Fun is an elusive concept we rarely consider in crypto. What often passes for “fun” is, in reality, a relentless PvP battleground—where survival depends on staying perpetually online, endlessly hunting for alpha in the unforgiving trenches. Think of it as the world's most exhausting MMORPG, except the final boss is sleep deprivation and the loot is generational wealth. But I’d argue that actual fun, not speculation itself, will be the linchpin of crypto’s mainstream adoption.
Well, what about memecoins?
For the most part, memecoins serve as inefficient call options on attention markets (think $LUIGI, $CHILLGUY & $PNUT, amongst thousands of others). While it may be lucrative for the 1% of traders who understand the intricacies of these markets, it’s zero sum for those who don’t.
Consider $TRUMP, for example. Undoubtedly the apex moment of memecoins, having brought over 1 million new users onchain via Moonshot. Yet, despite its initial success, Moonshot now sees less than 1% of its peak daily trading volume, with only a fraction of its original user base remaining—most of whom have not engaged in any other onchain activities. Meanwhile, $TRUMP has experienced an ~80% drawdown from its ATH.
To that extent, when analyzing PvP marketplaces like pump.fun, Virtuals, Flaunch, etc. it becomes clear that these platforms primarily generate isolated, high-intensity events designed for the most online and engaged traders.
Myself included- I can’t tell you how many times I’ve top blasted a new ticker after it was shared in multiple TG groups. The sheer rush of adrenaline as I’m obsessively tracking the chart while trying to not jeet my position too early. And I know this is an experience all too familiar for many others. But will I play again? Even if I continuously lose? 110% yes.
As such, these platforms will certainly continue to have their place in crypto amongst the “competitive gamblers,” but we’re already seeing a significant fragmentation in attention and therefore liquidity, causing fewer projects to ever reach escape velocity.
Even the tickers that “make it,” are usually operated by sophisticated actors who have industrialized the process, from bundling & KoLs to market makers & exchange listings.
In other words, it’s unlikely memecoins will be the gateway to crypto for the majority as it does not create a continuously engaging experience and offers excruciatingly low RTP (return$-to-player) for uninformed traders. More specifically, memecoins lack most of the core mechanics of “The Gambling Engagement Flywheel”- The infamous loop that keeps users entertained, spending, and returning- used by nearly all gambling and even gaming companies.
Further, looking back at previous “breakout” consumer crypto initiatives:
GameFi: Stepn, Zed Run, Topshot, Sorare, Gala..
NFT: BAYC, Nike’s RTFKT, Pixelmon, Mekaverse..
SocialFi: Friend.tech, BitClout, Pearpop..
And so forth.
While these teams may offer a more comprehensive experience than memecoins alone, every project shares a fundamental flaw: none have achieved “organic” success as a publisher (i.e., a platform that thrives by commanding user attention). And soaring token prices only created a temporary illusion of PMF.
Unfortunately, the token itself was almost always the product, not a force multiplier of the publisher. This invariably led to a vicious cycle where insiders, KoLs and sophisticated actors farmed every platform and its users to the maxima until the project died out.
Conversely, I’d argue consumer apps must develop intrinsic strength and viability first, where the token later becomes a force multiplier for the publisher.
Since gambling is the most adjacent area to consumer crypto, let’s take a look at the most popular, traditional gambling mediums- why are they so successful?
Well…
Whether it’s slots at a Casino, betting on your favorite player while watching football, or rubbing a scratcher off on a Sunday, the traditional means of speculation provides an avenue of seamless gamification. One that does not require a large buy-in, steep learning curve, or exuberant time/effort commitment, yet offers a material sense of excitement, control and/or means of escape for the individual. So the ability to essentially have “laid back fun" via paid entertainment has strong PMF for the masses.
And it makes sense. Most gamblers are folks with full time jobs, college students etc. and they’re looking for a low-effort escape or means of excitement through the most deeply engaging medium possible. Many studies have been done on how to categorize the gambling market, here’s what the average segmentation and distribution looks like:
Casual/Recreational: These gamblers view gambling as entertainment, akin to going to a movie or theme park. They set a budget and accept losses as the cost of fun. (50-80% of gamblers).
Escape/Action Seekers: This group enjoys gambling both for the thrill and the potential financial upside. They may not be primarily profit-driven but do care about winning. (10–30% of gamblers).
Competitive: These individuals gamble primarily to win and are highly competitive. They often engage in skill-based gambling and hunt for the slightest edge wherever possible. (1-10% of gamblers).
And of course the distribution can change depending on game type, demographic, culture etc. But this segmentation/distribution is widely accepted by the most acclaimed studies on the topic such as The Pathways Model (Blaszczynski & Nower, 2002), Gambling Motivation Scale (Gupta & Derevensky, 2011) and various market segmentation approaches since 2015.
To date, consumer crypto has only ever catered to the tail end of “competitive gamblers,” confining us to an inherently small, high-churn market.
But..
Crypto is at an inflection point where, for the first time ever, we can build apps that serve the vast majority. But how exactly?
We now have all the necessary tools to develop transformative apps. Specifically, 3 fundamental pillars underpin the creation of breakthrough crypto apps:
1) Form Factor
In 2024, mobile gaming continued to lead the gaming industry in revenue, generating approximately $92.6 billion, which accounts for 49% of the global gaming market. Moreover, the preference for mobile gambling has been steadily increasing. In 2020, around 50% of sports wagers were placed through mobile devices, which rose to 75% by 2024. As such, the success of recent breakouts like Moonshot, Yapster, and Vector only reaffirm one thing- mobile-first is the winning form factor. With embedded wallets, Apple Pay onramps, and seamless integrations, we can finally create an onboarding experience fit for the mainstream. And for the first time, regulatory barriers and App Store policies are less of an obstacle than ever before.
2) Casual-Friendly Economy
To date, consumer crypto models have been predicated on being very early, providing outsized advantage to whales and/or extreme information asymmetry. Effectively turning any non sophisticated player into an NPC.
Shifting away from an overly PvP-driven economy requires integrating key mechanics from the gambling flywheel to make crypto more appealing to the masses. These include:
Possibly the most important aspect is RTP, or the percentage of total wagered money a game is programmed to pay back to players over time. As we've learned the hard way in crypto, the gambler’s fallacy and flashy Twitter PnLs can only sustain a game for so long if the average player isn’t getting any meaningful returns.
To achieve foundational engagement, applications need to maintain the qualities of “perceived as fair,” “provide frequent small wins,” “provide rewards, VIP tiers..” and so forth. All of which require app designers to program material RTP values.
For context, nearly all online casino games have RTPs in the mid-to-high 90s, with some exceptions like certain lottery-style games, live dealer games, and sports betting, which can have lower RTPs.
3) FUN
Fun is an incredibly abstract term, but a “fun” application can loosely be defined as an app that can induce excitement, a feeling of escape from daily life and/or a feeling of control.
In crypto, “fun” can be measured by a simple test: Would people use your app even without a token? If the answer is yes, you’re 95% of the way there. Building a truly engaging application is incredibly HARD and requires countless iterations, but once you find even a hint of PMF, crypto becomes the fuel for your rocket.
The byproduct of being a successful publisher that no one talks about is you don’t HAVE to make anyone generational wealth. People are using the app because they feel a genuine connection- the financialization aspect is the cherry on top that maximizes ARPU and growth coefficient.
If your app is genuinely engaging, you can move from crypto promises wealth, leaving most discouraged to gambling is paid entertainment, making loses palatable.
Gaming is the prime example of this principle. As of 2024, global consumer spending on video games was estimated at approximately $455 billion. People literally drop their entire paychecks on in-game assets with ZERO real ROI. Why? Solely because… it’s fun.
The Infinite Game
Crypto’s path to success lies in building genuinely engaging applications, securing early product-market fit, and only then—if it makes sense—introducing a token.
Imagine a world where users of consumer crypto apps organically uncover new possibilities: borrowing against digital assets, speculating/hedging with perps, diversifying into RWAs and overall, seamlessly tapping into the full power of DeFi over time. This natural progression deepens user engagement and expands TVL across permissionless markets. And with the rapid advancements in wallet infra and next-gen trading interfaces, users will be able to access all essential applications and assets from a single touchpoint.
But it all starts with one thing: building an app people actually want to use.
That’s how we win.
The Million $ Question
Lastly, I can’t talk about consumer crypto and not say a few words about distribution, inarguably the most difficult aspect of building a breakout app. Yet, it presents crypto’s greatest opportunity and advantage. Crypto is fundamentally good at bootstrapping network effects, both as a medium of value but also as a conduit of attention.
The most exciting emerging tech to bootstrap network effects is zkTLS- a cryptographic protocol that allows users to prove arbitrary data from 3rd party applications which could be immense in transferring reputation data, targeted incentives and much more.
Beyond zkTLS and basic distribution of network tokens, there’s other avenues that are a step-function improvement in distribution. Things like:
Real-time stablecoin affiliate payouts and creator rev share (currently takes 2+ weeks).
Stablecoin acceptance = ability to cater to more long-tail markets.
etc.
It’s a topic for another article, but combining crypto native distribution with conventional wisdom of previous breakout apps provides a recipe for success at scales we’ve never seen before.
Fin
The next wave of successful crypto founders won’t start by figuring out how to enrich their users, rather they’ll focus on building applications that are genuinely engaging. Only then using crypto as a catalyst for exponential growth.
I’ll leave you with this:
Just how big do you think crypto apps will be, when they’re actually fun?
Very grateful to Mary, Dougie and Benji for the contributions & review!
Disclaimer:
The views and opinions expressed are solely my own and not that of my employer.
References:
[1] https://dune.com/adam_tehc/moonshotmoney
[2] https://dune.com/hashed_official/pumpdotfun
[3] https://dune.com/rsuthar94/godstats
[4] https://x.com/arjunblj/status/1889039321140961303
[5] https://pubmed.ncbi.nlm.nih.gov/31020442/
[6] https://pubmed.ncbi.nlm.nih.gov/12033650/
[7] https://www.researchgate.net/publication/226734697
[8] https://pump.fun/board?coins_sort=market_cap&include-nsfw=true
[9] https://arnav.xyz/crypto-killer-use-case
[10] https://www.888casino.com/blog/gaming-mathematics/return-to-player