DeFi's next 100m users
DeFi will be reborn through demographics that have been failed by the traditional financial system and who are now ready to take control of their own destiny.
The owned-web evolution is coming, and it will be led by a new generation of users who are just starting to enter their prime spending years. This demographic, generally classified as 18-30, has never known a world without the internet. They are incredibly comfortable with technology and are more likely to invest in cryptocurrencies than any other age group.
This generation has been utterly rejected and betrayed by existing financial infrastructure and is looking for alternatives. They were told that if they just got a good education and worked hard, they would be able to buy a house and have a comfortable life. But the reality is that they can't even afford to rent, let alone buy a property. And with the COVID-19 pandemic causing economic uncertainty around the world, this demographic is only going to become more interested in web-based technologies that offer them a way to take control of their financial future.
These are users facing the cold nihilism of a world that has repeatedly placed their needs behind the needs of older generations who have a head start and a safety net. They are a generation who have been failed by their elders and the banks and tradfi that enabled a wealth far beyond their means, now facing rising inflation, high-interest rates, and the prospect of a new depression.
They are struggling financially and can't afford traditional investment options, but they are still young and optimistic enough to believe that web technologies will eventually upend the status quo and idealistic enough to believe in the power of crypto to create a more fair and just world.
A generation in crisis is no less a generation searching for hope, capital, and financial growth; the owned web offers all these things. The next 100 million users of web three will be those who were left behind by the previous system and are now ready to participate in an alternative.
My thesis is that these users will opt to spend a percentage of their take-home income on crypto through roundup apps like Acorns and through the purchase of a few hundred bucks worth of Bitcoin or ETH every pay day through Apple Pay via mobile-first onramps such as Rainbow or a CEX.
What crypto needs now is an influx of new users, and this demographic is the most likely to provide it. They are a generation that is used to getting what they want through technology, and they are not waiting for permission from banks or governments to take control of their financial future.
The owned web is ready for them, and they are prepared for the owned web.
What is needed now is for projects to start thinking about how they can appeal to this demographic and make their products more accessible.
Product creation for this demographic will need to be user-friendly, simplified beyond the complex tokenomics that have appealed to the crypto faithful, and designed to be mobile-first and mobile-only. It will need to consider the lower spending power of this userbase, appeal to their inclination to purchase commodities in lower volumes and fractional units, and offer a path to accumulation through staking, airdrops, and yield-bearing products.
What is also needed is a way to reach these users where they are already spending their time and money: social media platforms like TikTok, Reddit, and Twitter are popular but disreputable and riddled with scams and misinformation, and existing media cannot communicate to a younger demographic.
There needs to be a way to reach these users with accurate information about Web3 products and services and to do so responsibly and not likely to be dismissed out of hand.
If we can successfully bring these users into the fold, we have the opportunity to both rewrite existing financial systems and provide opportunities for growth, economic freedom, and security to people who have been otherwise abandoned, who have the most to gain, and the least to lose. It's an opportunity to change the world by changing the destiny of a generation.