On DeFi Superapps and Their Bottlenecks
This post originally appeared as a thread on X.
DeFi superapps enable users to easily trade & earn using onchain protocols. We’ve seen a bunch of these projects over the past few months.
It seems like low-hanging fruit. The infra is better than it’s ever been. Embedded wallets make self-custody easy. Tx fees are cheap, etc. etc.
But I’m not sure any of those were really the bottlenecks.
In my opinion, the core question is: who is the wedge audience? Is it:
a) New crypto users
b) Moderately onchain cryptonatives
c) DeFi “degens”
Understanding the blockers for each is critical. The more the blockers between segments overlap, the more winning one group provides a wedge into the next.
New crypto users
It’s possible for a DeFi app to go mainstream, especially if the experience feels on par with centralized services. Coinbase has hit #1 in the app store; if a DeFi app replicates the experience, there’s no reason to believe it can’t achieve similar success.
So part of the challenge is UI, but it’s not the only thing.
Other key things to solve for include:
– Distribution
– Frictionless onboarding
– Clear value proposition (eg yield)
Moderately onchain cryptonatives
Think: Coinbase users who interact occasionally with onchain protocols. They might split their staking between Coinbase and onchain infra. Some fraction might use lending protocols.
Key things to solve are:
– Safety
– Ease of access / management
Double clicking on ease: the more that price volatility impacts the activity, the more it matters.
Onchain staking is largely set-and-forget (because there isn’t a volatility component), whereas one might prefer to check lending positions more frequently.
DeFi degens
Think: folks who are looping their money 10x, have dozens of wallets set up to farm, and may have built proprietary trading setups.
Key things to solve are:
– Yield optimization
– Holistic portfolio management
– Customization / third-party integrations
My TLDR is that there isn’t one right user segment to start with. They can all be huge opportunities. DeFi degens might offer really high value-per-user. Winning the masses might have lower ARPU but make up for it in number of users.
What matters is which blockers the team feels they can best solve. Luckily, the infra is now good enough for teams to go after any of these segments.
The key is picking one and not trying to be a catch-all at the outset.
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