# Consumer Crypto: Onboarding the next 100m users Source: https://x.com/JiraiyaReal/status/1866776973353291932 Kiwi News: https://news.kiwistand.com/stories/Consumer-Crypto-Onboarding-the-next-100m-users?index=0x6759c4a5d18d86421232157f6d20d7a5e4f9235e3d4958b56e3714e3953438ed63fd29fb Submitted by gaurang.eth on 2024-12-11 UTC, 1 upvote, 0 comments ## Summary The author argues that "Consumer Crypto", apps built to reach everyday users rather than crypto natives, is critical for crypto's mass adoption, and that Puffpaw, a vape-to-earn project, is well positioned to lead this trend. The article credits StepN's walk-to-earn model with early consumer growth, reaching 2,300,000+ monthly active users at its peak, but notes its token lacked sinks and buy pressure, so usage fell as the $GMT price dropped. For Puffpaw, the article describes a data-sales flywheel in which healthcare data buyers pay in $VAPE, and it says a Puff Pass costs 0.118 to 0.133 ETH with a public sale on December 11th. ## Article Wtf is Consumer Crypto? "Consumer Crypto" is an emerging trend, popularised by ecosystems such as @AbstractChain and @sophon. It begs the question - aren't apps like Uniswap, Pendle, and Ethena technically "Consumer Crypto" too, since they facilitate interactivity with consumers? The short answer is "yes" - all of these apps have consumer facing elements, but they mostly cater towards an audience that is web3/crypto native. These apps aren't akin to the likes of Instagram, TikTok, YouTube, and Amazon, which facilitate interactivity and connectivity with billions of consumers around the globe. As it currently stands, their ability to penetrate the global market is limited - normal, average, everyday joes wouldn't have the technical understanding to interact with these types of apps. TL;DR In this article, we'll cover the following: Wtf is Consumer Crypto Why is Consumer Crypto even relevant StepN: The Story, The Success, The Shortcomings Puffpaw: Behind the Smokescreen The $1B Opportunity Why is Consumer Crypto even relevant As an industry, as investors, as speculators - we all hope that one day crypto will go mainstream and revolutionise the way businesses operate, how data is encrypted and secured, how payments are processed - and much more. It's important that this technology is embraced by both enterprises and consumers alike. It is my opinion that Consumer Crypto is absolutely critical to facilitate mass adoption. As we have seen over the last few years, many companies and sovereign nations are starting to embrace crypto. MicroStrategy is mass-buying BTC, @Meta is collaborating with @nillionnetwork and @adidas has partnered up with @Stepnofficial to launch 1200 pairs of real sneakers - to name a few. However, to date - beyond speculation - most projects haven't really succeeded in onboarding millions of everyday consumers around the world consistently. Back in 2022, we saw early signs of adoption from normal, everyday people through the walk/move-to-earn, and play-to-earn models spearheaded by StepN and Axie Infinity. StepN: The Story, The Success, The Shortcomings StepN launched in late 2021 and quickly became one of the fastest growing apps in 2022. At their peak, they had over 2,300,000+ monthly active users, 500,000+ daily active users, and 100,000+ people using it every MINUTE. These are some crazy stats. What made it so freakin popular? I believe it became wildly successful because the concept was innovative, consumer education required was minimal, and interactions were seamless. You walk, you earn - it's that simple. I recall being in their Discord in the early days. I participated in one of their first Pop Quiz's, actually won a free pair of StepN shoes and began playing around with them. Honestly - the app was pretty clunky, and unintuitive at the beginning, but the idea was pretty simple to grasp. The caveat was that your rewards weren't in USD, rather it was in their native token - $GMT. To realise your gains, you had to sell it creating downward pressure on their token. They had various mechanisms to act as token sinks to offset some of this pressure, i.e. tokens were required to "repair" your shoes after a period of time, to level up your shoes, and to mint new shoes. Beyond usage for in-game elements and speculation of higher prices, there was no reason to buy the token. As $GMT skyrocketed from $0.01 to $3.8, people began to sell $GMT to realise their gains. As $GMT's price started to cascade lower, the incentive for users to walk-and-earn diminished also. Said differently, with all of these "xxx-to-earn" models, there is a positive correlation between incentives and usage. To Recap Consumer Crypto is critical to facilitate mass adoption Most apps have had little success in penetrating the global market StepN appealed to those who were conscious about health & fitness, bringing an influx of consumers into Crypto through their "move-to-earn" model "xxx-to-earn" models are great at bootstrapping adoption and penetrating the global population; however, lack of token sinks & buy pressure will lead to lower token prices, diminished incentives, and ultimately reduced usage. Therefore, if a protocol adopts a similar model and nails all three pillars below - I believe they have a good shot at crossing the chasm. Alignment. The behaviour you're incentivising must be aligned with their daily actions/routines. I would walk-to-earn, but I wouldn't climb-mount-everest-to-earn. Frictionless. The barrier for entry must be low and it must be easy to grasp. No one reads "docs" to use Netflix. Incentives. Must stay attractive and be scalable. It's worth noting that incentives don't always have to be monetary - social status and a sense of belonging in a "cool" club are powerful drivers too. Puffpaw: Behind the Smokescreen When I first heard about Puffpaw, I honestly rolled my eyes. Vape-to-earn sounded like such a ridiculous idea. Why would anyone build this? Later on, they announced the completion of their $6m seed round with the likes of @rushimanche from Movement, @Melt_Dem from Crucible Capital, and @santiagoroel from Inversion Capital on their list of investors. I was confident that these reputable individuals weren't in the business of burning money, so I dug a bit deeper. We invited @reffoPuffpaw for an interview with us at the studio during Token2049, and when he shared the big picture - I got the "aha" moment. Click here for the full interview. I went from "this is ridiculous" to "holy shit, this is huge" in those 60 minutes. There are countless articles, threads, and resources that already explain how Puffpaw works, so I'll skip straight to the good part. Click here for a good Puffpaw explainer. Here's a few points as to why I believe Puffpaw is well-positioned to penetrate the global market, become one of the first projects to cross the chasm, and with its success - usher in a new wave of Consumer Crypto projects: Alignment. Smokers and vapers around the world already indulge regularly. The main difference here is that they're rewarded for using low/no nicotine vapes, enabling existing smokers/vapers to lower their nicotine intake & dependency over time. Frictionless. No web3 experience? No problem. Once you have the vape, you download their app, and you're good to go. No change in behaviour required, only a change in device. Incentives. Users are rewarded in their native token $VAPE, and similarly to StepN - there are various token sinks. However, as observed - it's difficult to maintain a healthy price level relying on token sinks & speculation in isolation. Puffpaw has solved for this, I'll explain below. In my opinion, the most bullish thing about Puffpaw is their ability to track & accumulate data from potentially hundreds and thousands of smokers & vapers around the globe. This isn't the kind of data that companies can just go out and buy - in fact, it doesn't even exist in the market yet. Healthcare data consumers and insurance companies would be happy to pay a significant premium for this type of data. Data collected from Puffpaw's Smart Vape can be bought by these companies using $VAPE. This creates demand for their native token and kicks off the revenue-data flywheel. TL;DR of the Flywheel: Puffpaw bootstraps their initial userbase by rewarding early adopters with $VAPE. A fixed amount of $VAPE is allocated per day to the rewards pool, thus capping and controlling inflation. More users = More data collected. More data collected = More data available to be bought by healthcare data consumers. Data can be purchased via $VAPE (or, USD which then buys back $VAPE). More data bought = More demand for $VAPE. This creates consistent buy pressure and potential for price appreciation. As noted in our StepN example, there's a positive correlation between incentives and usage. Thus, higher price = more usage --> more data and so on. Note: Users have the choice to opt-in to sell their data collected through usage of Puffpaw's Smart Vape. You can choose not to. The $1B Opportunity In the last 6 months, interest around Berachain, DePIN, Consumer Crypto, and DeSci have spiked. Puffpaw is the only project that intersects with all 4 trends. During the StepN craze, its market cap rose to $2.2B+, this gives us a benchmark for the potential of Puffpaw if it succeeds in penetrating the global market. Now, to address the elephant in the room - how do you get exposure? Puffpaw is hosting their Puff Pass Public Sale on December 11th, 10am UTC. 1 Puff Pass = 1 Puffpaw Smart Vape + 3 Pods + $VAPE Airdrop. They announced yesterday that 5% of their token supply will be allocated towards Puff Pass holders. This means you could potentially get exposure to Puffpaw's $1B+ potential for FREE - let me explain: A Puff Pass costs 0.118 - 0.133 $ETH to mint. Assuming $ETH is $3,500 - that's approximately $413 - $465. They raised $6m previously, I assume they raised against a $60m FDV. In a bull market, most projects launch at a premium relative to the valuation they last raised at, so we could assume they launch somewhere between the $100m - $250m mark. As noted, 5% of their supply is allocated towards Puff Pass holders - so we're looking at $5,000,000 - $12,500,000 in rewards, distributed to 10,000 holders. That's approximately $500 - $1,250 in rewards for each holder. $500 > $465 (mint price). Profit 🤝 You can use "Jiraiya" as your Referral Code to get 10% off your order. "I don't smoke, or vape" - Don't worry, you can give your vape to a friend, or participate in their leasing-borrowing program. You'll receive the full airdrop. You and your friend can split the $VAPE incentives every time they vape. Where are my passive income enjoyooors? Closing comments Consumer Crypto is a trend that I'll be keeping a close eye on over the course of this cycle. Whilst Puffpaw is positioned very well to lead, I'm confident that other huge opportunities will arise within this cycle. Puffpaw in particular stood out to me because it reminds me of StepN's early days before it made a monstrous climb to a $2.2B Market Cap. It's important to note that when it comes to investing - having a good idea and a strong product isn't enough. You have to believe in the team and their ability to execute, especially if they're to compete with the giants that exist in the smoking/vaping industry. Having personally spent time with @reffoPuffpaw, @kaiski_eth, and @Rishi_Puffpaw - I can see that they operate with a high level of operational excellence. In fact, they have their own pre-established vape factory set up in China, and their web2 vape business has sold 76m vapes last year around the globe - it's fair to say that distribution will be a strong suit for Puffpaw. Disclaimer: I've been minting Puff Passes and currently hold 4, and I'll will be picking up more in the Public Phase. As always - none of this is financial advice, always do your own research to ensure you make informed decisions.