What Next For Crypto After FTX Collapse? BDC Consulting releases a survey of 50+ crypto executives

TALLINN, ESTONIA, Dec. 30, 2022 /EINPresswire.com/ — A new survey of Layer 1 and Layer 2 executives reveals 8 causes of the current state of the market: from a lack of use cases to a loss of user trust. CEOs of projects like Hedera, Akash Network and Celo have also shared their strategy for surviving the bear market.

L2 has signed far fewer deals than any other blockchain niche

FTX’s collapse may have sparked the recent bearish wave, but it would be too easy to take it as the ultimate reason. Where do project founders and decision-makers see the real causes? To find out, BDC Consulting conducted a survey of more than 50 Level 1 and 2 executives. The reason for selecting this group is that BDC’s recent crypto investor study cited infrastructure projects as the safest investment opportunity.

The survey brought together C-suite executives from L1 projects such as Dusk Network, Hedera, Celo, ChainSafe Systems and Akash Network; as well as L2s and bridging solutions such as Convex, Allbridge, Radix Network and Stroom.

By the end of December 2022, the combined capitalization of these three niches was $47.3 billion, or 30% down from 6 months ago. Of this amount, 80% went to L1s and 20% to L2s and bridges. Interestingly, in the second half of 2022, Layer 2 projects suffered the smallest drop in market cap of any niche except memecoins: just -5% (vs. -27% for DeFi, -42% for Bridges and -45% for GameFi).

The 8 causes of user flight and lack of liquidity

Respondents collectively identified user outflow and liquidity deficits (rather than low prices) as the top challenges blockchain projects are currently facing. They in turn named several causes that led to this situation, which can be divided into several categories:

project related

– Poor value for money;
– Limited use cases;
– Lack of user engagement and retention strategy.

For example, Dusk Network founder Emanuele Francioni said, “The biggest lesson is that we should always build for real-world use cases. we must think […] What does the blockchain enable you to do that you might not be able to do better otherwise?” And Allbridge CEO Andriy Veliky adds: “Compared to the DeFi spring, when there was a lot of experimentation with different blockchains, there is currently a crisis of ideas in crypto. ”

market related

– New attack vectors and scams;
– Lack of risk management, manipulation of investor expectations;
– Lack of clear and progressive crypt legislation.

Related to user behavior

– Poor dApp UX and lack of Web3 integration with real life;
– Loss of user trust – again caused by a lack of transparency and regulatory clarity.

The strategy to survive the bear: product development, partnerships and security

The interviewed executives also shared their plans to weather the crypto winter and overcome the challenges:

– Creating and adding new features is still a top priority
– In second place are partnerships, which primarily attract B2B partners.
– Product safety is also among the top 3,
– Most projects are still dying: A downturn does not mean that the entire development strategy has to be abandoned.

Insights and recommendations for startups

Based on the survey findings, the BDC Consulting team formulated a list of recommendations for crypto startups from all niches facing liquidity deficit and user outflow. The list includes:

– Request feedback from the community (via forms and direct channels) to find out the reasons for leaving the community;
– Encourage users to join liquidity pools and engage external liquidity providers;
– Adjust tokenomics to ensure users benefit from keeping their tokens;
– Subject to external audits and conduct penetration tests; launch a bug bounty campaign;
– Engage users in a discussion and process all incoming feedback;
– Have a realistic roadmap and make sure it is followed.

BDC Consulting is a leading blockchain consulting and marketing agency with its own research department, publishing over 10 major market studies every year. The full version of the survey report includes dozens of in-depth quotes from blockchain executives, along with a detailed analysis of the challenges and solutions. Download the full report here.

Marat Gizatullin
BDC advice
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December 30, 2022 at 5:50 p.m

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