Cryptocurrency projects are constantly emerging in the market, each vying for attention and investment. However, not all projects have what it takes to survive the volatile world of crypto. According to Binance Research, sustainable growth in the crypto space depends on one key factor: providing real value to users.
In a recent report by Binance Research, the importance of focusing on real value, sustainable yields, and genuine user demand was emphasized as the cornerstone for long-term growth in the crypto industry. While short-term interest driven by hype and narratives may spark initial engagement, it is not enough to sustain a project in the long run, especially during bear markets.
Many projects have witnessed a surge in popularity by riding on current trends such as artificial intelligence and restaking. However, maintaining momentum and user engagement has proven to be a challenge for some as interest fades over time. Projects that heavily rely on extrinsic rewards, such as airdrops or points systems, often struggle to retain users once these incentives are removed.
The key takeaway from the report is clear: projects that prioritize intrinsic and tangible value are more likely to succeed in the long term. By offering real value through strong use cases and sustainable yields, projects can keep users engaged beyond the initial hype and build lasting loyalty.
So, how can projects deliver real value to ensure sustainable growth? Binance Research outlines three main ways: real demand, real revenue, and real yields.
Real demand is characterized by users’ genuine willingness to use and pay for products or services without the need for extrinsic rewards. Projects that achieve a strong product-market fit can generate enduring revenue and sustain user engagement. Examples of sectors with real demand include decentralized exchanges (DEXes), money markets, and stablecoins.
Real revenue refers to tangible income generated by a project, often through protocol fees. By optimizing tokenomics and keeping operating expenses low, projects can achieve operational profitability. Leading protocols like Tron, Maker, and Uniswap are known for their profitability.
Real yields are another crucial aspect of providing real value to users. These are returns generated from tangible revenue sources and are not solely reliant on token emissions. Similar to dividends in traditional finance, real yields provide returns to token holders and encourage continued engagement.
In summary, projects that focus on real value by showcasing a strong product-market fit, consistent revenue growth, and real yield are better equipped to withstand market fluctuations. On the other hand, projects driven by short-lived trends or speculative interest may experience rapid growth initially but lack the foundation needed for long-term sustainability.
For more in-depth insights, you can access the original report by Binance Research. Remember, in the ever-evolving world of cryptocurrency, sustainable growth lies in providing real value to users.