If you thought teaching your grandparents how to use the iPad was hard, try to talk them through setting up a web3 wallet. Across the web3 space, from brands and their customers to fan communities, onboarding new users is one of the biggest challenges facing any NFT project.
Most consumers still don’t understand what an NFT is, and likely haven’t heard of web3. And of those who have, only a small number of them understand the value that web3 unlocks. While more than 1 in 10 Americans have owned cryptocurrency at some point, many still think of it as a get-rich-quick scheme, or they know a guy who spent $150 in transaction fees to buy a .jpeg in 2020.
Other hurdles to onboarding include the poor UX of setting up your own wallet and keeping it secure, environmental concerns, costs, a lack of understanding, and consumers not knowing about the potential utility of NFTs. All of which we’ll dive into below.
But onboarding your customers - and your own team - onto web3 doesn’t have to be an obstacle. With Taco, you can clear all four of the big onboarding hurdles and just get down to business right away. You don’t have to teach your team a new language for them to create and share new NFTs. And your customers don’t need to set up anything to receive them.
From streamlining the signup process to addressing misconceptions, let’s dive into the biggest problems in web3 onboarding and see how you can overcome them.
State of onboarding
In a study of the web3 music sector, Water and Music found that a large audience on Web 2.0 didn’t translate to instant success in web3, and the key issue was onboarding. Where NFT drops might have been able to turn a profit on hype and speculation alone, we now have countless examples of highly-promoted projects either flopping or fading away quickly into obscurity.
Many of these make the mistake of thinking that if they build it, people will come. Just because you have loyal customers, even a rabid fanbase, that doesn’t mean your web3 loyalty program is going to be an instant hit.
Confusion and lack of experience with web3 wallets were found to be one of the main obstacles in that process. But it’s just one of four issues you’ll have to think about, the others being environmental concerns, associated costs, and perceived utility. Let’s cover them one by one and see what you can do to make your web3 loyalty launch a success.
Addressing environmental concerns
Last year the digital artist Kyle McDonald estimated that Ethereum was using as much energy as three Facebooks, with less than 100 million wallets in use compared to Facebook’s userbase of nearly 3 billion. It’s a problem the Ethereum Foundation is tackling by moving to a proof-of-stake system as early as this year, which they estimate will use 99.95% less energy than today.
But there’s a misconception that the environmental impact is down to individual users and their activities, with claims like “minting one NFT emits X amount of Co2”. As McDonald explains in his paper, Ethereum uses a fixed amount of energy regardless of activity.
“When you turn on your home router, it uses a fixed amount of energy whether you are streaming high-resolution movies or just sending emails. Ethereum also uses a fixed amount of energy regardless of how many transactions are on the network…”
- Kyle McDonald, Ethereum Emissions
With Taco, you get to choose which blockchain your NFTs are minted on. Proof-of-stake chains like Solana, Polygon, and Tezos - whose entire system emits as much carbon as just 17 average people - all have different benefits and costs, but for you and your customers it’s all happening on the same user-friendly interface.
With this ease and optionality, eco-conscious brands and the teams driving them can onboard customers to web3 with no anxiety about the impact. And with a growing sector of “impact DAOs” like KlimaDAO focused on environmental activism, there are plenty of opportunities for brands to go further with partnerships that further their environmental and social goals in a way that only web3 allows.
Costs for you and your customers
So much of the media hype around NFTs was due to their sales for incredible prices at auction. And with so many market speculators looking for a good investment in the pandemic, it’s no wonder that NFTs were seen as a pricey asset.
But the high cost of many NFTs and their associated transaction fees is a major obstacle to web3’s adoption. It puts off customers, and it’s bad for sellers: many artists who experimented with NFTs in the last two years found those “production costs” devouring their profits. And with those transaction fees fluctuating by the hour, it’s hard to fathom the cost of even a small NFT project on Ethereum.
High ETH costs and high gas fees are signs of a congested network, and with Ethereum’s upcoming move to proof-of-stake, we should see those costs come crashing down.
In the meantime, Taco gives you the option to mint on cost-efficient “Layer 2” blockchains, and we package the whole service up in a monthly SaaS fee, settled in the good old USD your accounts team is used to.
With our cost-efficient smart contracts - deployed at off-peak times - the cost of launching an NFT project is much lower, with less gas being wasted.
Educating your customers and your team
Water and Music’s study found that over 33% of respondents just found web3 confusing, and that was the biggest obstacle to them ever taking part in it. They don’t understand it, and they don’t understand why they should spend valuable time learning about it.
If your customers are totally new to web3, think about how you’re going to communicate the essential concepts in language that’s relevant, familiar, and valuable to them. Include that messaging in your marketing plan for the loyalty program, whether that’s a “web3 101” blog post or a live chat with Q+A.
With Taco, the amount of education you’ll have to do is minimal. Your customer can set up a web3 wallet without even knowing what that is. All they need to claim an NFT is their email address, and they can use that in your online store and our customer wallet app to enjoy all the power of web3 no matter their current level of knowledge.
And for you, our team handles everything that web3. You don’t need to spend weeks upskilling for that venture, Taco takes care of the implementation. All you need to focus on is what you know already: who your customers are, and how you’re going to provide value to them.
Demonstrating the real utility of your NFTs
One of the interesting things about “art NFTs” is that the content has to be publicly accessible for it to be privately ownable on-chain. For web3 insiders this is a feature, not a bug.
But for a lot of people, it’s not a clear value proposition. Even for passionate fans in the Water and Music study, who want to support the artists they like, respondents said things like “I have no desire to possess what is essentially a virtual, purposeless baseball card for my favorite artist(s) or song(s)”.
Luckily for them, utility NFTs are Taco’s specialty, and they’ll be the cornerstone of a successful web3 loyalty program.
Utility NFTs are flexible enough that you can plug them into your existing benefits, like discounts or vouchers for your partner companies. With the improved analytics Taco offers over traditional Web 2.0 platforms, NFTs can be a great way to add value to your existing services without launching a whole new initiative.
Unlockable, token-gated products and access to in-person events are just two of the most immediate and tangible benefits an NFT could provide. Utility NFTs are a whole world unto themselves, but you don’t need to educate customers on the benefits of exclusive access.
Taco makes it easy
Onboarding Web 2.0 followers into web3 is a major pain point. As Water and Music found, even big stars like Madonna and Lil Yachty can’t turn their huge followings into successes without a solid onboarding.
Taco solves all four of these major hurdles for new users: education and UX issues, environmental concerns around proof-of-work, questions around utility, and costs of entry.
For brands looking to launch their first web3 effort, Taco is the partner who’ll make onboarding a non-issue, plugging right into the systems and processes you and your customers use every day. And once you and your best customers have settled into web3, there’s no limit to what you can do from there.