The cryptocurrency market is dynamic and experiences highs and lows, with the bear market being a period of extreme lows. At the Cardano Summit 2023, prominent contributors in the blockchain space shared insights on how community involvement contributes to operational resilience and the development of a solid blockchain project even in a bear market.
To start with, the community is regarded as the backbone of operational resilience. Andreas Pletscher from Cardano emphasized the role of the community in achieving operational resilience. He pointed out that the current bear market acts as a natural cleansing process, reducing numbers but enhancing the quality of community members. “The ones that remain are the ones significantly contributing to the success and the evolution,” he said.
Sunny Lu from Vechain highlighted that he has observed a shift towards a more mature market, with increased attendance at events like Token 2049. According to Sunny, the bear market is an opportunity for projects to focus on building and engaging in meaningful discussions with their communities.
One of the ways a project gives back to the community is through incentives. Andreas Pletscher added that incentivizing the community involves more than just providing funds. Cardano, for instance, focuses on quality contributions by organizing global meetups where the community needs to contribute before being incentivized. This approach ensures that incentives are tied to meaningful contributions.
Connor O’Shea from Binance highlighted the unique advantage of decentralized autonomous organizations (DAOs) for community engagement, where users can actively participate and provide valuable input. This leads to a deeper connection between the project and its community, ultimately influencing product development positively.
Further, a community is not just users but ambassadors of the brand. Dr. Bernhard Kronfellner of BCG stressed the community’s role as ambassadors and, similar to employees, should be consulted on certain aspects to ensure alignment with the project’s goals. However, project leaders should take on making strategic decisions.
One of the determinants of the resilience of a blockchain project is its financial health, as Dr. Bernhard said. Moreover, he emphasized the need to balance between applying decentralized principles and engaging with traditional partners to gain attention and trust within the broader industry.
Adapting to Changing Dynamics
Looking forward, collaboration amongst blockchain projects and adapting to regulatory requirements are of importance. Sunny Lu sees the possibility of the consolidation of layer 1s in the next five years. While acknowledging consolidation as one possibility, he envisioned a collaborative future where different layer 1s work together towards mass adoption. Alongside this, the potential for mass adoption for Connor lies in capturing unique use cases that can drive significant transaction volumes.
However, most layer 1s face a lack of a unique selling proposition (USP), economic viability, and a strong community. As the upcoming bull market could potentially bring additional users, projects must be prepared with a compelling USP and effective marketing strategies, Dr. Bernhard analyzed.
Also, he added that the industry is moving toward more traditional processes and regulations, making it important to strike a balance between crypto-native identity and traditional regulatory requirements.