š Whatās stopping crypto platforms from becoming household super brands? The answer is simple: absolutely nothing. Hendrik Ghys, co-founder and CEO of Thalex, believes the rise of crypto exchanges as super brands isnāt just possible ā itās already happening.
Super brands arenāt just about being known; theyāre about customer captivity. š Bruce Greenwaldās Competition Demystified highlights three key ingredients for locking in customers: habit, switching costs, and search costs. Crypto exchanges? They tick all the boxes.
From Borderless Beginnings to Global Giants
Crypto didnāt emerge like traditional finance did. Thereās no āWall Streetā equivalent in the crypto world. š Instead, crypto was born global, borderless, and internet-first. Exchanges like Binance and Coinbase embraced this ethos, welcoming users from every corner of the world.
In the beginning, crypto platforms didnāt create habits. Why? The space moved too fast. ā” Users hopped between exchanges, chasing the hottest coins and the latest features. But as the market matured, so did user behavior.
Perpetual trading became the game-changer. š Exchanges offering stablecoin settlements and altcoin perpetuals created habits by giving users the tools they craved. And as KYC protocols and regulations increased, switching between platforms became more cumbersome.
Just like in the tobacco industry š¬, stricter marketing rules solidified top brandsā positions. Fewer options mean traders stick to what they know unless a new platform offers something truly groundbreaking.
The Exchange Paradox: Why Top Brands Are Never Safe
Hereās the catch: staying on top is harder than getting there. šļø The āexchange paradoxā means that once a crypto platform becomes too big, it risks losing its agility and innovative edge.
Think of BitMEX. It dominated the perpetual trading sceneā¦ until system outages and customer dissatisfaction opened the door for competitors like Deribit. āļø Deribit seized the moment, offering better reliability and improved user experience, breaking BitMEXās habit lock on traders.
Big brands also attract big regulators. š Binance, for example, has faced global scrutiny, becoming a prime example of why staying under the radar can sometimes be smarter than grabbing the spotlight.
Meanwhile, smaller exchanges have the flexibility to pivot quickly, introducing features and products that giants canāt match. But once they grow too large, the cycle begins again.
The Secret to Becoming a Super Brand
To break free from the cycle and become a true super brand, crypto exchanges must master the trifecta of habit, switching costs, and search costs. š
They need to:
ā¢ Stay entrepreneurial and innovative. š”
ā¢ Proactively engage with regulators. āļø
ā¢ Build trust and habits inch by inch, user by user.
No brand is invincible. š”ļø But those that understand the importance of consistency and customer captivity have the best shot at building lasting empires in the crypto world.
As Hendrik Ghys says, āTrust and habit are built millimeter by millimeter.ā The exchanges that embrace this philosophy are the ones that will dominate the future of crypto. š