原文标题：《 Revisiting Aggregation Theory 》
Original article by Joel John
A year ago, we wrote about convergence theory in the Web3 era. In the Web 2.0 era, aggregators benefit from reduced distribution costs and bring together many service providers. Platforms like Amazon, Uber and Tiktok make a lot of money from the service or value that hundreds of vendors, creators or drivers provide to users. At the same time, users are given endless choices. For creators, scale is key. I chose to tweet on Twitter instead of Lens because that's where most of my followers are.
在 Web 3.0 中，聚合器主要依赖于验证和信任成本的降低。如果你使用了正确的合约地址，那么你就不用担心在 Uniswap 上兑换到假的 USDC。像 Blur 这样的市场平台无需花费资源来验证平台上交易的每个 NFT 是否真实，因为网络本身承担了这部分成本。
Aggregators in Web3 make it easier to see asset prices or find their list location by examining the data on the chain. In the past year, most aggregators have focused on consolidating on-chain data sets and making them easy for users to use. These data may be related to price, yield, NFT, or asset bridging pathways.
The assumption was that companies that expanded rapidly as interfaces to aggregators would establish monopolies. I specifically mentioned Nansen, Gem, and Zerion as examples. Ironically, however, looking back over the past year, my assumption is not accurate -- and that's what I want to talk about today.
Don't get me wrong. Gem was acquired by OpenSea a few months later. Nansen raised $75 million, while Zerion raised $12 million in October. So from an investor's point of view, my assumption is correct. Each of these products is the best in its field, but what prompted me to write this article is that the relative monopolies I predicted have not materialized. Instead, they have all faced the emergence of rivals in the past year. This is a desirable trait in an emerging field.
So, what has happened in the past few years? As I wrote in The Battle Over Royalties, Gem's (and OpenSea's) relative monopoly was under threat after Blur entered the market. Similarly, Arkham Intelligence combines an exciting user interface, possible Token offerings, and a clever marketing strategy to compete with Nansen by recommending reward tokens. Zerion may be feeling relatively comfortable, but Uniswap's new wallet launch could eat into their market share.
Do you see the trend here? Aggregators, which used to grow steadily without tokens and backed by equity investors, are now at risk from companies that issue tokens. This concept of "community ownership" will become increasingly important as we move deeper into the bear market, as limited consumers who hold their ground want to make the most of every dollar they have. There's also the novelty of being rewarded for using the platform rather than paying to use it.
So, on the one hand, companies with a long history of positive cash flow will see revenue decline; On the other hand, they will see users flock to competitors. Is this sustainable? Absolutely not, and here's how it works:
Companies launch a product that hints at tokens, and if the release is tied to a recommendation program, so much the better. Arkham Intelligence, for example, offers tokens to users who access their platform, and given the possibility of airdrops, more and more users will spend time with the product. This is a feature, not a bug.
It's an incredible way to stress test products, reduce customer acquisition costs, and channel network effects in your products. The challenge is retention, and once Token rewards are no longer offered, users often move on to other products. As a result, most developers of "hint" tokens have no idea how large their user base is.
The following person sums up the philosophical underpinning of the average person in crypto today, a good summary of the self-interested behavior that drives our world:
It is worth noting that there has been a historical trend in the past for users to abandon Token release projects for existing ones. The catch here is that the founders (probably) believe that users acquired through Token incentives are sticky. Under ideal conditions, the graph of the relationship between Token incentives and product users should be as follows:
But the reality is that the initial influx of users abandoned the project almost entirely as Token incentives dwindled. There is no reason for them to continue contributing to the product after losing the incentive that attracted them in the first place. This phenomenon has plagued DeFi and P2E for the past two years.
Users who accumulate tokens and hold them become new "community" members who want to know when asset prices will rise enough for them to exit.
(I have argued that market participants are rational, self-interested actors.)
My original argument for simply aggregating the feature sets of multiple products into one interface, using blockchain as the backbone of the infrastructure, as a persistent moat, was probably wrong. I wonder why leaders with comparative advantages are being replaced by other companies in Web3. Binance toppled Coinbase, and they faced competition from FTX. OpenSea sees competition from Blur. Sky Mavis, the maker of Axie Infinity, could face heat as new entrants such as Illuvium enter the market. Why did Web3 users leave over time? What does it take to keep a user long enough?
What can be a kind of moat in the Web3 era, when everyone can publish a version with the Token embedded? I've been thinking about this a lot because we live in a narrative shifting market where every quarter there's a new "hot" thing. That's why the venture capitalists I follow went from remote working specialists to experts in dealing with Taiwan's geopolitical tensions overnight.
This works, of course, if you're just trading between assets (which, by the way, is the "use case" for most people in crypto). But if you want to build an asset base that grows over time (such as an equity stake in Google or Apple), rotating between assets can be a bad idea.
This also applies to how consultants change their LinkedIn resume
You ultimately want the investment of time, money, or effort to grow without the need for active management. And the only way to do that is if products do two things: first, retain the users they already have; Secondly, actively expand to prevent competition from eroding its market share. So what can be done to make this happen? (You know it's a bear market when people start thinking about moats and retention.)
Part of the reason for this is to rank companies on a spectrum between innovation and convenience. In the early days, a primitive product like the NFT was a novelty that attracted people willing to go to great lengths to try it.
It's easy to deal with seed phrases in our wallets because the novelty of using "digital money" is enough to draw us in. If you notice how curious users are about Ordinal, you'll realize how patient users are. The early profit factor is what pushes users to stick with the speculation and profit in tough times.
At the other end of the spectrum are the high-convenience tools we rely on every day. Amazon is an example of an aggregator that makes us addicted to convenience. Consumers may benefit from buying a niche store that is not listed on Amazon, and the merchant may not be priced properly on Amazon.
But the last thing you need to worry about when making a decision is payment methods, delivery times or customer support. This psychological "saving" translates into spending more attention or capital on aggregators. Many sellers come to Amazon precisely because they understand how consumers behave differently in the marketplace than they would if they just walked into the store.
Tim Wu summed up the lengths people go to for convenience in a 2018 post:
Sure, we're willing to pay a premium for convenience, and often more than we realize. For example, in the late 1990s, music distribution technologies like Napster made it cheap to access music online and attracted a lot of people to use them. But while it's still easy to get music for free, no one really does, because the iTunes store, introduced in 2003, made it easier to buy music than to download it illegally.
Going back to the spectrum I originally mentioned, novel technologies often pay users to try them out. In contrast, highly convenient applications make users pay high prices in pursuit of convenience.
The challenge for most consumer-facing applications today is that they are in the middle of "Death Valley," what I call the middle ground. They are neither new enough to want to try, nor convenient enough to be relied upon without outside intervention. Skiff, Coinbase Card, and Mirror are good at substituting their traditional equivalents on the convenience spectrum of this equation.
However, take games, lending, or identity tracks, and you will see why these topics have not yet been extended on the chain.
Most applications in the middle make the fatal mistake of competing with each other. First, increase customer acquisition costs and employment costs through advertising and recruitment, and then compete by producing riddles and publishing peer specific narratives. As Peter Thiel once said, competition is for losers.
When start-ups start competing in niche markets, there are usually no winners. In his words, the only way start-ups can turn from the struggle for survival is to have monopolistic profits. But how can this be achieved?
In Web3, if a company wants to grow beyond tokens, it can look at three areas: cost, application case, and distribution. There have been some examples in the past, so I'll go through them one by one.
From the user's point of view, the cost incurred is not just the money spent on the amount transferred, but also the time and effort required to move the money. Debit cards do for e-commerce what stablecoins did for remittances: they reduce the cognitive cost required to transfer money. You can offer slightly higher revenue than most consumer-facing revenue-generating mobile apps, but given the crash risk, the value proposition will fail.
If you're gathering niche users in a new industry, distribution can be a moat, just think about how Compound and Aave unlock new lending markets. Few people see value in taking out a $50 mortgage on Ethereum for $100. But there's a market that's not being served that many people are missing -- mainly crypto-rich people who don't want to sell their assets in a bear market.
You would be wrong to think that people without access to credit lines in emerging markets would drive DeFi lending volumes. But in reality, the driving force is the crypto rich, a demographic that previously had no access to banking services. Being a "hub" in relation to a domain can capture the attention of users and drive the development of a single feature. Coingecko and Zerion are two companies that do this well.
Given that the marginal cost for a company to get users to use new features is almost zero, it becomes cost-effective to iterate and add new revenue streams to the product itself. This is why platforms such as WeChat (in Southeast Asia), Careem (in the Middle East) and PayTM (in India) tend to do well.
When players like Uniswap launch wallets, they are really trying to bring users together in an interface that can push more features (such as their NFT marketplace) at a lower cost.
Products such as ENS, Tornado Cash and Skiff have established a loyal following of users who value unique features that these traditional alternatives cannot offer. For example, Facebook does not associate wallet addresses with a user's identity, and Tornado Cash offers unparalleled privacy protections compared to banks.
You can imagine that users of these products often stick with them because there is often no comparable alternative. However, introducing new use cases requires educating and raising user awareness, which takes time. However, being the first to enter the market can capture most of the market share.
In its early days, LocalBitcoins was the only peer-to-peer trading platform and helped pool liquidity in emerging markets, such as India, keeping it at the forefront until 2016.
Scaling products by focusing on traditional growth tools is difficult in a bear market. These products have survived multiple market cycles. The success of Axie Infinity is due to two years of foundation work by the team leading up to 2020, allowing them to build a strong community, manage tokens, and balance the interests of investors and users.
That's why venture capitalists like to invest in developer tools and infrastructure during market downturns. In response to the lack of interest from retail users, the company turned its attention to enterprise-oriented solutions and built tools for developers so they could engage retail users. Coinbase has realized this, releasing tools like the wallet API in a bear market. LI.FI is the poster child for this trend, providing developers with SDKS to enable their applications and users to support multiple chains.
LI.FI (short for Liquid Finance) is a multi-chain-enabled liquidity aggregator that provides developers with SDKS to enable their applications and users to support multiple chains. For example, if Metamask or OpenSea wanted to allow users to move assets between Polygon and Ethereum, LI.FI's SDK would determine the best path to move money across Bridges and decentralized trading platforms (DEX), This allows developers to focus on their core competencies.
Think of aggregators, such as Li.Fi, as building blocks that developers place in their applications to help users move assets between chains at the lowest cost
Although there are many similar competitors in the market, LI.FI is a good example because they meet the criteria I mentioned earlier and Philipp shared with me eight months ago, which I've been using as the basis for this article. But let's get back to LI.FI's strategy.
LI.FI has done several things to build a strong moat that meets the criteria I mentioned earlier:
· They focus on enterprises rather than retail investors and aim to appeal to developers building applications that need to migrate across chains.
· Their products can save companies research and maintenance time and resources, and are relatively easy to sell in a bear market.
· For end users, LI.FI provides the best transfer cost base and increases people's willingness to use its SDK integrated products.
· They are the first platform to integrate new chains, with less competition.
· Their target user base is mainly industry players who are already familiar with cryptocurrency and do not need much knowledge popularization work.
Although LI.FI is not the only cross-chain aggregator on the market, and even if they meet the cost, demographic, and use-case criteria I mentioned earlier, it is difficult for any aggregator to build a strong moat. I'm interested in how LI.FI has evolved from a novelty tool to a convenience tool.
In the early days, users relied on bridging aggregators because transferring assets between different blockchains was a time-consuming process that required passing centralized platforms and security checks. Today, DeFi users are sending billions of dollars across chains, but ordinary people aren't interested.
So how do you survive when the novelty wears off? If you've noticed how Nansen and LI.FI work, you can get an answer by looking at who they sell their products and services to: LI.FI sells primarily to developers, and yesterday Nansen launched Query, a tool that gives corporations and large funds direct access to Nansen's data, which they claim is 60 times faster at querying data than its nearest competitor. So why are both companies focusing on developers?
The key question for anyone using the Nansen query tool is whether the tool saves enough time and effort to justify its cost. Decision makers often avoid building from scratch if the cost of developing tools in-house is lower than the cost of commissioning a third party, such as LI.FI.
To stand out as a convenience, companies must focus on a small number of high-earning users who are willing to pay for the added value of the product. By catering to these users, companies can generate enough revenue to attract more users to their products and become the convenience tool of choice.
I talked to Alex at Nansen about this framework, and he came up with a different perspective. Users always seek value, regardless of market conditions. In a bear market, large customers such as enterprises and networks require specific data sets that are often not available from third-party vendors. By tailoring products to meet their needs and demonstrate their value, companies can generate more revenue and face less competition.
In my previous post, I mistakenly assumed that using blockchain was a competitive advantage rather than just a product feature. Since then, a number of DeFi revenue pooling platforms have been launched, but most of them have failed. Simply integrating the blockchain may not matter if competitors can use the same features and provide a better user experience or introduce tokens like Gems. In this competitive environment, we need to think about what really differentiates products.
As I write this, a few trends are evident. First, acquiring users in a bear market is expensive because retail investor interest is low. Unless there is novelty or convenience, the product is in a tough position. Second, businesses that focus on building products for other businesses (B2B) can grow sustainably and capture the market in a bull market, like FalconX. Third, poorly designed tokens can only be a competitive advantage for a while, but a burden in the long run. Only a few communities have succeeded in increasing the value of their tokens.
当我们思考像游戏或 DeFi 这样的散户市场时，很明显大多数人不关心区块链的技术细节、去中心化或链上身份，他们关心的是他们可以从中获得的价值。尽管区块链可以增强最终用户产品的价值，但创始人常常陷入为风险投资家（VC）或 Token 交易者建立和销售产品的陷阱，而没有基于成本、便利性和社区的竞争优势。