Daily Crypto Thought #6: Vanity Metrics vs. Real Metrics
Non-crypto startups are trained to focus on real metrics rather than vanity ones. Crypto startups shouldn’t be any different.
Vanity metrics in crypto
- Number of Telegram group members
- Number of crypto-famous advisors on your website
- Number of partnerships you sign with larger companies
- Number of Github stars
- Number of commits in your Github repo
- Number of people who attended your meetups
- Amount you raised in your ICO
- Your project’s market capitalization
- … and even number of transactions on your blockchain (unless you account for spam and washing)
Real metrics in crypto
- If you’re a protocol, the amount of money your dApp developers are making or saving.
- If you’re a dApp, the amount of money that you are making or saving.
In my rudimentary and simple view of the world, money === value.
Unless you are laser-focused on making money or enabling your users to make money, you’re not generating value.
You might argue that we’re still in the infrastructure phase, that scalability prevents many use cases from being realized, and that the lack of dApp user interfaces prevent real monetization.
I think those are cop-outs. There are plenty of users out there:
- 2% of the US population own Bitcoin (5 million people).
- 18% of college students own crypto (2.9 million early adopters).
- In February, Metamask passed 1 million installs and probably has over 2 million today.
- In January, Ledger passed 1 million hardware wallets sold.
The total addressable dApp user base is probably 5 million people globally and growing quickly. While that’s a small fraction of the overall population, it’s still enough to build real dApp businesses.
Example of real dApp businesses
Here are some companies building dApps that are making decent money:
- IDEX: Ethereum-based decentralized exchange that specializes in hosting markets for smaller tokens. With $2.7m in daily volume and 0.1% maker / 0.2% taker fees, they are making an estimated $8,100 in revenues per day, a $3m annual run rate.
- Gods Unchained: Ethereum-based card trading game. They have averaged approximately 50 ETH per day in volume. Under the assumption that the volume consists entirely of primary card pack sales since the game hasn’t yet been launched, the team is making $14k per day, a $5m annual run rate.
Obviously, the revenue run rate of these dApps pale in comparison to their centralized cousins, whether it’s Binance or Hearthstone. But the fact that they seem to be operating sustainable decentralized businesses is something that we should all applaud and strive for.
Disclosure: I don’t own any AURA (IDEX) tokens, and I own 500+ Gods Unchained cards.
