04 November 2024 Is Market Research Possible for Web3 Applications?
Market research in the Web3 ecosystem operates with dynamics that differ significantly from traditional methods. Decentralised structures, blockchain data, and community participation play a significant role in shaping research practices. Web3 enables data collection directly from the blockchain while conventional market research typically relies on tools such as surveys and focus groups. User privacy is maintained, even as behaviours and digital assets are tracked anonymously. Below are the market research methods and measurement metrics commonly used across leading Web3 applications
Crypto Wallet Applications:
User behaviour is analysed through on-chain data and asset transfers between wallets. Feedback on user experience is collected from social media and community platforms.
DeFi (Decentralised Finance) Applications:
User liquidity movements (the amount of assets provided to or withdrawn from the platform) are key measurement metrics. Smart contract interactions and on-chain data are essential for understanding user preferences and platform engagement.
DAO (Decentralised Autonomous Organisations):
DAOs are digital organisations governed entirely by the community, with rules encoded in smart contracts and user engagement and participation in governance are measured through community involvement and voting activity using governance tokens.
NFT Marketplaces:
NFT sales volume, user transactions, and community interactions are analysed. Social media engagement is a significant factor in assessing the popularity of NFT collections.
Metaverse Applications
Data such as event participation, avatar customisation, and digital asset usage is analysed to understand user behaviour. Feedback from social platforms and community surveys is used to gauge user expectations.
As outlined above, market research in Web3 applications driven by direct data collection and interaction within decentralised structures and digital communities differs significantly from conventional approaches Let us examine these differences in detail:
1. Data Sources
• Conventional Market Research Typically relies on methods such as surveys, focus groups, and observations. Data is obtained from centralised systems (sales reports, user analytics tools) and processed by research firms.
• Web3 Market Research Relies on public databases stored on the blockchain. Smart contracts, token movements, and user behaviour can be transparently tracked. Data is distributed rather than stored under centralised control.
2. User Interaction and Privacy:
• Conventional Market Research: Often requires direct user participation, such as completing surveys or sharing personal information. Users are informed about data collection, but how their data is used may lack transparency.
• Web3 Market Research User privacy is paramount, as individuals can participate on the blockchain using anonymous identities. Permission processes for data collection differ, with the Web3 structure giving users greater control over their own data.
3. Community and Participation Dynamics:
• Conventional Market Research: Primarily focuses on consumer groups or segments. Research is based on a one-way relationship between brands and customer
• Web3 Market Research Users are active members of the community. They may also take on roles as investors, developers, and decision-makers. Community feedback and participation occur in a far more direct and effective way
4. Reward and Participation Models:
• Conventional Market Research: Participation in research is usually secured by offering a reward or incentive.
• Web3 Market Research Token-based rewards are used to encourage participation. Users can earn cryptocurrency or tokens when they contribute to the platform.
As a result, market research for Web3 applications enables more direct data collection, thanks to the transparent nature of blockchain technology. However, since this data is less structured than traditional metrics, alternative approaches are developed to interpret user behaviour. Market research on Web3 platforms such as crypto wallets, DeFi applications, NFT marketplaces, and DAOs is conducted by tracking user behaviour, community participation, and on-chain data.