 minutes, would you read a decentralization deep dive or hunt for the next 100x? Most choose the latter.
II. Why Is Consumer-Grade Crypto Itself More Challenging?

1) Small Market, Low Penetration

Ethereum (mainnet + L2) has roughly 40-50 million monthly active addresses. Even assuming one address per person (which clearly isn’t the case), global penetration remains under 1%. A small sample size means noise dominates over signal.

2) Complex User Base with Mutually Exclusive Preferences

Developers, speculators, artists, researchers, and TradFi professionals are scattered across different L1/L2 solutions, creating inherent feedback conflicts: some demand technical depth, others seek artistic aesthetics, while some just want light entertainment. The more you try to please everyone, the easier it is to lose focus.

3) Early adopters crave novelty

Their willingness to endure poor UX for fresh experiences is a boon; their tendency to abandon it for the next shiny object is the cost. High trial rates don’t equate to high retention.
III. The correct understanding of PMF: Growth × Retention

PMF isn’t just about growth—it’s about retention. If users enter and leave immediately, or never return, rapid growth means burning through your market faster. Download and revenue numbers can be misleading; repeat visits, daily/weekly/monthly retention rates, and active user composition are the true watermarks.

Twitch achieved 16 million downloads in its first four months, yet its founder still declared no PMF—the reason being abysmal retention.
IV. Actionable Strategy: From “Noise Reduction” to “Focus”

Points systems, referral bonuses, tradable tickets, predictable airdrops… all these can mislead. During the early signal-finding phase, avoid implementing them. Kiwi once saw a surge in registrations due to “an influencer claiming an airdrop,” but few became long-term users, leading to its eventual shutdown.

Use karma/rankings/public acknowledgments to incentivize quality content and sustained contributions. Employ clear content guidelines and minimal governance rules to filter out low-quality posts and freeloaders. When necessary, audit on-chain history to distinguish rule-unaware newcomers from malicious actors.

Telegram/Discord group chats yield more spontaneous feedback than emails. Collect issues through a three-tier structure: creators/commenters/silent observers, then tailor feature improvements:

Content shortage → Develop one-click submission tools;

Low engagement → Enhance comment editor/reply preview/emojis;

High reading barriers → Optimize loading, information density, and sorting.

Larry Page’s concept of “toothbrush products”—used 1–2 times daily to solve a clear, minor pain point. Concentrate resources on this single action: Daily usage → Daily feedback → Daily iteration. Eliminate flashy pages and long-tail features that don’t impact core value.

Deliver instant perceived value: comment previews, key takeaways, charts/memes. Retain deep reads but optimize entry points and reward curves. Immediate gratification + long-term value aren’t mutually exclusive.

Instead of persuading your mom to use a DeFi aggregator, start with seasoned traders making 5 daily transactions. High match → high retention. Offline ETH conferences, hackathons, niche podcasts, ENS/Gitcoin communities—these dense audiences are expensive to acquire but offer pure signals.

Aave once generated tens of millions in fees with just 25k monthly active users;