The promise of Web3 is to deliver a future of utility and empowerment that benefits everyone, with data ownership and portability being key to this vision. While Web3 is still in its early stages, if the movements continues to grow, it presents many interesting opportunities for data analysts, product managers, founders, and investors. Because the Web3 movement is built on top of a public ledger, this presents one of the largest opportunities for product optimization in the history of the internet. In this post, we will explore the benefits of decentralized user analytics, use cases, and implementation.
Why Web3 Analytics?
The primary benefit of Web3 analytics is deep user understanding. For the first time in the history of the internet, you can monitor your users behavior outside of your app. Imagine if Facebook could monitor what you are doing on Twitter, or Tiktok. Imagine if they could monitor your bank account and transaction history. Obviously, this is impossible and violates hundreds of privacy rules. But, as dapps are built on a decentralized network, Web3-enabled companies have this unique opportunity.
You can gain an incredibly deep understanding of user behavior by analyzing on-chain user behavior. By analyzing wallet data, you can identify user acquisition and retention patterns, measure user engagement and conversion rates, monitor user activity and usage trends, and predict user behavior and preferences. You can see transactions, balance over time, interactions with other dapps, token distribution, and so much more. Web3 analytics drastically expand your toolset for optimizing user growth and make data-driven decisions that inform product development and optimization.
Some of the most common use cases include the following:
- Monitor Users Spending Behavior: You can track user spending patterns and gain insights into how users are interacting on-chain products . For example, if you have a dapp that enables users to buy and sell NFTs, you can analyze the transaction history of your users to determine which NFTs are the most popular, which users are spending the most money, and which transactions are driving the most revenue. You can determine the average balance of your users, and what they might be willing to spend on your platform.
- Competitive Analysis: By inputing the contract address of competitors, it’s possible to analyze the on-chain behavior of similar companies in the space. Some companies may want to target the users of one platform, and use on-chain analytics to orient their marketing and development efforts towards that demographic. For example, if you are building a DEX, you can analyze the on-chain data of competing DEXs to determine which tokens are most commonly traded, which user demographics are most active, and which trading pairs are the most popular. This information can help you identify gaps in the market and create a unique value proposition for your DEX.
- Identifying Retention, Loyalty, and Activity Patterns: Identify user activity prior to signup, other dapps users are interacting with, frequency of user interaction of your product compared to others, and which factors might influence loyalty. For example, if you are building a dapp, you can keep track of platforms that your users might be using in parallel with your product. This might help identify which wallets are at risk of churn; it can also help assess which users a prime for upsell or upgrade.
- Mitigate Risk: Detect and mitigate fraudulent behavior, such as bot activity or fake accounts. By analyzing wallet and transaction data, companies can identify potential security threats such as suspicious transactions, hacked accounts, and phishing attempts.
Using Multibase for Web3 User Analytics
Multibase is a powerful tool that can be used to implement decentralized analytics. Here are the simple steps of implementing Multibase:
- Fill out the request access form: https://0l79gmh91u5.typeform.com/to/CCTCPOP6
- Import wallets
- CSV Import. Import your wallets from an existing CSV file. Some teams keep CSVs of their base users, so we try to accommodate them by adding the simplest form of import. This is also how some users are able to conduct competitive analyses– they procure a CSV of wallets that frequently interact with a competitor, and upload this.
- API. You can also integrate Multibase in your app using our API. Simply register the wallet when a user registers with your dapp. This wallet will be automatically synchronized in your Multibase dashboard.
- Create time-query visualizations
- Create cohorts
- Create wallet-property queries