This week on Tapx Talks we were joined by a great group of people from various projects to talk about Building in a Bear Market.
Are we in a bear market now? Absolutely yes. Currently, Bitcoin is down over 50% from early 2022 levels and over 68% from its all-time high in November 2021.
Not only is BTC down but crypto trading volume in general tumbled in June to the lowest since 2020, with spot trading volumes across all centralized coins down by 27.5%.
Trades on Uniswap on July 22 are at the same level as they were in November 2020.
This in turn dried up our favourite WAGMI and GM tweets and the general web3 support decreased.
However, many companies are still building to ensure that the web3 promise of a decentralized and free era continues.
We invited some of these projects to discuss the challenges and opportunities of Building in a Bear Market.
Let’s start with a short introduction of the projects that joined the conversation:
Mixin is a free, lightning fast & decentralized network for transferring digital assets. They build open source software that prioritizes security, privacy and decentralization.
The Mixin ecosystem consists of two products. Their Mixin Network allows free, lightning-fast and decentralized transferring of digital assets. Mixin Messenger is an open source cryptocurrency wallet with Signal messaging.
IDEAS is a fully decentralized Investing/Fundraising platform for all kinds of projects.
Their platform allows you to upload your idea and present it to investors worldwide.
IDEAS allows people to fund their projects in a decentralized, open, and borderless way. Their token IDEAS (IDS) will help achieve this goal.
Their platform is split into two sections, first is an investment platform where users can come and post their ideas and startups without any restrictions from 3rd parties. The other is a recruitment platform to help businesses owners recruit freelancers from all over the world to apply and bid for jobs.
The Shyft Network is a public protocol designed to validate data and embed trust, compliance directly into the blockchain.
By facilitating the transfer of verifiable data between centralized and decentralized ecosystems, Shyft Network delivers meaningful user information that institutions can utilize to secure cryptocurrency while maintaining privacy.
Hundo is the world’s first on-chain learn and earn campus for gen Z.
Their mission is to bridge the education gap between traditional education and the needs of the business.
Hundo’s learn and earn system works as an online campus where you earn incentives as you learn. The more assignments and courses you complete, the more you’ll be rewarded.
They are going to replace CVs and resumes with an on-chain record of your achievements.
Now, here’s some bear market wisdom from our speakers.
What is special about this bear market compared to the previous ones?
Web3 has overcome a few bear markets before. But this one is different, our speakers say. Back in 2017–2018, during the last bear market, the userbase wasn’t as big as we have now.
Juan of Shyft highlights that we have a lot more adoption today compared to the previous cycle. We’re no longer just talking in a closed circuit, we’re now seeing banks and other companies actually looking into the web3 space.
The narrative is different. Now people are treating current market conditions as normal: this happens, it’s a cycle.
What I see in this one difference is that we have a larger adoption and a better narrative. So I’m hoping that that’s what makes this one a little bit more bearable.
Today we have regulation hitting of course, which is also what makes it very different, not necessarily for the better. But it also has its pros. We will have a regulated industry that gives you sort of guidance and removes a lot of grey area that was around in 2017 and 2018.
Nicole from Mixin network states that at Mixin, they are taking advantage of the bear market by dedicating most of their time to the construction of the underlying technology and the continuous improvement of their products.
Mixin Messenger, the first app developed by the Mixin team, was launched in December 2017, during the last bear market cycle. And the product was a big success for the company:
In the past 4 years, the team has contributed nearly 500,000 lines of code and we acquired millions of users and the total eyesight and network have been exceeded 2 billion U.S. dollars last year. And now we are working together with ecosystem partners and also other projects as well and hoping that Mixin will continue to expand at a fast pace.
This is unlike any other sort of crypto bear market that we’ve seen before. The first one was more existential. The infrastructure wasn’t there. It was a crazy time and not for the faint-hearted. And now, there’s more optimism about the technology, many projects are building, and a lot of people are joining the space.
What are the challenges & opportunities of building in a bear market?
Juan of Shyft says that focusing on technology and its explosiveness attracts people to it.
Now that the narrative is no longer wen Moon, you can drive a narrative that is true to your product true to your technology, and to your mission.
Camara from Shyft believes that one of the challenges for projects during the bear market is to keep people engaged, involved, and interested in what we’re building and how we’re building it.
I honestly think that a market like this allows for a better breath and understanding of who’s interested in your project because you see who sticks around and how to keep them engaged in this market. We’ll show how to keep those most interested parties engaged when we return to a bull market.
Scott from Hundo agreed that the bear market allows projects to put more focus on the user experience rather than caring about the prices and hype.
There’s a risk when you’re in a bull market, he says. There’s a lot of money floating around in space. You can be sucked into the hype and the marketing, and that creates a false sense of success.
The bear market is the right time for Hundo to be building their product because it’s a great chance to learn, engage, to build community, and trust says Scott.
It’s a perfect time for educating people in terms of the fundamentals of web3 and shifting the narrative away from pump and dump schemes and focusing on the skill sets that you’re going to need to learn in order to be able to function in the future.
Irfon, co-founder of DOVU, Amplify, and Tapx says that the bear market is the time when many projects decide whether what they are building has a real value, or is just a froth and fluff.
It’s important to be honest with yourself, he adds, and be quick to pivot when the data that you’re getting is telling your project was actually built in a frothy bull market and now you need to focus on something a bit more real.
For me, the bull market and the bear market is about price and not about the existential crisis of web 3 and blockchain and tokenization. Therefore we can ride through that — Irfon.
Now building a business is a little bit easier, than during the previous cycle. Because now we have an experience and lessons learned from the past. We know more about people, our communities, and what they want/need.
With web3, one of the issues that we’ve seen in the past year was some lack of understanding of the general audience, not those that we’re building, but the general audience. Lack of understanding exactly what is meant by web3 and exactly how it impacts me as a user or as an individual who holds data or owns it.
Now we have an extraordinary opportunity to educate and to help build that understanding of what this is and what it is capable of doing. We have a lot more listeners today than we had in 2017, and a lot less skepticism — Juan from Shyft.
In the last bear market, we didn’t have those opportunities we have now, says Irfon Watkins.
We didn’t have the opportunity to talk on Twitter Spaces, we didn’t have all these accelerator programmes that founders can jump on. There’s a plethora of education out there now. That’s why it’s a very exciting time to be getting involved in this space.
What is really essential and challenging during the bear market is to find a group of like-minded founders and builders. Those people that are going through what you’re going through, of whom you can speak openly and frankly and share your pain with.
We believe that Tapx Talks is one of the places where web3 projects can connect, collaborate, and support each other along the way, regardless of the market conditions.
Nicole of Mixin says that the bear market is the perfect time to focus more on not just developing a product, but also on building a community and audience.
It’s important to learn how we can keep those people engaged and interested in what we do. And then we can use this knowledge in the next run to keep those individuals engaged as well as bring in new ones who are interested in the project and not just on the pump.
One of the ways to do that is by creating more real-world applications where the price of Bitcoin and other coins is not so essential.
For example, at Dovu, they are tokenising carbon in the soil to enable farmers to sell carbon. The token is linked to the price of a tonne of carbon and the DOV Token itself is actually a governance and reputational management token.
At Amplify, they’re putting in ticket revenue from live music gigs into a DeFi system and then streaming that out into the wallet holders of the musicians so that they can earn money long after the gig is finished.
There’s also a really good project in Argentina where they’re tokenising soya and wheat and building stable coins around those types of commodities.
This bear market has shown us that true DeFi works and real-world use cases are what we need more of. Web3 is just the tech backbone that delivers the product that you’re doing, and therefore the bear market doesn’t really matter.
One (or more) practical tips for those building in the bear market
- Stay focused. Always be aware of what’s going on in the market and be able to make decisions quickly — Scott from Hundo.
- This is the opportunity to really build communities and products. Keep moving. This is our time to shine and I think you have to look at it as an opportunity more than anything and not as something negative — Camara from Shyft.
- You have a limited budget. You have a limited source of capital so make every cent count. Don’t just freeze and collapse everything and wait for the wait to pass. If you have to hire — hire. There’s talent everywhere, especially in web3. So be very focused on execution. Focus on your timelines and your road map. Listen to your users and be very efficient with the use of your capital.
At the end of the day when the bull comes back in and he market goes up, you’re going to be able to relax in a much better and more stable position — Juan from Shyft.
- Powerful technology and secure, easy-to-use products are the foundation of web3. The bear market is the time to concentrate on things that we believe in.
The great thing is that we can actively participate and witness history being made — Nicole from Mixin.
- Get more real and ask yourself some basic fundamental questions: Why are we doing this? Is it real? Does it add real value or is it just noise? And, of course, find a group of like-minded people — Irfon from DOVU, Tapx, and Amplify.
- Focus on your successes and support other people in this journey. Be collaborative and build partnerships — Luke Judge, Tapx.