Newsletter: Brands in Web3 & Web3 in Brands #9

Welcome to Edition #9 of “Brands in Web3 & Web3 in brands“, your regular dose of the latest news from the blockchain, crypto, and Web3 space, curated to provide unique marketing and brand strategy insights with a pinch of spice. 

This week: How 2023’s regulatory whirlwind has created three distinct faces of Brand Crypto globally; Binance’s peculiarly flexible approach to brand identity; and why the real value in NFTs is about so much more than numbers go up. 

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The three faces of Brand Crypto

As someone predominantly concerned with branding, regulation isn’t a topic I typically discuss at length. However, 2023 (so far!) has been a regulatory whirlwind, and stepping back, the force of it is shaping the evolution of “Brand Crypto” at a rate I haven’t seen before in this industry. What’s more, it seems to be creating a global divergence into three distinct “faces” of crypto, which are largely shaped by regulatory attitudes. 

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In the US, the crypto industry has become an outlaw on the run from Silicon Valley to the financial equivalent of Death Valley, thanks to the ongoing enforcement actions of the SEC. 

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Ironically, the closest equivalent to the Land of the Free when it comes to attitudes to crypto is probably China, where the government has only provided the thinnest recognition that crypto even exists. Even if the lengthy US legal process eventually moves in the industry’s favor, the SEC’s actions have already proven damaging. 

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Many crypto firms have shut down their US businesses, while Coinbase, the first digital asset firm to be listed on a US stock exchange, is now seeking to shield itself from US regulatory uncertainty by expanding into more crypto-friendly jurisdictions. 

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Which brings us to the second face of crypto – the besuited technocrat that now typifies countries where crypto is permitted, but only if it’s prepared to play nicely alongside TradFi. 

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The European Union, Canada, Hong Kong, and Japan are all examples of countries that are willing to lend compliant crypto firms the air of respectability. But only if you register, complete your AML checklists, and don’t step out of line. 

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Then there’s the third category – which retains the innovative, visionary, “f*ck yeah!” attitude characteristic of the crypto industry itself for so many years. 

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Over the last few weeks, much of the good-news crypto headlines have been firmly focused on Asia, with South Korea emerging as a particular focal point. Many attendees of the recent Korean Blockchain Week noted the upbeat sentiments and high level of retail interest in crypto, backed up by a report from the country’s tax organization, which states that crypto accounts for 70% of overseas assets held by Koreans. The southern port city of Busan has also announced it is developing its own Ethereum-compatible public blockchain network to advance its bid to become a “Blockchain City.” 

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But it’s not just Korea. Many other developed and developing economies are taking a more progressive stance on crypto and adoption is trending ever higher. India tops this year’s Global Adoption Index published by Chainalysis, where Gemini has just invested $24 million as part of its expansion plans. 

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Nigeria, which is in second place, has the most crypto-aware population in the world, according to a recent survey.  In Brazil, which is also in the top ten, the country’s central bank is collaborating with Mercado Bitcoin, the country’s largest exchange, on CBDC development. 

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So, three faces of Brand Crypto. Since each jurisdiction is free to go its own way, it’s unlikely that one will prevail. The questions are: how will these three personas play together in the future, and how can Web3 founders find the best approach for audiences in any given jurisdiction?

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Binance’s botched branding

The recent research published by THE RELEVANCE HOUSE into the state of branding among centralized exchanges provides, for the first time, quantifiable evidence that crypto brands struggle to deliver a consistent narrative to their customers. Many people have been surprised at our findings, expecting that leading exchanges such as Binance would be leaders when it came to branding. Instead, we found (as I had suspected) that Binance is using multiple conflicting narratives and as such, has a relatively low branding consistency score compared to lower-performing rivals. 

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Now, the world’s biggest exchange is struggling to live up to its values of trust as the US business begins to buckle under the weight of the ongoing SEC action. Over recent weeks, Binance US has lost its CEO and laid off 33% of its team. Subsequently, reports emerged that trust is ebbing away, along with customer deposits.

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While the SEC's actions are arguably to blame for the US woes, Binance also managed to score a branding own goal following the recent tragic earthquake in Morocco. In a bungled attempt to showcase its charitable credentials, the firm offered customers in Morocco $100 in BNB tokens as a donation. The move was promptly criticized as a marketing ploy, which created more publicity than the initiative itself. 

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In another oddball move, BNB Chain, which is ostensibly separate from Binance but nevertheless inextricably linked to the Binance brand in consumer’s minds, has also undergone an odd branding u-turn in recent weeks. Having undertaken some extensive analysis of the BNB Chain website for a further analysis we are conducting into Layer 1 protocols (watch this space!), my team was surprised to note that the BNB Chain website had completely changed the narrative from one week to the next. 

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Spot the difference? From “the best performing decentralized economy” to “a community-driven blockchain ecosystem of Layer 1 and Layer 2 solutions.” 

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The change seems to have been made with no announcement or fanfare, and it’s not even the first time that BNB Chain has undergone a rebrand, having been renamed from Binance Smart Chain only earlier this year. 

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For any audience member paying attention, what are these constant branding u-turns and missteps supposed to convey?  Trust? Not for a brand that can’t stop changing its mind. 

And once you lose trust, it becomes very difficult to sell any other narrative. 

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Community? Why should I trust my community with you? 

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Earn rewards? What’s the catch? 

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High performance? Prove it first. 

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Part of the problem is that Binance has never established its core narrative and, as such, a core audience of believers. Rebranding, when there’s a legitimate need to reflect a new direction or industry reality, can be done in a very credible way. Even in Web3, we have examples of this – look at Polygon, which used to be called Matic and managed to credibly rebrand. 

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But simply blowing with the wind, changing your story, and not bothering to explain sends a message that there’s nobody out there worth caring about. 

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NFTs are dead. Long live NFTs. 

Rolling Stone, never a publication to shy away from making a statement, has declared NFTs “actually – finally – totally worthless.” And actually, based on their measures, it’s perhaps a correct assessment. The market for NFTs, if we talk about floor prices and trading volumes, is unarguably languishing. 

However, if valuable is the opposite of worthless, then value conveys a far broader meaning than the mere price and frequency at which something is traded. Value can be derived from an easier user experience, increased loyalty, new ways to engage customers, and more. In the latest article on THE RELEVANCE HOUSE blog, we explore five ways that firms can use NFTs to generate value. 

Read “More than just a jpeg” 

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Human-readable code

Too many Web3 founders treat branding as an afterthought, instead choosing to pursue the random and elusive hit of viral success. But in fact, branding is closer to the language of Web3 than many founders realize. 

In my latest thought piece for Cointelegraph, I make the case that effective branding is akin to writing a piece of computer code. Everything your company puts out into the public domain creates an outcome in the same way that syntax and functions in programming generate an outcome. For founders, the key is creating the right branding programming to suit your own business and target audience. 

Read the full piece: Human-readable code: Why branding is the programming language of humans.

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Advancing adoption

NASA plans to prove the event of the next moon landing via blockchain by sending a payload to the moon containing “data cubes” that will be verified here on Earth using blockchain technology. While the news is great for enterprise adoption buffs, will the additional assurance be sufficient to convince moon landing conspiracists that the original landings were not staged? Nevertheless, it’s an intriguing real-world use case for blockchain technology and an immutable record for future astronauts and scientists. 

And a piece of adoption news from our home turf, as the Swiss Digital Exchange (SDX) gains a sixth member. Hypothekarbank Lenzburg will join Berner Kantonalbank, Credit Suisse, Kaiser Partner Privatbank, UBS, and Zürcher Kantonalbank in trading digital securities on the SDX blockchain platform. 

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Out and about in Web3

I have the honor of speaking at the HeroFest event in Bern on October 13^th – for more details (and to offer helpful costume suggestions!), please check out this LinkedIn post.