Consumer Applications: The Next Frontier of the Crypto Market

In recent years, the focus of the encryption industry has shifted from technological infrastructure to user-oriented applications. As core technologies mature, the market has begun to pay attention to how to deliver blockchain value to ordinary users. This trend marks the industry's entry into a new phase, with consumer applications becoming the focal point.

Market Background

The current crypto market exhibits the following characteristics:

• The total market value of stablecoins has slowed down, only about 25% higher than the peak in 2021.
• The new funds mainly come from institutional allocations of BTC/ETH, rather than speculative capital.
• Lacking the retail frenzy and NFT craze of 2021
• Overall liquidity growth stagnation

Core Viewpoints

1. In the next 5 years, the crypto market will see a second wave of growth dominated by Web2 users.

   • The improvement of the policy environment is beneficial for the development of consumer applications.
   • Web2 users are more focused on directly usable applications rather than underlying technology.

2. The market focus shifts from technology to real users and revenue.

   • Projects with actual income and product-market fit are more favored.
   • User experience has become a key competitive factor.

3. Consumer applications will expand the overall market size.

   • Easy to achieve virus propagation and attention economy
   • Can attract new retail users to enter the market

Vertical Tracks That Have Reached PMF

• Trading: Hyperliquid, Axiom, etc.
• Issuing platforms: Pump.fun, BelieveApp, etc.
• Information platforms and prediction markets: Polymarket, Kaito, etc.

These projects generally have higher revenue and user scale, performing better than pure technology projects.

The track that is expected to achieve PMF through encryption technology upgrades

1. One-stop deposit and withdrawal + DeFi front end

   • Address current pain points such as deposits, withdrawals, and fees.
   • Provide aggregated DeFi services

2. Entertainment/Media/Social Platforms

   • Introduce new revenue models such as DEX fee sharing, creator tokens, etc.
   • Optimize user experience, remove ads
   • Improve creator revenue model

Investment Framework

• Focus on consumer applications and their infrastructure on a few "super chains".
• Evaluate the project's distribution capabilities and user reach capabilities
• Focus on brand and user experience, rather than just on technological innovation.
• Evaluate the project from a business perspective rather than a purely technical one.

Consumer applications will become an important growth engine in the crypto market. Investors need to adjust their mindset and focus on projects that can create value for ordinary users.