Original title: In the DeFi world, how cultural differences guide users to get used to
Author: Multicoin Capital Partners, Mable Jiang
Compile: QLY
During the DeFi fire last year, forked projects became popular, and there were not many successful projects. SushiSwap was one of the best. To this day, SushiSwap still maintains a strong momentum for development. What are the reasons? According to Mable Jiang, a partner of Multicoin Capital, although SushiSwap and Uniswap look very similar, they actually take a completely different approach in meeting the needs of crypto investors. Behind this, the differences between Chinese and Western cultures are at work. . The following is the original text published by Mable Jiang on Coindesk,
At the end of 2020, I wrote an article about cultural differences in the Eastern and Western crypto communities. When 2021 comes, I would like to explain from the perspective of cultural differences, SushiSwap and Uniswap, two almost identical products, why they are both Can lead to success.
At the end of August 2020, when SushiSwap was first launched, it caused many people to speculate about the intention of this fork project. Some people believe that this is a blow to the liquidity pool without a moat, but others believe that this is actually a quick runaway from SushiSwap before Uniswap launched its token. At that time, the entire encrypted Twitter field basically revolved around the narrative of “community-supported projects.” This concept first appeared when Year and YAM were launched. This concept is great, and it is in line with the motivation of users. The term “fair distribution” has begun to gain a foothold. After YFI was issued, there were more and more anti-venture speeches.
I work for an American investment company, and I spent a lot of time understanding the differences between Eastern and Western cultures. I think that the two projects, SushiSwap and Uniswap, are a manifestation of cultural differences in the field of cryptocurrency between Eastern and Western countries. This perspective explains why these two projects eventually found their respective product markets, even though they used very different ways of entering the market.
Uniswap and SushiSwap
Uniswap is the first impressive automated market maker (AMM), which is a tool that allows users to trade crypto assets without a counterparty or order book. Uniswap has received widespread attention during its growth and has received multiple rounds of financing from investors including Paradigm, a16z’s crypto funds, USV, Version One, Variant, Parafi Capital, SV Angel, and A. Capital, totaling US$11 million. Uniswap is known for its innovation, venture capital legitimacy and high fluency, attracting the attention of many early adopters in the DeFi field.
There are many similarities between Uniswap and Coinbase-I will mention this many times in this article. Coinbase can be considered a pioneer in crypto trading in the United States. It prioritizes user experience (UX) and makes compliance investments.
And SushiSwap was forked from Uniswap’s open source code, and then developed rapidly. Through various incentives and sensations, its value has reached hundreds of millions of dollars. Although Uniswap dominates, SushiSwap now also has a large market share. This reminds me of Binance, which did not enter the market early, but now it has occupied a considerable market share.
How can one project succeed by copying other projects? The secret lies in the cultural differences between the development team and the users they target.
Different products are suitable for different regions
Uniswap is known for its focus. Compared with other DeFi pioneers, it has sufficient capital support and research background, but the team chose to focus on becoming an innovative automated market maker (AMM). It advocates minimalism, the simple front-end system strengthens its brand characteristics, and establishes an efficient and simple trading platform, which is similar to the Google homepage focusing the user’s attention on one action. Coinbase has adopted a similar approach, with a clear and friendly design, which is clearly designed for ordinary users in the United States.
SushiSwap chose a completely different approach from Uniswap. It first divides Uniswap into two parts: front-end and back-end. The other parts have only one difference: liquidity farming. If SushiSwap ceases innovation, it may disappear due to lack of differentiation. However, since its inception, SushiSwap has gradually transformed from a pure AMM to a complete protocol system. Now, it is an independent DeFi network.
After users enter the SushiSwap website, they can see AMM and “Quick Switch” on the sidebar, as well as Onsen, which is a variable incentive program (a rotational reward program) that allows people to vote for new flows Sex pool. The team also plans to launch BentoBox, which can support users in margin trading. Western countries’ trading methods are another model: create a complete set of trading tools, encourage users to stay in an ecosystem, and then use the tokens on the platform as much as possible to cultivate user loyalty and obtain value.
US users will find Binance’s front-end interface too crowded, while Asian users prefer compact pages with more options. These seemingly trivial design trade-offs actually send different signals to different user groups. This is what differentiates SushiSwap from the competition. It caters to advanced users who want more features with one click.
Refined production and rapid iteration
When Uniswap was launched in 2018, it focused on optimizing the system (such as lower gas fees and open source mobile front ends). In May 2020, it released the second edition, adding more ERC20 token trading pairs, TWAP oracle and flash swap functions.
The Uniswap team is very careful in building the network, and few people understand its roadmap. Similarly, after years of product iterations, Coinbase has formed a similar construction model. It does not frequently update the system or launch new tokens, but once it does so, the effect will be very significant.
SushiSwap takes a completely different approach. It is a community initiated project. Many decisions need to be made through public voting, such as whether to hire a developer and how much to pay. Therefore, the core members of SushiSwap are very active in obtaining information from the community and reply on discord in a very timely manner.
This also has many similarities with Binance. The person in charge of the trading platform in charge of the Chinese market will often communicate with users in group chats, so the product will be adjusted quickly based on community feedback. This embodies the cultural characteristics of transparency, community initiative and rapid iteration. Both Binance and SushiSwap hope to provide as much of what users want as possible, even if it is requested by a small number of people.
Brand or business expansion
In 2019 and 2020, many DeFi tokens have emerged, and DEX and AMMs have rapidly developed into the first platform for new tokens. As a leader in this field, Uniswap has naturally attracted a large number of tokens. With its simplicity and first-mover advantage, projects can easily choose to start a liquidity pool on Uniswap. As a fast-growing latecomer, SushiSwap does not have such advantages. It chooses to promote it in a targeted manner and compete with Uniswap on the basis of individual assets.
The SushiSwap team has adopted a strong business development model: the core team and partners jointly expand the liquidity pool, provide better incentive mechanisms, support the launch of new tokens, and support existing project migration liquidity. If Uniswap satisfies the basic on-chain transaction needs of the public, then SushiSwap will optimize solutions for specific market segments, including more mature traders and token issuers.
As mentioned above, Chinese users value cooperation and trust more than American users because they have higher requirements for trust. I think SushiSwap will attract Chinese users by collecting feedback from community users and sending signals through strategic relationships.
Binance is also known for building trust through cooperation, and most of its regional products and communities are the direct result of efficient partnerships.
Uniswap and SushiSwap have the same code, but they attracted different users and evolved into completely different solutions. Since user behaviors and patterns will continue to affect the direction and roadmap of each project, this divergence will continue to develop in the future.
DeFi is a global trend, and mobility is also global, but it is clear that when it comes to the success or failure of a project, regional and cultural differences still play a very important role. When investors evaluate the future prospects of tokens, they should pay special attention to the impact of cultural differences and strategies on the project.
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