The Pathway to Data
Its been a turbulent time in cryptoland this year with major hacks happening every month coupled with big events like the Luna/UST stablecoin depeg this week. Regardless, Step has been continuing to build throughout and if you check in to our Discord or Twitter you’ll always see new updates every few days. Come checkout some of the Feature Spotlights we have been doing recently on lesser known parts of the App as it will frame a lot of the discussion below.
Step is well placed to grow during a bear market. We have been constantly hiring the last few months with most recently this week placing a new job ad for an Ambassador Program Manager which, as the name suggests is a new initiative to engage new users around the world in the Solana ecosystem, but perhaps more on that at a later time. On the tokenomics side we are well placed with the lowest FDV of any Solana project, zero farm emissions for the last 9 months and Reward options being the only way circ supply increases.
The token isn’t immune to market forces though, the markets will do its thing but that’s irrelevant to what we are doing at Step- our job is just continue to build the best product we can and be the one page that is indispensable to your crypto usage, if we do that then value will come.
Monetisation in DeFi
All the necessary parts of a DeFi ecosystem are mature on Solana now- 8 AMMs, 4 order book Dexes, 5 Lenders, 2 Options platforms, Validator liquid staking services, yield farms, infrastructure providers and the largest NFT marketplace in the world, the list goes on. This is far more than can be said for competing non-ETH L1s which have nowhere near the number and user base of DeFi and NFT platforms, maybe that will change and we will be keeping an eye on it for future expansion perhaps but for now our focus is keeping up with what’s going on in Solana.
Step has integrated all of this, almost every major protocol on Solana is now part of the Step dashboard and you can see your portfolio across the entire ecosystem. There are a few gaps which we are tracking but for the most part we estimate about 95% of the DAUs/TVL of solana protocols is covered on Step now.
Now the question is, where to from here for our core product- the portfolio dashboard?
Its important to show people what they have, this has made the Step Dashboard an indispensable part of the Solana ecosystem and part of most users daily workflows. Our next focus is showing you what you don’t have. You’ll note the recent upgrades to the Opportunities page to support showing you futures funding rates, lending rates and pool APYs. This is important for new users who may never have known about those platforms in the first place and now they’re introduce to the Opportunities elsewhere in the ecosystem.
But the protocol needs to make money somewhere and the obvious part is monetising these opportunities by ‘Stepping in’ and ‘Stepping out’ of some of the opps displayed on that page in one click (for a fee). That would be an example of a DeFi solution to monetising our existing product and something whereby we would earn a cut every time someone does that clicking of a button which for convenience and UX is something people would be willing to pay for. But there’s only so far you can take these DeFi solutions to monetisation.
In the above example Step becomes dependant on transaction revenues and that is indeed closely aligned to bringing more users to Step which = more ppl clicking button = more revenues over time, it is however very dependant on external factors. Things like the DeFI platforms themselves, will those opportunities be there, is DeFi something people even want to do anymore, what’s the hottest thing going around etc. Very cyclical and not within our control. We have looked at many other on-chain monetisation and value adds for Step- concentrated liquidity pool vaults, collateralised stablecoins, token locking etc but all fall into the same bucket of not being as closely aligned to our core product, time intensive, custodial risk and so on.
Which begs the question is there a better way to utilise our unique moat of the Dashboard everyone uses rather than just transactional additions here and there and the answer we think is clearly in Data.
Data is the new Gold (or is that bitcoin?)
We have an excellent coverage of the Solana ecosystem, useful tools to save people time and money and have a steady and active user base who use Step everyday. Our real secret sauce for all of this is the custom integrations we have with everyone in the ecosystem and the data that we display people everyday. Right now it is served in a live state- that is to say when you connect your wallet we get the most recent and current state of your wallet, showing you what you have. If we were to index this data coming from all these protocols- APYs, TVLs, LPs, Wallets with X or Y LP, whale movements or any other things we get from the public blockchain this becomes a historical record which is highly valuable that people already pay a lot of money for.
This was an exert from our internal wiki on the subject:
Levels of On-chain Data insights
Level 1: Blockchain Level Statistics
Often Dashboards and charts showing: txs per epoch, blocktime latency, active addresses, active validators, tx fees paid etc. Glassnode a good example of this
Level 2: Blockchain movements insights
These are often charts and tables for: popular contracts inflows and outflows, holders lists, whale address watching (balance changes). Nansen a good example of this.
Level 3: Protocol specific insights
Information related to individual protocols statistics: apys of a yield farm, number of active LPs, inflows/outflows of TVL per named contract, rewards claiming over time period etc. Step would be best here
Level 3 insights is the area where we would do best in and have a unique moat. This is very exciting as monetising this data is more closely aligned with our core product, not as dependant on the vagaries of these DeFi protocols, is less transactional and has none of the custodial risks with deploying new onchain contracts to do stuff.
Some of the existing best in class Big Data projects in crypto like Nansen, Glassnode, Dune etc all have a unique and interesting spin on things but given our position as a user facing Dashboard with these integrations everywhere Step would have much more fine grained insights to offer than what they currently provide.
There are a few ways to monetise this:
- Familiar and easy to setup
- Revenue goes to Treasury
- Perhaps a bit of work required to avoid web2 era usernames and passwords and keep it wallet only
- UX is familiar
Stake for Access:
- Potential good use case of web3 tech checking for a staked position
- People could simply unstake after they get what they need so would need a locking mechanic
- There is no protocol revenue going to Treasury
- More stakers dilute existing stakers APYs
- Easy UX (check is user has xSTEP, grant access)
One off Fees
- Still transactional and highly variable
- Protocol Revenue go to treasury
- Potentially worse UX
I think overall subscriptions while kinda boring are the best method here with any protocol revenue going to treasury to buy STEP and send to xSTEP staking contract.
So from our perspective this all seems the obvious route to take. We have an existing product with a unique moat with tons of custom integrations with the entire ecosystem and providing insights into that ecosystem is a natural ‘Next Step’ (pun intended :D ) for us to do.
We hope this sheds some light on some of the strategy and thinking around our Big Data strategy which builds upon the great base we already have with our Portfolio Dashboard. We will of course be continuing to stay ahead in the Portfolio dash space as that is critical to ensuring the data we provide is relevant and insightful and something people would actually be interested in and pay for. As always please come join us in Discord if you have any thoughts or ideas on this and we are happy to discuss!
The fruits of our work should be starting to show this quarter as we continue to build toward this goal, glad to have you along for the ride!