The common notion around DeFi analytics is that it’s exclusively meant for seasoned crypto enthusiasts, traders, or developers. The crossover between marketers and DeFi analytics doesn’t even come as an afterthought.
But as DeFi is one of the most dominant sectors in web3, it offers vast data that provides deep insights into users’ behavioral patterns and trends. This can help projects understand market dynamics and tailor marketing strategies accordingly.
The kicker is that harnessing, evaluating, and leveraging this data is far more straightforward than most anticipate. So, in this article, we’ll look at what DeFi analytics is and how it helps you redefine your marketing strategies.
What is DeFi Analytics?
DeFi analytics refers to the practice of using DeFi data to make informed decisions when building strategies for trading, development, or marketing.
Specifically speaking about web3 growth, marketers can use DeFi analytics to dig into the various metrics of DeFi protocols to understand the performance of a DeFi project and discover ways to optimize marketing campaigns.
Here are more comprehensive insights into how marketers can use DeFi analytics:
- Monitoring performance: Marketers can use DeFi analytics tools to keep a close watch on their project’s performance. They can track metrics such as the number of users, the total value of assets locked in the platform (Total Value Locked or TVL), and other key indicators to gauge the project’s health.
- Identifying trends: Using DeFi analytics tools helps projects spot trends within the DeFi space and tailor marketing strategies to make the most of it.
For instance, if there’s a surge in interest for a particular token, DeFi protocols can promote liquidity pools or lending pools with the particular token to get more users to engage with their platform.
- Understanding user behavior: Analytics tools provide insights into how users interact with the DeFi platform. You can leverage them to learn which features are most popular, where users are coming from, and what actions they take while using the platform. This way, you can optimize the user experience and enhance engagement.
- Measuring ROI: With the data from DeFi analytics tools, you can determine whether the money spent on advertising or promotions is translating into increased user adoption or growth in the project’s value.
Popular DeFi Analytics Tools
DeFi analytics tools are essential instruments that provide insights into the decentralized finance ecosystem. They offer a deep dive into user behaviors, token metrics, and platform performances, enabling marketers to create campaigns that resonate with users. Here are some of the most commonly used analytics tools:
- Dune Analytics: Dune analytics empowers users to create customized dashboards and delve into on-chain data from various DeFi protocols by querying and extracting data from different blockchains
- DeFi Pulse: DeFi Pulse focuses on tracking the Total Value Locked (TVL) across various DeFi protocols and provides essential metrics to gauge the overall health of the DeFi ecosystem.
- DefiLlama: DeFiLlama is a data aggregator that allows users to track data about DeFi protocols and the chains they’re on.
- Nansen: Nansen specializes in Ethereum transaction analysis. It highlights influential addresses and provides valuable insights into market trends and the behavior of DeFi participants.
In summary, DeFi Analytics enables you to make data-driven decisions, comprehend user behavior, and refine your marketing strategies.
How You Can Use DeFi Analytics in Web3 Marketing
By understanding and interpreting DeFi data, you can gain a competitive advantage and ensure their marketing initiatives are both targeted and effective. Here are some types that
On-chain Net Worth
Obtaining data on a user’s on-chain net worth allows businesses to segment their audience into different user personas and create personalized marketing campaigns.
To understand this better, let’s look at how a protocol like Uniswap can hypothetically tailor marketing campaigns and messages for both high and low-net-worth users:
- High-net-worth users: These types of users might be more inclined towards long-term investments, diversification, or exploring emerging opportunities in the DeFi space.
So, Uniswap can create videos or webinars around advanced topics like placing limit orders, automatic rebalancing to help them maximize their returns. They can also send periodic reports on the most popular and emerging pools to encourage them to provide liquidity to these pools and earn more fees.
- Low-net-worth users: This user segment might be new to the crypto space and might be more risk-averse.
To cater to them, Uniswap can provide tools like impermanent loss calculators and educate them on the risks of staking their tokens. Additionally, they can host community polls, Q&A sessions, and more, to build trust and get them to use the platform frequently.
Incorporating trading frequency data into marketing strategies offers a nuanced understanding of user behavior and helps craft initiatives that drive engagement and promote sustained growth of DeFi platforms.
For example, users with high on-chain net worth who transact with a platform less frequently may be conservative and benefit from personalized support and in-depth content on sophisticated trading strategies, risk management, and portfolio diversification.
Users who interact frequently with a platform and have high on-chain net worth, on the other hand, are often well-versed in market dynamics and are looking to enhance their strategies.
So, you need to give them real-time market insights and advanced tools that will help them leverage opportunities like arbitrage and profit from it.
By understanding the assets a user holds, marketers can create personalized offers or promotions based on their preferences.
For instance, if a user holds a significant amount of governance tokens, it means they have a vested interest in the success of the project. So, DeFi protocols can give them early access to new features to create a sense of exclusivity, obtain feedback, and generate more buzz through word-of-mouth marketing.
But if they own NFTs, they’re more likely interested in collecting physical or digital assets that have aesthetic and speculative value, and unlock special experiences for them.
In such cases, they can create a loyalty program or rewards system that distributes exclusive NFTs having unique features or utility as incentives for participating in the DeFi ecosystem like Ether.fi does.
On-Chain and Off-Chain Activity
The DeFi user journey is a unique blend of both on-chain and off-chain activities. On-chain activities refer to the transactions and interactions users complete on the blockchain, such as trading on a decentralized exchange, staking tokens, or participating in a DAO’s governance vote.
Off-chain activities, on the other hand, encompass actions outside the blockchain, like engaging in community discussions on forums, attending webinars, or liking and commenting on a social media post.
Getting a complete picture of this user journey is important as it helps you understand why they make certain decisions, what influences them, and how they perceive your product or service. Additionally, [-poiu[-po can:
- Segment users effectively: By analyzing on-chain transaction data and monitoring off-chain discussions the user engages with on social media, it’s possible to identify the users’ interests and tailor marketing campaigns accordingly.
For example, a user who frequently interacts with centralized and decentralized exchanges and engages with content with trading strategies or advice is primarily interested in trading and optimizing their returns.
Hypothetically, if a lending protocol like Compound wanted to attract and retain this audience segment, they could create educational content around how traders can leverage their position i.e. borrow funds from a platform like Compound to amplify potential returns on an asset.
- Optimize campaign timing: Let’s say the on-chain data of a lending platform like Aave shows that users borrow heavily from the platform at the start of the month and participate in discussions related to borrowing crypto and earning interest against it.
To ensure maximum engagement from this user segment, Aave can launch promotional campaigns including special interest rate offers, reduced fees, or bonus rewards for borrowing during this period.
- Identify partnership opportunities: Utilizing on-chain and off-chain data helps platforms identify partnership opportunities in the DeFi space.
For example, when Clipper, a decentralized exchange discovered that their users held NFTs and frequently interacted with Galley, an NFT lending platform, they partnered with the project to set up a marketing campaign.
Whenever a user holding DeFi tokens visited Galley’s website, they would be greeted with a personalized Action Prompt encouraging them to check out Clipper, a decentralized exchange. And whenever a user holding an NFT visited Clipper, they would see a personalized pop-up asking them to check out Galley and its offerings.
This way, both Galley and Clipper could tap into each other’s audience base and acquire new users.
In essence, it’s important to capture the complete user journey to craft strategies that align with users’ needs and preferences. However, the tools mentioned above only track on-chain activities and don’t give any insight into off-chain activities like social media mentions and discussions.
Even if these tools are used in conjunction with web2 analytics tools, constructing a journey map will be challenging as it’s difficult to accurately attribute on-chain activities to off-chain actions. This is where Raleon comes in.
Instead of navigating a maze of disparate tools, aggregating data, and obtaining insights from it, you can access both on-chain and off-chain data with Raleon.
What’s more, Raleon’s attribution engine can precisely identify the exact actions that led to the user connecting their wallet and completing a transaction. It accomplishes this using industry-standard UTM links similar to the ones that Google ad tracking uses.
This maintains user privacy and allows Raleon to begin monitoring user activities like joining a community and monitoring on-chain conversions once the user clicks a link.
Token Distribution Data
Token distribution offers a comprehensive view of the varied participants within a crypto project and allows you to gain insights into the distinct interests and tendencies of each group.
For instance, while large holders might be keenly interested in long-term project developments, governance decisions, or institutional partnerships, smaller holders could be more attuned to immediate utility, platform adoption, or short-term milestones. Gaining this understanding is crucial for crafting targeted strategies.
Total Value Locked (TVL)
TVL represents the amount of assets locked in a particular protocol or platform.
By understanding and leveraging this metric, you can craft strategies that resonate with current users, attract new ones, and position the platform effectively in the competitive DeFi landscape. Here’s how:
- A rising TVL suggests that users trust the platform with their assets, signaling strong adoption. And you can leverage this trust factor in campaigns to highlight your platform’s reliability.
Conversely, a sudden drop in TVL might indicate user dissatisfaction or a shift to competing platforms. In such cases, you can gather feedback from the community and communicate the measures you’re taking to fix the issue through your campaigns to regain trust.
- By analyzing TVL trends over time, projects can identify peak periods of user activity or influx of assets. This can guide the timing of promotional campaigns or platform updates.
- TVL milestones give an opportunity to organize events or airdrops, which in turn can further improve community engagement.
Use Raleon for DeFi Analytics-Powered Web3 Marketing
Leveraging DeFi data is crucial as it helps you understand the buyer’s journey and offers essential insights that help fine-tune marketing efforts. While most web3 analytics tools help with on-chain data, they fall short when it comes to reading off-chain data.
However, Raleon bridges this gap and offers both on-chain and off-chain data that gives you detailed insights on users. This allows you to create user personas and make data-driven decisions. To learn more about how Raleon can help with DeFi analytics, check out our tool.