Newsletter: Brands in Web3 & Web3 in Brands #11

Welcome to Edition #11 of “Brands in Web3 & Web3 in brands“, your regular dose of the latest news from the blockchain, crypto, and Web3 space, curated to provide unique marketing and brand strategy insights with a pinch of spice.

This week: ETF anticipation gets the markets fizzing; a possible FTX comeback looms; how a very rock n’ roll evolution is underway for DeFi.

The bulls are back in town, but what have we learned?

Well, what a difference a fortnight makes! The imminent likelihood of a spot ETF approval has sent crypto prices soaring by 25% over recent days, gains which appear to be holding for now. After a prolonged time spent in deep freeze, the crypto space is finally starting to fizz again. And it feels good – an industry starved of good news for months deserves to get a little giddy and enjoy the moment.

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However, if, as speculators are saying, this marks the start of a new phase, then this time, we have an opportunity to become better insulated against the harder times in the inevitable future cycles that will eventually follow. “Bear markets are times for building” is now a well-worn adage in crypto, but it refers to products. Bull markets are the time when we need to build brands. They represent an ideal chance to establish an audience of real, loyal users and supporters who will help to maintain your business during the down times.

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Based on the hard-won experience of three (yes, three!) successive crypto cycles, here are three lessons I’ve taken from working with Web3 projects of all shapes and sizes.

1. There will always be critics pointing out deficiencies or people demanding features and functionality not core to your business and your brand. Don’t play to the crowd! Find your USP – your “why” – and focus on those who choose you because of it. When it comes to branding, consistency is paramount, and the fact is that many Web3 companies could better seize this opportunity – a topic I discuss in depth in my latest op-ed on Cointelegraph. Have a read!

2. In an industry that’s still recovering from the fallout of FTX, LUNA, and the other 2022 disasters, the old marketing tactics are now transparently a poor effort. Engaging celebrities and sports clubs to hype up opportunities to get rich is no longer a differentiator. Real products and services with real users saying good things will make your project stand out to people and investors alike, creating a virtuous cycle.
3. Your brand is the Layer 1 of your entire marketing effort – without it, your marketing spend is simply draining revenue from your business. This time around, let’s focus on building brands that can deliver a meaningful return on investment.

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Post-SBF, the return of FTX?

All eyes are currently on the SBF trial, and most sources agree that there isn’t much debate about the likely outcome. However, the destiny of his erstwhile exchange is less certain. Bloomberg reported this week that there is now a real possibility FTX could make a resurgence. The company’s executives are reportedly in talks about the options available, which could include a reboot, or bringing on board a partner.

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It got me thinking – could Brand FTX really make a credible comeback, and what would be involved?

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It would involve some seriously weighty decisions. Starting with the obvious – the name. Would a change of name achieve anything, or would it be better simply to own the name and try to salvage a reputation?

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Reputationally, the choice of CEO will also speak to the direction of the company going forward. Given the intervention of establishment executive John J. Ray III in the firm’s collapse, a mainstream CEO with an established reputation for running successful companies seems the most likely choice for a future appointment.

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If so, we could also expect the firm to make concrete commitments to compliance and supporting sensible regulation. Effectively, it would involve a near-complete reversal from the previous brand, which was essentially “untamed innovator at the forefront of crypto finance.”

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But, if we are moving to a world where all exchanges are selling themselves on being the sensible grownups, the question is how can FTX differentiate and create a compelling selling point for institutions that have plenty of other choices?  

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From DeFi to DisFi – A rock n’ roll journey

Two stories have caught my eye over recent weeks that appear to indicate a rock n’ roll-type evolution in Brand DeFi is underway. Firstly, a new hook in Uniswap V4, published in an open-source directory, indicates that KYC checks for permissioned pools are on the cards for the next update. The nature of a hook means that it’s a customizable add-on feature rather than a part of the main Uniswap program, but nevertheless, the development has caught the ire of die-hard privacy advocates bemoaning a regulatory takeover.

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In what will be a further blow to DeFi’s OG fan base, French regulators have challenged the classification of DeFi protocols as decentralized, instead using the term “disintermediated” due to the high reliance on centralized infrastructure.

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What does this mean for Brand DeFi? The space evolved thanks to a hardcore base of users and developers, many of whom lived and breathed the decentralisation ethos. Now, are they left in the cold as DeFi’s future gets taken over by TradFi?

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This is a tale that has been told before, as many a rock fan can testify. A small, hardcore audience of early fans that help a band reach the heights of fame is left behind as the music labels inevitably influence creative output, leading to accusations of selling out. Metallica, Blondie, and Blink 182 all stood up to this kind of criticism, yet they all gained worldwide recognition while making millions in sales anyway.

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In Uniswap’s case, an institutional play means that it could be processing billions or even trillions of dollars of institutional liquidity in the coming years.

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Selling out, or just growing up?

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Advancing adoption

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A new twist on an old blockchain use case often augurs renewed interests, and this week, we have a case study from the “blockchain in trade finance” stable, thanks to Chainlink and Vodafone. The latter’s Digital Asset Broker (DAB) arm has announced a proof of concept for the exchange of global trade documents, which continues to be a pain point for the industry. Vodafone DAB has also joined Chainlink’s network as a node operator – another increasingly prevalent trend among enterprises seeking to expand their blockchain capabilities.  

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Euroclear, a Brussels-based settlement house, has settled a €100 million World Bank bond via its newly launched digital securities issuance platform. While the move to digital bond issuance isn’t the first of its kind, the large value – as well as the issuer – are both noteworthy. After all, there’s no better route to worldwide adoption than adoption by worldwide institutions.

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And speaking of worldwide adoption, Chainalysis’ latest stats show a downward trend that unfortunately coincides with broader market sentiments that were prevalent before this week. However, the good news is that adoption is highest in lower-middle-income countries such as India, Nigeria, and Ukraine – which represent around 40% of the total population.

Out and about in Web3

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My latest piece for Cointelegraph was published last week, zooming in on the issue of brand consistency in Web3 companies, which are outperforming Michelle Yeoh in their attempt to be everything to everyone, all at once. Check it out here:

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Read: “Why brand consistency matters and how Web3 companies are failing to deliver on Cointelegraph.

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I also added my two cents worth to this collaborative piece from Cointelegraph, which summarizes helpful tips and insights from founders to help Web3 companies survive precarious economic times:

Read: Expert advice to help Web3 companies survive precarious economic times