1 min read

Racing to zero

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Every business has competition--whether it's a physical storefront or a dApp. The thing that most people in crypto seem to get wrong is who their competition is. In my opinion, this is because of the high barriers to entry for non-technical, non-rich people. Even if your dApp is easy to use, you're inherently limited to customers who already own the cryptocurrency of the chain you're built on (which is why I'm building KAP).

When most of your potential users already know about NFTs, consensus algorithms, and the benefits of layer 2, it's easy to miss the bigger picture. There are lots of people who don't know anything about blockchain who might actually be a good fit for your service, but they'll never know.

So, when you build an NFT marketplace (or anything else), you're probably thinking that you're just competing with other NFT marketplaces. That's like fighting over a slice of bread in a bakery. Just buy another loaf. If you build a dApp for the usual suspects, then yes, you're competing for a small (but wealthy) potential userbase. You can be very successful doing this, but it's pretty easy for other dApps to come in and undercut your prices.

To avoid the inevitable race to zero, you have to do one of three things:

  1. Be significantly more valuable than your competition through features, support, community, etc. (difficult)
  2. Be significantly more accessible than your competition so you can attract people outside the crypto bubble (easier)
  3. Niche down (more on this another day)

If your dApp can be picked up by anyone, then your competition is no longer just "other NFT marketplaces." You have to look at why normal people want to use your dApp. Figure out what web2 services exist to solve that problem. That's your competition.


P.S. Successfully positioning a dApp for the masses will also require niching down.