You focused on getting to Mainnet: Now what?
Does this sound familiar? You are caught up in the frenzy of launching mainnet. Your team spends hundreds (probably thousands) of hours working through all of the finer technical details. It’s a herculean task. It’s impossible. But you’ll make it happen.
Then, as you near launch, it dawns on you: maybe you forgot one critical ingredient.
Once you’ve launched, has anyone figured out how to attract, engage and retain customers?
Will all of that technical feat-of-strength be worth it?
Caught up in a frenzy to launch their mainnet, teams are missing out on a golden opportunity to actually understand their customers.
Testnet vs Mainnet
Launching an independent blockchain generally requires a startup to design and build a protocol that supports a network, desired functionality, and transfer of a native digital currency. Because this process takes significant time and resources, project teams have broken up the development process into two phases:
Testnet:
In order to test and demonstrate the capabilities of a blockchain project to investors and users in a safe environment, it has become a common practice for project teams to run a prototype on a “testnet” first. As the name suggests, a testnet is a sandbox environment for developers to experiment and test-run the functionality of a project claimed in the white paper before it opens for wide-scale use.
Mainnet:
Once the team is satisfied with the technical performance of testnet, all the changes are incorporated and the mainnet is rolled out on the main blockchain network. At this point, transactions are stored on the actual blockchain, coins have real value, and exchanges and wallets can start the process of token swaps. In other words, it’s the real deal.
Rushing to mainnet? Think again.
At the height of the crypto bubble, mainnet launches represented a significant price catalyst and a great bullish sign for crypto projects. In the past year, however, the sad reality is that most projects implementing mainnets have seen negative returns and lackluster performance.
According to recent data from our friends at
, projects like , , and have lost over 70% in the last 3 months, Cosmos, , and lost over 60%, and Coin and Token fell over 40%.
A core reason for this lackluster performance is that projects focus far more on technical delivery than on understanding their customers during both the testnet phase (pre-launch analysis of user and developer activity) and the mainnet phase (continued tracking and adjustment).
By ignoring fundamental metrics focused on customer behaviors, blockchain organizations are practically set up to fail.
Three things you can measure to ensure mainnet success:
1. Stakeholder Activity (hint: your customers are key) — This is the metric you should live or die by. Success is impossible without understanding the activities of each stakeholder: speculator, holder, customer, miner, voter, and anyone engaged as a network participant.
By ingesting all activity within a specific blockchain, parsing contracts, and labeling wallet addresses and corresponding transactions according to user types, you can measure the magnitude of users engaged in the intended use-case during pre-mainnet testing and identify both the functional components and points of friction within the network.
2. Developer Traction — Understanding the collaborative activity of your protocol’s development is a proxy for understanding your ability to deliver product. Over-indexing on commits but under-indexing on bug fixes will deliver poor results. A balanced ecosystem of delivery will be reflected in a healthy outcome.
Ingesting and evaluating data (code changes, code improvements, community involvement) from code repositories like GitHub, Bitbucket, and Gitlab can provide a comprehensive picture as to the scope of development taking place on a specific blockchain.
3. Money Flows — The health of a protocol is often dictated by asset flows through the network. The pace at which assets move, who holds them and what they do with them will inform strategic decisions. For example, if Miners are hoarding their rewards they may cause liquidity droughts, impacting speculative activity. Or maybe cold assets from a large fund are moved to warm wallets, indicating a large potential sale. Understanding where your money is going will help deliver strategic outcomes.
Teams need not wait for mainnet to begin their analytics journey. Tracking these and other key performance indicators during the low-risk testnet phase gives teams the opportunity to iteratively improve on their product, understand their customers, and port that understanding into successful mainnet launches.
To learn more about how Flipside enables blockchain organizations to grow, visit https://flipsidecrypto.com/crypto-projects and access your free analytics dashboard today.
