Finding and retaining active users is a constant pain point for any business, and in the brave new world of Web3 technology, it is a battlefield swarming with bots, lukewarm participants, and unethical practices that ebb away trust and confidence.
Many projects constantly grapple with identifying genuine users who are actively engaged in the DeFi space. However, the emergence of Artificial Intelligence (AI) promises to be a game changer as it offers a powerful tool to cut through the noise and identify high-quality users.
In most cases, Web3 projects rely on outdated strategies like airdrops and gamified quests to attract users and grow their communities. While these methods might provide a spurt of activity or result in a temporary hype, they often fail to capture long-term engagement, which is a fundamental requirement for a sustainable growth pattern.
Take for instance, airdrops are widely used to attract participants solely interested in free crypto tokens, and gamified tasks can bring about liquidity challenges when rewards are no longer forthcoming. While they offer a semblance of growth, these methods fail to differentiate between users who are genuinely interested in the project's goals and functionality, and those who are only involved for quick monetary gains.
How AI Is Transforming the User Engagement Landscape
Artificial Intelligence is no longer a buzzword. It is a reality that is unfolding in our everyday lives. The impact of AI in the crypto ecosystem has mostly been a positive one. Crypto platforms like BonusBlock and DIA are utilizing AI to analyze on-chain data, which paints a detailed picture of a user's behavior within the DeFi ecosystem. AI models have been deployed in the following instances:
- Protocol interactions: This is to determine how frequently a user interacts with different protocols.
- Token diversity: To help identify the number of tokens a user holds as a means of indicating a broader interest across the DeFi space.
- Liquidity: This underlines how AI can be used to track a user’s contributions to liquidity pools, signifying a stake in the DeFi market's health.
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Staking: Determining a user’s interest in staking is a way to measure his commitment to specific projects.
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Governance: Voting in governance proposals indicates a user's active involvement in shaping DeFi protocols.
By analyzing this data, AI can identify users who are financially active and genuinely engaged with DeFi, weeding out bots, airdrop farmers, and those with only a passing interest.
Example 1: Bonus Block
In this example, AI is primarily deployed by Bonus Block, a web3 engagement protocol, to facilitate user acquisition through BONUS, its native token. Users receive rewards in the form of the platform’s token for their on-chain activity, a strategy designed to encourage them to actively participate in the DeFi space.
Through this means, users with higher engagement scores, identified through AI analysis, gain greater visibility to projects seeking qualified users.
Example 2:
DIA, an AI-powered platform, deploys cross-chain oracles to assess a user's creditworthiness in the DeFi ecosystem. The key purpose it serves is to allow projects to identify users who are trusted borrowers and lenders.
Benefits of AI-centric Approach
Acquiring users in web3 utilizing an AI-powered approach creates a win-win situation for users and projects. It gives web3 projects access to genuinely interested users who are more likely to be converted to long-term members of the community. Users, on the other hand, can leverage their on-chain activity to showcase their value and potentially earn rewards from projects seeking their engagement.
Additionally, AI can be used to analyze user sentiment on social media platforms to gauge interest in specific projects and identify potential early users.
The Future of Web3 User Acquisition
While AI-based user acquisition is still a new marketing experiment, it promises to transform how users are acquired and retained in web3. It goes to show that the success of any web3 project does not only lie in their marketing strategies, but in building genuine connections.
AI will feature prominently in the future when the need to leverage AI for intelligent targeting, personalized experiences, and community engagement, arises. It will help Web3 projects grow a loyal user base that actively contributes to the growth and sustainability of Defi.
Conclusion
AI is ushering in a new era in web3 user acquisition, offering a better alternative to traditional airdrops and gamified concepts. By analyzing on-chain data and identifying active users, it can provide a solution to the prevalence of bots and unethical practices. With the help of AI, blockchain projects can reach high-quality users who are more likely to become loyal members.
As AI continues to attract significant attention in web3, its potential to reshape Web3 user acquisition entirely is evidently present, helping us to imagine a future that is built on genuine engagement and mutual benefit for both projects and users.