Which is the most successful crypto financial product in the world in the past 5 years?
The most popular answer is neither the on-chain financial innovations such as Uniswap that ignited the DeFi Summer, nor the digital artworks such as CryptoPunks that set off the NFT craze, but rather the stablecoins that everyone has long been accustomed to.
That’s right, in addition to financial games with big-name attributes such as DeFi and NFT, stablecoins for ordinary users have become the most widely used use case of crypto finance. The number of on-chain accounts of the TRC20 version alone exceeds 40 million, truly making blockchain and crypto economy no longer a carnival for a few people, and greatly broadening and deepening the user base of the crypto economy.
At the same time, this also reflects the strong demand of the general public for "Web3 consumer products". Web3 should not be a game for big players. Seeing this, Morph resolutely abandoned the minority strategy centered on crypto OGs and on-chain whales, and clearly positioned itself as "consumer-grade L2", choosing to build it "consumer-centric" and for ordinary users and developers of the "majority":
Imagine if Morph, through consumer applications such as payment, games, SocialFi, and entertainment, siphoned off existing Web3 users who have been exhausted by high-threshold on-chain financial games, and also brought traditional Web2 incremental players with huge capital and user traffic into Web3, would it become a breakthrough point for the large-scale adoption of Web3?
Web3 may usher in the "consumer-level DApp" dividend
The wind starts from the tip of the green reed. In the context of unprecedented changes in TraFi and supervision in 2024, consumer L2 represented by Morph may provide a new choice for the general public who are tired of "VC coins" and whale games.
It should be noted that the macro environment has improved significantly recently, both in terms of regulation and funding. First, on May 22, the 21st Century Financial Innovation and Technology Act (FIT21 Act) was passed by the House of Representatives with an overwhelming majority of 279 votes to 136. Then on May 24, the U.S. Securities and Exchange Commission (SEC) officially approved 8 19b-4 forms for Ethereum spot ETFs.
This means that the stance of US regulators has shifted from tough to soft. In particular, institutions that have already been exposed to Bitcoin spot ETFs are likely to expand their investment focus to Ethereum in order to seek portfolio diversification. However, this also creates an old problem:
With L2s proliferating and the threshold for on-chain dividends getting higher and higher, whether using on-chain financial services such as DeFi and NFT, or participating in testing, wooling, and other interactions to earn potential profits, they are becoming increasingly friendly to large users, and it is becoming increasingly difficult for the general public to get the opportunity to share the dividends of Web3 and project development.
Even if the Ethereum system sees an influx of funds in the future, how can this minority strategy that only serves OGs handle the massive amount of incremental users and funds?
To a certain extent, every time there is a financial game on the chain with big players, and every time there is a token airdrop activity that ignores the general public, a group of users will stop/refuse to use Web3, and the Web3 ecosystem will have nowhere to go without any new users, so the solution can only be to start from a broader basic demand like stablecoin payments and attract enough general users.
This not only reminds people of Pinduoduo, which was once labeled with the false proposition of "consumption downgrade". In essence, it used the highways of the Internet, manufacturing, and logistics to reach the grassroots general public and the most mainstream but ignored "absolute majority", thereby miraculously subverting the first-mover advantages of giants such as Alibaba and JD.com and achieving an "impossible reversal."
A single spark can start a prairie fire. So there is no such thing as consumption downgrade, only a new traffic growth strategy that sinks to the general public, and the current Web3 also needs such a "sinking" and a new traffic growth strategy that focuses more on the general public - only those consumer-oriented networks that can connect to incremental users and funds can reap the biggest dividends.
You should know that the core reason for the rapid rise of Axie Infinity in 2021 is that it has captured the basic base of ordinary people in Southeast Asia. With just a mobile phone, you can make money from playing. If you understand the strategy and have plenty of time, the income you get is several times the monthly salary of ordinary people. In short, the world of encryption and Web3 has more than just financial use cases.
In this dimension, the unique positioning of "consumer-grade L2" proposed by Morph is quite consistent with this incremental demand, especially in the context of Dencun upgrade significantly reducing L2 fees, the gas friction of the pan-Ethereum system has dropped to a historical low, and the user interaction cost has cleared the most core obstacle for the prosperity of consumer-grade DApps:
On the one hand, the consumer-level scenarios are rich enough, and the ecosystem has enough points to focus on. From satisfying the spiritual level of entertainment and leisure to satisfying the material level of on-chain assets, Morph can cover them one by one through continuous and in-depth ecological construction;
On the other hand, the consumer-oriented user market is also broad enough. At a time when blockchain is seeking to break out of the circle, by providing a low threshold and seamless experience, it can become a gateway for massive Web2 users to enter the Web3 world.
While most pure on-chain native applications such as DeFi and NFT are still seeking to break out of the circle, trying to obtain the first wave of initial traffic, and then working hard to retain users, Morph has chosen a nearly opposite path:
Targeting the massive base of Web2 Internet grassroots users, and even cooperating with leading Web2 companies, using consumer applications and scenarios as the starting point, we directly bridge billions of existing Web2 users and traditional funds into Web3 incremental users and Web3 "New Money".
Morph: A consumer-centric L2 incremental solution
To make an analogy that may not be appropriate, Morph has, to some extent, adopted a strategy similar to "surrounding the city from the countryside" - starting from the actual needs of ordinary users, seizing this incremental group, and using consumer applications as an excellent entry point for breaking through traffic:
By enabling everyone to access Web3 products and services and enjoy consumer-grade on-chain use cases, we provide each user with on-chain services including wallets, payments, social networking, games, entertainment, etc., and gradually form a pan-consumer-grade L2 ecosystem with billions of mass Internet users as the core.
Therefore, it may be a bit narrow to understand Morph as "the consumer-grade L2 of the Web3 world" in a literal sense. In essence, it wants to serve a wider range of the market with a low threshold, and bring more incremental users into the Web3 world by combining a popular path that allows Web3 to move towards more universal scenarios and a wider range of consumers.
However, “consumer applications” still seem to be an untapped land for Web3. So what exactly can be considered as consumer applications or consumer-grade DApps that combine blockchain and Web3 token economics? How to attract enough users to enter Web3 and settle down?
We can perhaps get a glimpse of the prototype of this vision from the multi-phase plan "Morph Zoo" launched by Morph last month specifically for community users:
There are currently 10 DApps available for interaction on the official website. In addition to on-chain protocols such as cross-chain bridges, liquidity protocols, lending protocols, and NFT trading markets, the official website also includes consumer & DePIN type DApps such as RapcHAIN and PingPong. (For further reading, "A New Interpretation of Morph in the L2 Siege: How Do Users and Developers Share the Bonus of Ecosystem Construction?").
RapChain
RapChain is an entertainment and interactive platform that integrates blockchain, AI, meme and rap, allowing players to create unique meme rap works and get rewards by participating in games and competitions. Any user can use AI technology to automatically generate a draft of a meme rap by spending a small amount of ETH, and can choose different virtual MCs to perform.
It also includes a game mechanic similar to a FOMO3D variant: user-created rap works will be added to the chain of works of other contestants. Players need to create and join the chain within the specified time and extend their own chain length as much as possible. The winner will receive an ETH reward, and the creator of the longest chain will also receive additional bonuses.
As the game progresses, the cost of creating rap works will gradually increase, which requires players to choose the time to join the chain more strategically.
The reason why DApps for complex entertainment scenarios such as RapChain choose Morph also reflects Morph's friendliness in the dimension of consumer-level DApps - a method of using complex technology to promote innovation without placing the burden of complexity on users.
Especially when it comes to AI-generated content (AIGC), intellectual property (IP), and NFTs, users don’t have to worry about anything happening in the background; they can simply enjoy the process of creating new types of shareable content.
PingPong
PingPong is a new solution that simplifies DePIN mining. It aims to combine Crypto's tokenization gameplay to give DePIN greater on-chain financial possibilities, thereby building an on-chain financial market centered on computing power resources.
Users only need to create an account, download and launch the application to start mining. PingPong's algorithm will automatically optimize the allocation of computing resources to achieve maximum benefits. At the same time, PingPong integrates multiple DePIN networks into one platform, so users do not need to manage multiple systems separately.
I believe everyone has discovered that these are consumer applications that already have mature user groups or underlying needs of potential users, and the reasons why they choose Morph are also very direct - combining with Morph can help these traditional Web2 consumer products enter the Web3 track at the lowest cost and provide Web3 users with consumer-grade DApps experience, thereby directly achieving incremental growth by providing differentiated advantages of richer on-chain scenarios.
Similarly, this is also Morph's exclusive competitive advantage over other public chains/L2s in cooperating with mainstream Web2 companies - not limited to pure on-chain scenarios, but instead seeking incremental growth in mature Web2 products and scenario use cases.
To some extent, this is also one of the reasons why Morph focuses on "consumer-grade DApps". By connecting incremental users/traffic with on-chain services, it is expected to reap the greatest incremental dividends while providing consumer-grade Web3 service experience to global users.
Ethereum and L2’s new paradigm of “mass adoption”?
"Useful" is the highest evaluation of a public chain, and it is also likely to be Morph's unique competitive advantage that will be difficult to replicate in the future.
In fact, the market has also discovered that the underlying logic of Web3's next competition has begun to be increasingly related to Web2. Unlike most current Web3 applications that actively seek to break out of the circle, the trend of native Web2 products colliding with Web3 and passively importing massive Web2 mature users into the Web3 world may have arrived.
Just like the stablecoin mentioned at the beginning of the article, it enables a large number of Web2 and even "Web0" users in different countries and regions, especially those without bank accounts, to obtain convenient, almost free global instant payment services, while also potentially converting them into new Web3 users and reaping the benefits of this incremental increase.
Therefore, for the entire Web3 world, consumer applications have extremely realistic industry historical significance, and may be an innovation in Web3 product thinking - creating a low-threshold Web3 product environment that is incremental and close to the experience of traditional Web2 applications, returning to a user-centric product paradigm, and thus capturing the broadest underlying value.
For Morph, helping RapChain and others enter Web3 is also a key node in its large-scale adoption of Web3, and is expected to make it a key network to connect incremental users/traffic with on-chain services:
In particular, if Morph successfully brings RapChain and others into Web3 in the future, and further leads other Web2 projects with similar strong DAU to continue to complete replication, it will to a certain extent verify the correctness and replicability of this Web3 incremental strategy.
In a nutshell, consumer-oriented may be the key entry point for Web3 to truly reach hundreds of millions of users, subverting the current Web3 incremental dilemma, bringing native Web2 users into Web3, and replicating the incremental miracle of Axie Infinity from another logic.
In this process, Morph's "consumer-grade L2" community positioning has given it the potential to attract a large number of new users and achieve large-scale adoption:
First, Morph benefits from strategic partnerships with top exchanges such as Bitget and MEXC, as well as head wallets such as Bitget Wallet and Trust Wallet, which can help DApps obtain resource feedback from a huge user pool and have the opportunity to directly reach global users;
Secondly, as the first L2 network on Ethereum to implement a decentralized sorter design from the underlying logic, Morph redistributes the sorter profits (or disposal rights) to the project parties/DApp developers on the chain, allowing the L2 ecosystem to truly have the attribute of "self-growth" (further reading "The first appearance of the "decentralized sorter" to understand Morph's self-motivated ecological flywheel");
Not long ago, in addition to the test network, Morph also launched a community-wide co-construction initiative and launched a series of support plans for the cultivation of early consumer ecosystems, focusing on the development of various consumer-level DApps (see "Morph Creative Ideas").
The program not only welcomes DApps of various consumer scenarios/use cases to join, but also provides one-stop services from multiple dimensions such as funding, development and marketing:
In terms of funding, the Morph program provides ample funding for promising new consumer projects;
At the development level, the Morph developer community can provide technical guidance and solutions;
In terms of marketing, Morph, with its rich experience and extensive resources, is able to tailor promotion strategies for DApps to enhance their visibility and influence in the market;
In short, Morph's current focus is to catalyze the emergence of numerous innovative consumer-level DApps through these all-round supports.
If "Web3 in 2022 is Web2 in 2002", then the current cold market environment may be a good time to do things, and the focus is on how to connect traditional funds with massive Web2 users.
Whoever captures the institutional giants of the Web2 world and the billions of users behind them will win this war, and Morph will undoubtedly be at the forefront through its layout for consumer applications and developers - more and more users will be expected to join the Web3 ecosystem through Morph and achieve the goal of Mass Adoption.
summary
Objectively speaking, even though the cryptocurrency industry in 2024 has begun to penetrate into "new" fields such as traditional finance and even political issues as never before, Web3 as a whole is still on the eve of a massive influx of users.
For Web3 Builder, the most urgent need is to expand the coverage of Web3 scenario use cases and open the door to incremental new Web3 users.
We have no way of knowing whether the Bitcoin spot ETF approved this year, or even the Ethereum ETF that may be approved next, is the turning point for Web3 to achieve a breakthrough in traffic. After all, only from the perspective of historical review can we clearly see what kind of far-reaching impact that seemingly ordinary and insignificant moment will have on the future.
But truly historic moments often sprout silently. This is the unknown of the Web3 era, and also the charm and opportunity of Web3.
This proposition is full of unknowns, but this is also the charm and opportunity of new solutions such as Morph's "consumer-centric" approach.
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