In the last few years, we have seen incredible growth in the number of Web3 projects that aim to create decentralised versions of traditional Web2 platforms and services. These Web3 projects are often businesses with products that need to be developed and scaled in order to be successful. Ideology alone is usually not enough to sustain a project long-term, and simply building a good product does not eliminate the need to reach and engage people to get them to use your product. Furthermore, for Web3 projects to be truly successful, their products must be significantly better than their centralised counterparts in order to overcome the added friction of using a product with a cryptocurrency backend.
When it comes to measuring the success of Web3 projects, many have traditionally been judged based on their price and market capitalisation. However, these metrics alone are not reliable indicators of long-term success. To better understand the success of Web3 projects, we must being to incorporate metrics such as Total Value Locked (TVL) for decentralised finance (DeFi) projects, the number of developers and applications built on top of Layer 1 and Layer 2 projects, and the number of active wallets for play-to-earn gaming projects.
In the case of DeFi projects, TVL is a good metric for measuring the overall value of assets locked in a protocol, but it is not always a reliable indicator of long-term growth as users and traders may switch between different DeFi apps in search of higher yield. A better metric for long-term growth in DeFi may be the number of active wallets, as well as the number and quality of integrations with other wallets, exchanges, and DeFi products.
For Layer 1 and Layer 2 projects, growth is primarily driven by the number of developers and applications built on top of the protocol. The more developers and applications that are built on a protocol, the more successful it is likely to be in the long-term.
Finally, in the case of play-to-earn gaming projects, growth can be measured by the number of active wallets, as well as the number of users engaging with the game and the number of in-game assets that are being bought and sold. These metrics can provide a more accurate picture of the success of a Web3 project than traditional metrics like price and market capitalisation.
We are still at very early stages of figuring out the best combination of metrics and attribution to fully understand the impact of the activity we run for the web3 space. Innovation, out-of-the-box thinking and experimentation will be critical to the future of marketing attribution in the future.