‘Magic Internet Money? The Banks Are Currently Doing That!’ Says LEND Finance

‘Magic Internet Money? The Banks Are Currently Doing That!’ Says LEND Finance

Saison Capital analyzes users at different stages of crypto adoption, looks at how people enter crypto, and shares valuable insights for crypto builders, in a column for CoinMarketCap.


Building in Web3 should be done with the journeys of the crypto-curious in mind. While crypto has entered the mainstream conversation, penetration is still low – 20M monthly active users on Ethereum, one of the most popular blockchains, compared to 5B internet users. Understanding how one goes from crypto curious to crypto conversion is not just for water cooler talk, but has important implications for crypto founders and builders to win the majority.

Last month, we wrote the first column for CoinMarketCap on the crypto landscape in Southeast Asia, detailing adoption rates, barriers to overcome for mainstream adoption, and more. As conversations around the findings unfolded, another question arose – “what causes individuals to fall down the crypto rabbit hole?”

The journey, as we outlined in the first article, begins with The No-Coiner – someone who is just becoming aware of crypto. As curiosity grows, perhaps just enough to start a crypto wallet, each individual eventually faces a crossroads – “Should I buy crypto?” If it’s positive, the next question follows – “Which crypto should I start with?”

Eager to find out the answers to this and its implications for builders, we launched a second round of surveys targeting 700+ individuals to understand 2 questions:

Who encouraged them to buy crypto in the first place? What was their first crypto purchase?

This was what we learned:

More than half of respondents make their first crypto purchase for smaller-cap coins Stablecoins are the least popular entry path – but that could soon change Media and news outlets remain king when it comes to building trust for the first crypto- purchase Family and friends also play an important role in bringing someone on board cryptoWhile job advocacy for crypto remains low, the crypto-native generation is already learning about crypto from workplace conversations. What was your first crypto purchase?

More than half of the respondents made their first crypto purchase for smaller cap coins

While the strict definition of altcoins is any crypto that is not Bitcoin, we separated Ethereum and stablecoins from the other altcoins to better understand consumer dynamics. From our survey, we learned that more than 1 in 2 individuals start their crypto journey with these smaller-cap cryptocurrencies. Through follow-up conversations with some of these individuals, we learned that buying motives are twofold – speculative investments, and a means to an end.

In terms of speculative investments, the perception is that smaller-cap cryptocurrencies have greater volatility, thus potentially higher upside than large-cap cryptocurrencies such as Bitcoin and Ethereum. Some even call Bitcoin in general “the crypto for boomers.”

Additionally, smaller capital cryptocurrencies have been purchased as a means to an end – whether it’s purchasing a non-fungible token (NFT) or playing a game.

“I bought AXS as my first crypto because I heard from some friends that they were playing Axie Infinity, and one of the requirements to play the game was to have some AXS tokens to pay for in- game activities like breeding” – College Student

Stablecoins are the least popular path to entry – but that could soon change

Notably, stablecoins are the least popular path to entry. The most commonly heard reason was the lack of utility. Stablecoins are mostly used as a temporary store of value for active cryptocurrency traders, rather than as a medium for transactions related to products and services. “I use stable coins like USDC as a safe haven when I think prices are going to drop. Once they drop, I use the USDC to buy back crypto,” says an architect who is an active user of various Decentralized Finance (DeFi) protocols are.

Still, this is a trend that could quickly reverse as the use of stablecoins for transactions gradually increases. Most recently, the Monetary Authority of Singapore announced support for a purpose-built digital Singapore dollar, outlining use cases such as government disbursements and skills development requirements. Driven from a credible source with a top-down approach (ie citizens must use digital SGD or they won’t be able to claim the benefits), it wouldn’t be surprising to see stablecoins become the de facto access path to crypto in the near future is not. future.

Who encouraged you to make your first crypto purchase?

After understanding what people bought as their first cryptocurrency, we were then curious about who led them down the rabbit hole.


Media and news outlets remain king when it comes to building trust for the first crypto purchase

We learned that media and news sales continue to reign supreme in building trust for one’s first crypto purchase, with 27% of the surveyed population attributing their first crypto purchase. As sources of authority and credibility for a large part of the population, media and news publications play an important role in weeding out misinformation and providing a more objective voice in a noisy environment. As such, reading, listening and viewing content from media publications becomes a key driver in influencing crypto interest, and ultimately conversion. “I first bought Bitcoin when I heard about it on the news. After diving deeper, I understood more about what the blockchain is and how a distributed ledger prevents corruption of financial records,” says a high school teacher.

Family and friends also play an important role in bringing someone on board crypto

While the media remains influential, family and friends play a critical role in reinforcing the narratives and guiding an individual into crypto. With 25% of respondents attributing their first crypto purchase to the influence of family and 21% to their friends, the importance of advocacy among existing crypto users is underlined. This is best characterized by a pilot who shared: “I was a skeptic for many years, even though I had friends around me who bought crypto at the time. I always thought it was just one big scam. In November However, in 2021 I decided to reach out to a friend who teaches introductory crypto classes.One year later, I’m deep down the rabbit hole and learning more and more about what web3 has to offer, allowing me to broaden my horizons in both broaden technology as well as finance.”

This is echoed by another individual currently working as a data privacy leader, “I jumped into the crypto space in 2013 after hearing about it from a good friend at school. I was intrigued by the concept of mining for Bitcoin and has never stopped since.”

While job advocacy for crypto remains low, the crypto-native generation is already learning about crypto from workplace conversations

Notably, workplace conversations are the least influential in the crypto conversion journey based on our survey. However, a divide is starting to emerge between the crypto-native generation (those born from 2000 onwards and recently entered the workforce), compared to crypto-immigrants (those born before 2000).

9% of crypto immigrants attribute their first crypto purchase to workplace interactions, compared to 17% of crypto natives. This could possibly indicate a growing interest in crypto among colleagues, or even the discussion of crypto entering the “work” fold, as an increasing number of companies consider the implications of web3, crypto and other distributed ledger technologies. A software engineer who falls into the crypto-native category said:

“I got into crypto when it was still viable to mine Ethereum, over an off-topic discussion in my software engineering team. My colleagues and I wanted to evaluate the feasibility of setting up mining rigs with available hardware and software.” Implications for builders – Authority, social proof, scarcity

These findings have important implications for crypto founders and builders looking to include more non-crypto owners in the group, and can be summarized in 3 principles:

1. Authority – Ask any web3 founder how they think about distribution and “social media” will likely be the top-of-mind answer. But as our survey showed, while social media has a role to play (often in shaping public perception), the jump from “crypto curious” to “crypto convert” often relies on authoritative, trusted sources such as the media and news outlets. Founders should not neglect the importance of building authority and credibility of themselves and their companies, including the media and news. Research has shown that establishing credibility and authority before attempting to influence led to greater effectiveness – in a medical setting, patients’ adherence to advice from their doctors and therapists increased by 34% when the professionals showed their grades, posted awards and certifications on the wall. .

2. Social Proof – In all clichés lies a grain of truth, including the “monkey see, monkey do” cliche. The role that family, relatives and friends play in influencing individuals to buy crypto is undisputed – combined they make up almost half of the surveyed population. Founders can think of ways to engineer “safety in numbers” — a concept proven since the 1980s when researchers solicited more door-to-door donations after showing residents a list of other neighborhood residents who already gifted What is key is finding the right set of ‘influencers’ that the individual trusts and has an existing association with.

3. Scarcity – “Whatever is rare, uncommon, or decreasing in availability confers value on objects, or even relationships,” says Robert Cialdini, the father of modern persuasion research. While the concept is not foreign to the crypto scene (exclusive airdrops, low-supply NFT collections, and limited-time challenges), scarcity should be a combination of rare and valuable. Although rarity can be developed through a multitude of techniques, the value must first be established or it will not be desirable. A pencil that I have on my desk may be the only one of its kind in the world, but if its value is not understood and recognized, it remains priceless

To conclude, the path consumers take to adopt crypto holds interesting insights into their motivations and behaviors (eg smaller capital cryptocurrencies for speculation or as a means to an end), as well as sources of influence. Through an understanding of this, founders can establish thoughtful authority, design social proof, and induce scarcity as they bring crypto to the majority.

This is a guest post from CoinMarketCap by Qin En Looi, Principal at Saison Capital, and has been edited for style. The original article was published here.

What is Saison Capital

Saison Capital (saisoncapital.com) is an early stage venture capital fund (pre-seeded to Series B) with a focus on emerging markets. We support ambitious founders solving big problems in Web3, fintech and embedded finance. Every individual on our team comes from an industry background, and we’re not afraid to roll up our sleeves to support our founders. We are backed by Credit Saison, a Tokyo-listed $30B AUM consumer finance company with extensive financial services across Asia.

Where to find Saison Capital:

Website | Twitter | LinkedIn |

What is CoinMarketCap:

CoinMarketCap is the world’s most referenced price tracking website for digital assets in the rapidly growing cryptocurrency space. Its mission is to make crypto discoverable and efficient worldwide by empowering retail users with unbiased, high-quality and accurate information to make their own informed conclusions.

Where to find CoinMarketCap:

Website | Twitter | Telegram | LinkedIn |

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