Crypto firms have spent years building financial products on blockchains and laying the infrastructure underneath them. Now the harder task is in front of them: getting people to actually use those products, and keep using them.
That issue is becoming more urgent as crypto moves closer to mainstream finance. Asset managers have rolled out tokenized funds, exchanges are expanding into lending, payments and other financial services, and blockchain networks are trying to win institutional business. The challenge is no longer just proving these products can be built. It is figuring out what makes consumers and institutions choose them in the first place, then come back.
Coinbase is focusing on what customers want to do with money
For Coinbase (COIN), that has meant putting less emphasis on the technology itself and more on the financial actions customers are trying to take.
“The crypto industry oftentimes in the past was very technology oriented,” said Ben Shen, Coinbase’s head of financial services and loyalty products. He said products were often packed with jargon or exposed users directly to the technology running underneath them.
As crypto products begin to overlap with more traditional financial services, that matters less, Shen said. Customers want to grow their money, hold it, send it, spend it or borrow against it. Whether blockchain is sitting beneath the product is not necessarily the point.
Instead, Coinbase is looking for what Shen called “magic moments” — situations where a customer can immediately understand why a product is useful. But getting someone to try a product once is only part of the problem.
Shen said Coinbase views adoption as a cycle. Money comes onto the platform, customers have a reason to keep it there, and then they have ways to use it. That can mean receiving a paycheck or making a deposit, earning rewards while holding assets, and later spending, trading or making payments with those same funds.
“If you create the right magic moments across these three parts of the flywheel, then that’ll get people to increasingly bring more and more money onto the platform,” Shen said.
Rewards are one way to start that cycle. Some are embedded in the product itself. Others are temporary incentives designed to persuade someone to move money away from a product they already use. Those offers can help “break inertia,” Shen said.
Coinbase, though, does not want customers to transfer funds in for a promotion and pull them out as soon as it ends. The company’s bet is that once money is on the platform, users will find other things to do with it.
A customer might arrive because of a yield incentive, Shen said, and then use the same assets to trade or spend.
“Show me adoption”
Kevin O’Leary, the Shark Tank investor and chairman of O’Leary Ventures, said a similar issue is playing out among blockchain networks competing for institutional business.
Speaking at the Avalanche Summit in New York last month, O’Leary said networks need to show that companies are actually using them.
“The challenge you have is ‘show me, show me adoption,’” O’Leary said.
He said the strengths of a given chain may already be understood by technologists and by S&P 500 companies that know why capacity matters and are less focused on transaction volume. But that is not enough. “I get it, but what I want to see, and everybody else, and which is why they call it work, is you got to get some deals, and you got to get adoption, not just tests,” he said.
Landing one major customer can make the next one easier to win. “The most powerful marketing tool of technology is word of mouth between competitors,” O’Leary said.
There is a consumer parallel as well. Shen said financial services depend heavily on trust because people are handing over their money, and sometimes their paycheck and savings. Hearing that someone else has used a service and found it reliable matters. “There’s like a social proof thing for financial services that is important,” he said.
WisdomTree is pushing tokenized funds into places customers already use
For some firms, adoption also means bringing products to where customers already are.
WisdomTree, the $150 billion asset manager, has built a suite of tokenized funds. According to Will Peck, the firm’s head of digital assets, that lineup includes WTGXX, a tokenized money market fund with about $1.2 billion in assets.
Now the company wants those funds on more platforms.
“You don’t need to just come to WisdomTree,” Peck said in an interview. “There’s going to be other access points that you can go through, where you’re effectively coming to WisdomTree, but through a different front end.”
WisdomTree recently announced a collaboration with MoonPay that will let eligible U.S. retail customers access WTGXX through MoonPay’s platform. Peck said customers who have already provided their information to MoonPay can buy the fund using stablecoins without separately onboarding with WisdomTree.
MoonPay is not meant to be the only place where WisdomTree’s tokenized funds appear.
Distribution may extend beyond company-owned apps
Coinbase is also thinking about how its products can reach customers outside its own platform.
Shen said that does not replace the need for companies to build their own apps and websites. Most will probably do both: keep a first-party platform while also looking for other ways to distribute products.
AI agents could become another route, he said. Coinbase is working on ways for its services to connect with third-party AI tools while continuing to build products on its own platform.
The technology is still being built, and so are the products. But across crypto, that alone is no longer enough.