Quests have emerged as a powerful web3 marketing strategy and captured the attention of businesses and users alike.

Brands spend big bucks on third-party quest platforms to acquire and retain users while potential users flock to these platforms to participate in the quests. This arrangement creates a mutually beneficial setup where businesses achieve increased engagement and users acquire lucrative rewards.

But a closer look reveals a significant drawback associated with relying solely on third-party platforms for questing.

The Current State of Crypto Quests

Crypto quests leverage the psychology of rewards to encourage sustained engagement. 

Once users receive tangible rewards for their achievements, they associate those actions with positive outcomes. They also anticipate future rewards, especially if they’re periodic or tied to specific actions or milestones. Both factors become a powerful driver for users to return, as they seek to replicate these positive feelings. 

For a web3 brand, these benefits mean they can use quests to educate potential users about their product, acquire new users, and encourage them to habitually interact with their platform.

Currently, brands accomplish this through third-party questing platforms like Rabbit Hole, Zealy, QuestN, and Galxe. These platforms let brands tap into their existing user base that’s already primed for engagement.

Take Optimism, for instance. It partnered with Galxe to create learn-to-earn quests that introduced users to different products in their ecosystem. Users had to engage with short educational content about various Optimism projects and complete a quiz based on what they learned. 

They then had to perform various on-chain tasks and mint special Optimism quest NFTs. Holding the NFTs yielded immediate or future utility from the project.

Before the quest started, the number of active users on Optimism was around 150,000. But once the first season of the quest ended in January, the number of users using the platform had doubled and reached 380,000. At its peak, the quest contributed to about 74.4% of users on the platform, according to Dune. 

While organizing quests on third-party platforms is indeed effective for acquiring new users, the engagement often stops there.

Out of the 400,000 participants who finished all the Optimism quests, only 25,000 remained as consistent users, marking a retention rate of just 6%.

If we look at the metrics of PoolTogether, a top DeFi protocol that attracted a large number of users from the Optimism quests, we see a similar pattern. The below graph shows that users from the quests didn’t substantially contribute to the platform’s Total Value Locked (TVL).

The TVL on the platform remained relatively stable during the quest period. Moreover, the share of TVL by wallets holding Galxe credentials was higher before the quest started. Also, the retention was close to zero, according to Tide’s analysis. 

This is because many users are drawn to the immediate rewards offered by these quests. Once they’ve reaped the benefits, they move on to the next quest from a different platform. This cycle can result in an infinite cash burn for projects, leading to a poor return on ad spend (ROAS) or return on investment (ROI).

So, the crucial question for brands running quests is, how do they build deeper connections to ensure user retention? Let’s find out.

Embedded Quests for User Loyalty and Retention

After researching and analyzing existing crypto questing solutions, we realized that crypto quests currently lack two primary things:
1. Personalization for users

2. Company-oriented branding for better brand recall.

Solving these two problems can largely increase user loyalty and retention.

To do that, we designed Embedded Quests at Raleon. 

Unlike traditional quest setups on third-party platforms, Embedded Quests provide a tailored journey using chat-like engagement, that too within your platform. As compared to completing tasks through a third-party platform, this will offer a better experience of your platform to the users. 

For example, a decentralized exchange may integrate Embedded Quests. Now, when users visit a DEX for the first time, the quest can educate users about the platform and encourage them to perform basic tasks like token swaps. 

On the other hand, if an experienced user visits a DEX, the Embedded Quest can introduce them to the platform’s advanced features like adding liquidity, gas optimization, slippage, etc. By doing this, Embedded Quests personalize user interactions depending on an individual’s activities, experiences, and progress on the platform by analyzing their on-chain activities.

For example, ETH Barcelona used Embedded Quests. The user interface of the quest matches the brand’s colors and is personalized according to the vision — decentralization or reusable tech — that each attendee holds. 

Similarly, the Embedded Quest on Raleon is tailored toward marketers and growth leaders and prompts them to try our engagement and retention tools. 

In other words, you get to customize Embedded Quests to align with your platform’s overall look, feel, and messaging and reinforce your brand identity at every touchpoint. This creates a familiar and cohesive brand experience which builds trust and makes them more likely to stay loyal to the platform. 

Furthermore, the intrinsic design of Embedded Quests acts as a safeguard against reward farmers seeking to exploit the system. Their integration within the brand’s website means that these farmers can’t simply jump from one quest to the next, as is common with third-party platforms. 

As a result, the majority of visitors attracted to a brand’s website through Embedded Quests are those genuinely interested in what the platform has to offer, ensuring quality engagement. 

Beyond these advantages, Embedded Quests come equipped with robust analytics capabilities. They allow brands to monitor user actions in real-time, providing insights into how participants interact with quests. 

This data-driven approach enables brands to understand user behavior, map out their journey, assess the effectiveness of quests, and refine them based on actual user feedback.

The best part? You can use Embedded Quests to create and implement engagement and retention strategies for any type of dapps, games, and brands, thanks to Raleon’s no-code experience. 

Sign up to our platform and set up personalized quests that improve user experience and boost loyalty and retention.