🌅 [Analysis] A red ocean for smart contract protocols – Tony Sheng

Crypto protocols face fierce competition as there is a low barrier of entry and large financial incentives to enter. Over the last six months, we've seen this play out especially in smart contract protocols as there are many competitors and weak competitive moats. Other than Ethereum ($ETH), actual traction is virtually non-existent despite the smart contract protocols being well-funded. As a result, many of these protocols have resorted to paid marketing. However, currently, the lifetime value of the customer (LTV) is greater than the cost of acquisition (CAC) of the customers, leading to high burn rates that produce little results. Additionally, protocol teams face pressures from token investors to pour money into paid marketing, since if competitors are pouring money into signaling an existent developer community, they have to as well, or they'll face the wrath of the token holders.

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