The rise of consumer crypto is reshaping the blockchain landscape, making decentralized applications (dApps) increasingly relevant for everyday activities. But are dApps the future for consumers? This article explores the key aspects of consumer crypto, its potential, and the obstacles it must overcome to become part of  web3 users' everyday lives.

Consumer Crypto aims to make blockchain technology more accessible to everyday consumers.

What is Consumer Crypto?

Consumer crypto refers to blockchain-powered applications designed for daily, personal use. Unlike traditional DeFi apps focusing on finance, consumer crypto touches social media, gaming, and retail experience. It offers a unique mix—blurring the lines between users and owners by merging work, play, and social interaction.

Examples of consumer crypto apps:

• Farcaster: A decentralized social platform.

• Fantasy Top: A blockchain-based fantasy sports platform.

• Friend Tech: A social finance platform integrating blockchain into social interactions.

• Polymarket: A blockchain-powered prediction market

• Kiki World & Blackbird XYZ: Platforms enhancing social connections by blending digital and real-world experiences

These apps offer unique experiences, transforming how we engage with products and services by making things like social networking and gaming more interactive and rewarding.

3 Phases of Consumer Crypto Adoption

Adoption of consumer crypto can be broken down into three phases:

The chart of Consumer crypto adoption phases

Discretionary Spending (First 50 Million Users)

Initial adoption focuses on leisure activities like gaming and social platforms. Blockchain technology here addresses Web2 issues such as high fees, geo-restrictions, chargebacks, and censorship. Key categories include:

• Gaming

• Social creator platforms

• Digital collectibles

Leading apps: OpenSea, Polymarket, Uniswap, Friendtech, Axie, etc.

Necessary Spending (Up to 250 Million Users)

Crypto begins to integrate with essential aspects of life, such as payments, SaaS, and DeFi. It moves beyond leisure into areas of daily necessity.

Essential Spending (Mass Adoption)

The final phase sees everyday necessities being conducted onchain, including banking, insurance, and identity management.

Challenges to Consumer Crypto Adoption

Despite its potential, consumer crypto faces several challenges:

• User Experience: Many Web3 apps are complex and lack the intuitive design of Web2 apps. Improving UX with chain abstraction and defragmentation can simplify interactions.

• Real-World Assets (RWAs): Tokenizing RWAs like real estate enhances liquidity and transparency, making high-cost assets more accessible.

• Regulation: Uncertainty around crypto regulations creates trust issues among consumers.

Key Lessons for Consumer Crypto Builders

For those building in this space, here are some important insights:

Focus on long-term vision: 

Success takes time. Polymarket has faced skepticism multiple times, but founder @shayne_coplan and his team remained steadfast in their belief that prediction markets could enhance truth. In 2024, Polymarket achieved over $423M in volume and significantly impacted the U.S. Presidential election. Their conviction and persistence have truly paid off.

2024 Presidential Election Predictions - Polymarket

Balance purist and tourist audiences: 

Cater to both crypto purists and casual users. Striking this balance is critical for widespread adoption.  In 2012, @brian_armstrong made the early design decision to provide a hosted wallet app to users, believing that non-custodial wallets would not lead to mass market growth. Coinbase is now a $50B+ public company, thanks to that decision.

Coinbase now is a successfully hosted wallet

Understand your market deeply

Dive deep into user needs and market culture. When Opensea launched in 2018, it faced competitors with more funding and high-profile investors. However, @dfinzer and @xanderatallah succeeded by prioritizing product value over superficial prestige. Their approach—engaging directly with NFT creators and attending every relevant event—helped them grasp the culture better than their rivals.

The key growth of OpenSea is the deep understanding of the market

Build your own tribe

Create a unique community rather than appeasing existing ones. dYdX has set a precedent in this area. @AntonioMJuliano and his team began within the Ethereum ecosystem, progressed to a Starkex-powered L2, and eventually launched the dYdX chain using the Cosmos SDK. This innovative approach may become more prevalent in the future.

dYdX is one of the biggest decentralized exchanges in the world

About Formo

Formo revolutionizes consumer crypto with Web3 Forms and Analytics. By harnessing onchain data for actionable insights and simplifying wallet and social verification, Formo makes managing and analyzing user onchain data both easy and secure. Ideal for dApps, games, and more, Formo is your gateway to effective digital engagement.

The Future of Consumer Crypto

As blockchain technology continues to evolve, dApps will likely become integral to all aspects of life—from entertainment to essential services like banking and insurance. While mass adoption will take time and face challenges, the potential for dApps to transform how we live, work, and play is immense.

Consumer crypto is at the forefront of this change, and with innovations in user experience, regulation, and tokenization, we could very well be witnessing the beginning of a new digital era.’

Sign up for Formo now to turbocharge your Web3 growth!