On The Other Side ep 92 - Building for crypto-natives vs. normies w/ Mike Demarais
Primer: Should crypto companies build products for crypto natives or normies? In this episode of On The Other Side, Mike Demarais of Rainbow argues for both! He discusses Rainbow’s embedded wallet solution, his views on the market, and other various topics.
Rainbow
An Ethereum wallet for your phone and computer
Their goal is to bring what makes crypto fun to the front and center of the user experience
Layer 2s are supported
Build Products For Crypto Natives Or Normies?
From the beginning of Rainbow, they have this core insight that has driven a lot of their product thinking
The insight is that everyone who comes to crypto has a friend in their life who knows more about crypto than they do
Internally, they call that person a shepherd
All noobs have a shepherd
It’s important that a product has to appeal to both audiences because the nerds are the ones who recommend products to the noobs
At this point in the market cycle, they are focused on the crypto native user base since they are the cohort of users that are here to stay
The Rainbow extension product was built for desktop
Why Do Crypto Natives Prefer Using Desktop?
Historically, DApps have been poorly made on mobile
The user persona of a crypto native tends to be someone on the spectrum of tech. These individuals are likely to be at their computers all-day
Building More Functionality Into Rainbow
Internally, they track this metric called Rainbow Power Transactions (RPTs)
RPTs are transactions that users do from start to finish within Rainbow, instead of going to the app itself
Certain power user activities are best done on a desktop (e.g. people flipping NFTs on Blur by having multiple tabs opened)
Most Compelling About Consumer Social
Friend.tech is quite novel
Has spent a lot of time thinking about Farcaster and Lens
His thoughts have been driven by Elon rugging all of the Twitter APIs and that Farcaster and Lens could offer a similar experience or similar types of data
From Rainbow’s perspective, the low-hanging fruit is to integrate social stuff into their product (e.g. fetching a user’s social graph and overlaying it on top of the data)
What Are People Currently Doing In This Market?
People are still doing plenty of core actions such as swapping
In the last few months, people have been trading meme coins
It became increasingly important to bridge assets between networks
At Rainbow, they are working hard on making bridging more intuitive for people
On-chain, people are investing a lot in open-edition mints
Currently, they are building the ability to create NFTs on Zora in the Rainbow mobile app
Spectrum Of Wallets: WeChat Style To Embedded Wallets
Embedded wallets are important to get the majority of new people onboarded into crypto
They have a plan to have their own embedded wallet offering
It’s going to be built into the RainbowKit — a widget that devs could add to their website or DApp to easily support a wallet connection
They have gotten huge adoption for the RainbowKit. Half of the flagship DApps are using the kit
There are 2 factors for their embedded wallet solution:
They are offering it for free as opposed to the metered pricing that exists in the market today
Their offering is going to be interoperable
Their approach does not prevent any DApp from making a smart contract wallet
The core difference is that instead of having to authenticate and create separate keys for each DApp, there is going to be only one login
How Do They Maintain Their Newbie-Oriented Approach?
He has 2 younger brothers:
One is an artist who does not care about crypto
The other loves crypto but is a self-admitted normie
He gets a lot of value by bouncing some of his ideas with his brothers
Was hanging out with 0xDesigner recently. Received a lot of value from him when his assumptions were challenged
Do People Care If Things Are On-Chain?
The mainstream will come back when there is some innovation that they cannot predict right now
There are a few things that are trending in the right direction that is going to be drivers of future adoption:
Friend.tech is novel and interesting
The experiments that Zora is doing with protocol rewards
“Both of those products [Friend.tech and Zora] essentially have created an experience where the user makes money by default.”
- Mike Demarais
The new version of PoolTogether that is coming out soon is trending in the same direction
More apps will be built on top of Lens and Farcaster purely because of the unfettered API access they get as opposed to Twitter
His Worldview On Crypto
His prediction for the adoption path of crypto falls into 4 steps:
The first step is single player making money through speculation
Step two concerns multiplayer making money activities (e.g. through Zora or Friend.tech)
Step 3 involves crypto being used for commerce and IRL payments
The last step happens when crypto replaces a lot of other financial products in people’s lives
Currently, we are in the multiplayer experience phase
Assumption That Payments Will Be The Primary Use Case
Over the last few years, it became clear that building exciting experiences on-chain might be the primary step that’s required to onboard people to crypto
Bullish on global brands that are experimenting in Web3
At Rainbow, they try to frame onboarding to crypto as something to play around instead of as an investment
Allowing people to make mistakes and learn from them is important
Robinhood is how a lot of people learned how the stock market works
What’s His Favourite Current Meme/Buzzword?
Everyone using the word consumer crypto
Think that they use it to refer to Friend.tech
SocialFi is a funny narrative
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