Crypto Industry Shifts Focus Toward Retaining Users and Mainstream Adoption

Focus moves from building products to keeping users

After years of developing blockchain technology, crypto companies are facing a new challenge: getting people to actually use their products. Blockchain is the digital ledger technology that runs underneath cryptocurrencies. As the industry moves closer to mainstream finance, firms are shifting their focus from engineering to user retention.

Companies are now trying to figure out what will make consumers and institutions choose crypto-based services over traditional ones. This change comes as asset managers launch tokenized funds, which are investment funds represented as digital tokens on a blockchain, and exchanges expand into lending and payments.

Primary takeaways for the industry

• The industry is moving away from tech-heavy jargon toward everyday financial utility.
• Coinbase uses a \"flywheel\" model to encourage users to deposit, hold, and spend money.
• Rewards and incentives are being used to break user inertia and encourage the first use of a product.
• Institutional investors are looking for proof of real-world adoption and business deals rather than just technical tests.

Coinbase focuses on financial utility over technology

Ben Shen, head of financial services and loyalty products at Coinbase, an exchange where users trade digital assets, says the industry has been too focused on technology in the past. He noted that customers care more about growing, holding, sending, and spending their money than the underlying blockchain tech.

Coinbase is looking for \"magic moments\" where users can immediately see the value of a product. The company's strategy involves a cycle: attracting deposits, giving users a reason to keep assets on the platform, and providing ways to use those assets. Rewards are often used to start this cycle, with the hope that users will stay for the convenience once an initial promotion ends.

Institutional demand for proven adoption

Kevin O’Leary, chairman of O’Leary Ventures, recently stated that blockchain networks must show actual adoption to win over institutional business. During a summit in New York, O'Leary emphasized that these networks need to demonstrate real deals and active usage rather than just showing that the technology works in a test environment.

Meanwhile, other traditional finance firms are also pushing for wider reach. WisdomTree is currently expanding the distribution of its tokenized funds to reach more potential users as the race for adoption continues.

Why user retention matters for crypto

For the crypto industry to succeed, it must move beyond experimentation and become a habit for users. Proving that blockchain-based financial products are useful for daily needs is considered essential for competing with traditional banks. By focusing on ease of use and trust, companies hope to turn occasional curiosity into long-term customer loyalty.

Sources

• CoinDesk