Engagement rates across stablecoins, what can we learn ?
For crypto protocols, social media marketing has been an important leverage to introduce them to the masses. Growth is handled through different means such as paid partnerships with influencers, angels sharing the project they invest in with their communities, Twitter paid ads, Google Ads, PPC, etc.
While acquisition is not significative of the protocol’s success, a high engagement rate is. To avoid any external influence over this metric, the retweets made by the protocols we analysed were excluded from this research.
With Stable Unit being a DAO focused on building a decentralized stablecoin, my focus for this benchmark was decentralized stablecoins. Consequently, USDT, USDC, BUSD, TUSD, USDP, XAUT, EURT, FLEXUSD (since it is essentially wrapped USDC), GUSD and HUSD were excluded.
6 decentralized stablecoins were selected based on market cap whereas UXD was selected because it is the most popular decentralized stablecoin on Solana. This resulted in the following list :
- DAI
- FRAX
- USDN
- USDD
- FEI
- MIM
- UXD
2536 Tweets were collected and engagement rate was calculated for each tweet using the following formula
Engagement rate = (Likes + Retweets + Replies) / Followers_count
We can already point out USDN’s strong popularity from early 2020 to the beginning 2021. The algorithmic craze was at its beginnings as Frax shortly picked up the pace in Q1 2021, followed by UXD in early 2022 and USDN in the second quarter of the year. We can also assume that UST’s engagement rate was also high because of its popularity.
Algorithmic stablecoins have always had the highest engagement rates which is quite surprising as these stablecoins are either undercollateralized or barely collateralized yet they are the ones engaging their social media users the most.
Nonetheless, overcollateralized stablecoins such as MIM or FEI are still showing respectable results. In fact, MIM is the third stablecoin by twitter engagement rate in our list for the year 2022.
Over the years, stablecoins have appeared in many shapes and forms, some are over-collateralized, others are algorithmic but overall many bloomed during the bull run where market conditions were easy. Yet, to be able to define a marketing strategy out of their their social media engagement, we may have to zoom in even further and look into the second quarter of 2022 where the morale on social media has started to weaken.
In the second quarter of 2022, the most popular stablecoins by their average engagement rate were USDD (0.70%) , USDN (0.24%) and UXD (0.20%) .
USDD’s highest engagement rate tweets were giveaway posts and the launch announcement of the stablecoin. While giveaways are mostly used for growth, they also increase engagement rates as they ask for participation in various tasks to enter.
We can also note the use of gleam.io (a giveaway tool) to push participants to do multiple tasks for additional entries. Usually giveaways for crypto projects only focus on following and retweeting the contest post. USDD’s approach seem to yield better results.
It may seem that there is a thin line between acquisition and engagement because it is the case. Having a high engagement rate will lead to acquisition because of a network effect.
When it comes to our second contender, there is another algorithmic stablecoin, USD Neutrino ($USDN). Contrary to USDD’s marketing, USDN’s marketing is mostly focused about their product. Indeed, their most engaging tweet of 2022 is a tweet announcing #NeutrinoComingHome, a liquidity mining campaign which aims to bring back $USDN to Waves. While their top tweet by engagement can be considered as a “giveaway”, it is done through their product. Aside from that tweet, most of their top 10 tweets by engagement rates were linked to their product (Protocol Update, Swap limits, Governance, etc.)
Lastly, we have UXD which ends up being a serious contender when it comes to engagement rates. Their top tweet by engagement is the first tweet of a thread explaining how UXD fixes the stablecoin trilemma. The two next tweets by engagement rates are tweets mentioning a financial incentive (Airdrop & NFT giveaway).
By looking into UXD we can see that it is not surprising that their top tweet by engagement rate is about their product. When looking at the word cloud representing the topics they mostly tweet about, we can see that they mostly tweeted about their product.
Simply out of this word cloud, we can already understand that UXD Protocol defines UXD, as a decentralized algorithmic stablecoin backed by a delta neutral position, on Solana. Tweeting about the product is important and it has to be done using simple words. The objective is to simplify a complicated notion for the general public. This is what marketing is also about.
Aside from giveaways, what should we look into ? For USDD, their most engaging tweets are pre-launch announcements and giveaways, therefore, there isn’t much else to look into. Both UXD and USDN mostly engaged their community with tweets about their protocol and products yet one differentiator would be the use of humor on UXD’s page which is a form of content that is relatively cheaper to produce than articles or threads yet it does seem to be highly engaging. In short, the takeaways for the marketing strategy are the following :
- Do giveaways and use giveaway management tool such as Gleam.io for more engagement.
- Tweet about your product, vision, what has been built, the roadmap and be clear about your product.
- Humor does work and judging by the engagement rate, the stablecoin community is no different.
If you wonder why engagement rate is important ? The following chart explains it clearly.
A high engagement rate gives the project more reach as existing followers act as ambassadors, which, ultimately, positively affects its market cap.
