Advertising is salesmanship in print.

-David Ogilvy, Ogilvy on Advertising (1983)

Here’s how the conversation goes when we try to sell a big wallet or exchange on Spindl ads.

Them: Ads are bad and we don’t like them.

Me: Every last thing you can click on your app’s home screen is either a swap or NFT mint with a referral kickback going to you, and by the way, you’re charging dapps $50k per year to appear in your unranked dapp list.

Them: Yes…but ads are bad and we don’t like them.

The disconnect is thinking that ‘ads’ in crypto are only the banners on top of crypto news sites or chain scanners, rather than the flywheel underpinning the only growth loops that work in crypto.

Crypto ads, when done well, are not just banners: They’re relevant, native content inside an existing UI, and if the lawyers didn’t require us to put a big honking SPONSORED on them, you wouldn’t even know they’re ads.

In fact, we’ve seen that in many cases, users engage with ads more than they do with non-sponsored content. The thought that app developers have to trade off engaging their users versus monetizing them is legacy offchain thinking: In crypto, the sponsored content can be even more engaging than whatever we want to call ‘organic’ content now.

With that in mind—that ‘ads’ can be engaging content that gets a builder or creator paid—we are launching Spindl ‘ads’ inside Base app, the new onchain everything app that brings together a social network, app discovery, chat, payments, and trading.

Ads are now live in Base app and they are different - they are high quality, fun to engage with, and provide both the builder and the user real value.

As another example where ads by another name manifest in crypto, take ‘builder codes’ where outside builders insert a unique code to trades submitted on behalf of users running a third-party interface. According to Messari, outside builders recently broke $10 million in earned revenue in the Hyperliquid ecosystem. Ditto, wallets have been routing trades to this or that DEX under the UI hood since defi started, all of them earning fat referral fees that would make a conventional marketer’s eyes pop1.

Any piece of media, content, or user interface where the creator or developer earns a fee for having you do something onchain is an ad, full stop.

The trading apps that you use are also ads, just particularly dynamic and engaging ones. Ditto the asset detail page on whatever wallet you use. You click the ‘call to action’ (to use the marketing term of art), that swap or buy button, without ever thinking of it as an ad.

Speaking of apps as a form of advertising, Farcaster mini-apps (which are live in Base app) can be boosted as posts in the new feed and in search results, and are fully usable like regular mini-apps. The mini-app ad isn’t much different than a full-on ‘builder code’ UI, which is the unlock to understanding what’s going on here: Any piece of media, content, or user interface where the developer earns a fee for having you do something onchain is an ad, full stop.

So, if everything is an ad, what makes Spindl ads better than what’s out there today? Spindl connects ads to onchain actions, and only charges when real value happens. Spindl lets builders define what success looks like, whether that be minting, swapping, staking, or whatever action you want your users to take.

Initially, we are shipping units that appear in the Base app new social feed, effectively boosting the distribution of existing casts from builders looking to grow. These feed units can be chosen, managed, targeted and measured from inside Spindl’s world-class analytics and audience segmentation app. Whether you’re paying for clicks, follows on Farcaster, or onchain actions like swaps or deposits, Spindl can surface that message inside Base app’s new social feed.

We’re also shipping ads inside Base app’s home page where your chats, videos, and popular mini-apps also live. The ad format matches the rest of the Spindl publisher network, so current advertisers running on Spindl now can easily expand their reach to Base app as well.

We’re excited to again expand the biggest native onchain ads network for an industry that admits no ads and yet constantly invents new ways to convert attention into revenue…just like ads do.

This blog post is for informational purposes only and does not constitute financial, investment, or legal advice. Sponsored content and incentivized onchain actions involve risk and may not be suitable for all users. Please engage responsibly.

To drive growth for your Base app (or monetize your existing Base app), reach out!

Attention is focused mental engagement on a particular item of information. Items come into our awareness, we attend to a particular item, and then we decide whether to act.

Thomas Davenport, JC Beck, The Attention Economy (2001)

Our vision at Spindl has always been to build a transparent and open advertising ecosystem that seamlessly connects onchain apps looking to grow with the right users, and to do so across consumer apps and blockchains. That vision is only accelerating since Spindl joined Coinbase. Today, we’re excited to announce that we’re bringing Coinbase Wallet into the Spindl ads network.

Coinbase Wallet, one of the most popular self-custody wallet apps, serves as a gateway for millions to transact onchain. We’ve worked with the Coinbase Wallet team to build sponsored posts that seamlessly merge with the user experience. These aren’t your typical, blinking banners ads: it’s native content appearing alongside other organic recommendations. Users can go from seeing the post to making a transaction in just a few taps, all in one place.

With the addition of Coinbase Wallet to the Spindl publisher network, we now offer the largest crypto-native, wallet-connected ad network in crypto, full stop.

As with any Spindl publisher, you can use all of the usual Spindl analytics, attribution, audience segmentation, and targeting tooling on the new Coinbase Wallet inventory. Whether you want to target wallets above a certain balance, or that have done trades of a certain size, or if you simply wish to upload your own custom wallet audience, the Spindl ads-buying platform lets you do just that.

As with everything on Spindl, you only pay if your offers perform: once you’re set up with Spindl, you can choose what offchain or onchain actions you want to drive, set your cost-per-action (CPA) bounty or rev share (CPV), upload some creative, and your content starts appearing inside Coinbase Wallet. You can pay for the ads in USDC, or even work with our team to find other onchain payment alternatives.

We’re thrilled to expand our reach to millions of Coinbase Wallet users. That said, Spindl remains neutral, multi-chain, and open to working with all builders. Advertiser and publisher data are kept separate on distinct sides sides of the marketplace, something we’ve built into the Flywheel protocol that’s launching later this quarter.

If you’re building on any chain supported by Coinbase Wallet, from EVM to Solana, and are looking for user growth, reach out to us.

And if you’re a consumer app with wallet-connected (or wallet-enabled) users that wants to add a new revenue line-item, also reach out.

For more visions of the onchain advertising future, subscribe!

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Attention is focused mental engagement on a particular item of information. Items come into our awareness, we attend to a particular item, and then we decide whether to act.

Thomas Davenport, John C. Beck: The Attention Economy (2001)

We’re ecstatic to announce that Spindl is joining Coinbase to build the future of onchain advertising at the company that’s bringing the world onchain.

Spindl has busily spent the past 2.5 years building every element of the marketing flywheel: from attribution to analytics to audience segmentation and, finally, to ad ranking and serving for natively onchain publishers like wallets. From user click to wallet connect to onchain action, and back into audience segmentation and targeted ad again, Spindl operates the full marketing flywheel from start to finish.

Speaking of flywheels, our Flywheel protocol is the onchain manifestation of the Spindl marketing cycle: developers publish what onchain events they wish to drive (and what users are likely to engage), and an entire ad-serving and attribution machinery kicks in to pay publishers for provably driving value. While affording all the control and performance of legacy Internet advertising like Meta and Google, Flywheel does so while also enabling two-sided transparency in the attention marketplace.

If consumer crypto is to take off, someone is going to have to pay the server bills. Already publishers and advertisers are doing custom, one-off deals for co-marketed content across consumer touchpoints; Spindl is the way to do this at scale across many chains and apps.

In conversations with Jesse Pollak and the Base team over the past few months, it rapidly became clear that the shortest path to the Spindl vision of transparent natively-onchain ads lay through Coinbase. With a focus on Based builders and open protocols, (Coin)Base was the perfect place for us to land as a team and product. Spindl will operate as a product team inside Base, but continue to support builders and campaigns across many different chains and publishers.

For existing advertisers and attribution clients, nothing will change in the Spindl service. Soon, we will have even more onchain users reachable via Spindl, both on Coinbase and elsewhere.

For existing publishers in the Spindl ads network, nothing else will change in your integration or how your data is handled. However, look for new and interesting growth campaigns for your users from Based builders very soon.

We will be formally launching Flywheel (with accompanying whitepaper) at EthDenver in late February. Reach out to either turn on wallet-targetable growth campaigns, or monetize your existing onchain app.

For more takes on onchain marketing and what’s coming with Spindl and Coinbase, subscribe for free.

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"For the want of a nail the shoe was lost;
For the want of a shoe the horse was lost;
For the want of a horse the battle was lost;
For the failure of battle the kingdom was lost;
And all for the want of a horseshoe nail."

-James Baldwin, ‘The Horseshoe Nails’ (1912)

What is Attribution?

Attribution is the problem of finding the causal “reason” why a particular event happened in the world. As business logic, the goal is to pick a winner in a competitive attention marketplace, which is also the main input into the marketplace’s business model. In short, who gets paid for driving this user (and their associated revenue), and how much do they get paid? It’s the central question in any marketing system; it’s also the hardest to answer.

To quote some numbers, as of the time of this writing, Spindl just crossed a billion events measured (both offchain and onchain), which is growing around 2-5 million events per day1. Our biggest, longest-running ‘user’ (and more on what that means in our ‘Identity’ piece next week) is on DEX aggregator Hashflow, who has somehow generated 105,954 events in 595 active days2. Vertex, a perps DEX, has alone generated over 100 million tracked events (!).

Why do we bother to track all these upstream events? Isn’t just looking at where the user clicked from good enough? Nope. Not even remotely.

Unlike session tracking via URL parameters in traditional analytics platforms—something often conflated with real attribution, but in practice quite different—marketing attribution is sticky. If a user is activated by an upstream app or publisher, that user will stay attributed to that source, no matter how many times (or from where) they come back to the advertised service.

In Web2, touchpoints and conversion data are well understood: typically users visit a website/mobile app (triggering well-measured events like clicks or app installs), and then make a purchase. There are entire billion-dollar companies—AppsFlyer, Branch, the attribution systems of Facebook and Google—whose only goal in life is ingesting that massive event volume and running attribution logic over the firehose. Dueling methodologies like ‘last touch’ or ‘viewthrough’ define who wins (and loses) in the attribution faceoff, and much of what ads players do is gaming attribution methodology to their advantage.

In Web3, we see a variety of interesting new patterns emerge based on the open nature of the blockchain:

• Conversion events often don’t happen on your website or mobile app at all. For instance, selling an NFT or buying a token on a DEX are both often conversion goals for companies, even though those actions don’t happen on an experience controlled by the app. It might not even be humans doing the actions. Without onchain measurement, you’ll miss most of the action.

• Web3 has new forms of user acquisition campaigns, like quests (where users are paid to try out a protocol) and NFT airdrops (where users get a free asset or token sent directly to their wallet address). These are novel mechanisms, that would be utterly missed, or misattributed, using standard Web2 ads technology.

• Web3 events can be used to drive Web2 events. For instance, we see many games use token airdrops and rewards to encourage mobile app installs: the onchain action is the upstream action that drove something downstream, either offchain or onchain.

• dApps can use other dApps as acquisition funnels for their app. For instance, we see many “conquesting” campaigns where dApps will give rebates to users who are active on competitive platforms. The open transaction record of the blockchain makes all sorts of targeting and incentives possible that are mostly impossible in Web2.

• Everyone is both advertiser or publisher, both downstream of someone and upstream of someone else. As an anecdotal example, Safe (a Spindl client) uses us to measure their upstream channels, while also doing co-marketed offers to Morpho (another Spindl client), and each side wants to know what’s happening {up/down}-stream. Plus there are Morpho pool runners (like Gauntlet) also running their own marketing funnel that runs through Morpho (and elsewhere). The one-way Web2 funnel is a nested set of layers in Web3, both complicating and easing the measurement challenge. We haven’t encountered a cycle in a marketing funnel yet, but it’ll happen at some point.

How does onchain attribution work in practice?

Attribution is the process of distilling a user’s journey to a weighted set of user touchpoints that caused a ‘conversion’: religious overtones aside, this is simply some terminal event the marketer paid to make happen. A touchpoint is any event—a visit to your website from Twitter, an NFT airdrop you sent a wallet, an onchain quest completion—that leads to a conversion. Note that these aren’t mutually exclusive: events can affect both how a user arrived at a conversion, and a revenue generating event itself. Again, the usual ‘funnel’ is weirdly recursive in Web33.

Let’s look at the following example of a typical user journey. Our goal is to determine which event on the left was responsible for the rightmost conversion event.

Blue boxes are touchpoints, green boxes are conversion events.

The key thing to understand about attribution is that while time runs forward, attribution runs backward: a conversion event triggers rearward logic over already-seen events.

It’s a basic observation, but bears repeating: you don’t ‘know’ if a user is going to convert when they see an ad impression, click on a link, or start browsing your app. All you can do is log events going forward, and then, once a conversion event happens, cobble a likely user funnel together using the web2/web3 identity graph4 that ties the relevant events together.

The first step in that rearward look is a “Proof of Life”: Is this an already active user (a ‘live’ user) that converted, or are they new or potentially resurrected?

Dapps can configure their ‘Churn Window’ (the number of days a user needs to have done a meaningful activity on the dApp to be considered active). Once a user is ‘active’, they are sticky to the attribution channel. Only when they churn out are they eligible to be (re)attributed to a different source.

In this case, the user didn’t have a meaningful activity in the past 45 days, so they are considered churned. The touchpoints in question (just clicking in from Discord, Twitter, and Google) aren’t serious enough to be ‘proof of life’ active-user events on the protocol.

Next, we check the “Lookback window” - what activity did they do recently that might have triggered their resurrection?

The lookback window retrieves all touchpoints in the timeframe and chooses a winner. By default in Web3, most dApps opt for a ‘first touch’ model; we support ‘last touch’ and the choice here is almost folkloric (it does change results, but in non-linear and non-obvious ways).

In this case, ‘first touch’ picks Twitter as the winner for the blockchain transaction attribution credit.

Building Attribution

At Spindl, we’ve iterated through a few different approaches to running attribution to deal with increasing scale, configuration, and new methodologies.

We started with a “stateless” model, where we simply queried the journey of a converting user on demand. On the scale of tens of thousands of conversion events a day, this was a fairly cheap and easy way for us to calculate attribution, run backfills, and experiment with different models in close to realtime.

-- 45 Day Proof of Life
SELECT attribution_channel FROM events WHERE identity = ? AND is_conversion = true AND time > NOW() - INTERVAL 45 DAYS ORDER BY DESC;

-- First Touch Lookback
SELECT session_channel FROM events WHERE identity = ? AND is_touchpoint = true AND time > NOW() - INTERVAL 7 DAYS ORDER BY ASC;

Here we have an oversimplified set of queries for defining a first-touch stateless attribution model. When an event arrives:

1. Identity - Determine an identity for the event based on it’s traits

2. First Query - If this is an existing user, copy over the attribution channel from prior event if within the churn window

3. Second Query - Look through attribution/lookback window to determine winner

All of this is done in semi-real time, at the cadence of new conversion events, with no need for intermediate caching or pre-categorization. By single-streaming this entire process, attribution results are completely deterministic, easy to debug, and replayable. (You can always replay events and determine what event is the “smoking gun” which led to an attribution winner).

After an initial 30 days of attribution running, the identity graph5 tying events together generally becomes a lot more stable as we have a clearer idea of existing users. As more and more of our clients have gotten to this stage, and client volume of events have spiked (both off and onchain), we’ve shifted to a more stateful methodology.

We can think of stateful as keeping an up-to-date mapping of the user view of the world, by storing a summary of all events for a user in a series of quick lookup tables.

In the below example, we can see how an incoming event updates the Last Seen and Churn Window for a given user.

By breaking down the history of events through a user centric lens, we enable parallelization as each of these user stories can independently run attribution. Of course, the idea of a user’s full event history keyed on an ever shifting, growing identity graph is clearly not very space efficient and can get very expensive, so we must get a little clever on how/what we store this data.

Today, our attribution methodology runs on a hybrid workflow, where we statefully store important touchpoints relevant for each user such as latest Proof of Life (POL) events and Attributable Events valid within certain time windows, Because our data pipelines are run as batch processes, we use stateless queries to organize data within the batch , and intelligently use a combination of stored state and real time querying when necessary. As identities merge or evolve, the stateful storage updates to reflect the latest user interactions, similar to how a cache would operate.

In practice, our pipeline has evolved to our current solution to tackle some interesting challenges relevant to web3:

• Data Timeliness - Attribution has certain strong guarantees on data timeliness, as both order and timestamps matter. We cannot run attribution on a conversion event unless all previous “Proof of Life” and touchpoints are already ingested. This makes streaming solutions particularly prone to errors, and requires strong guarantees and run-time checks around data availability.

• Late Arriving Data - Simultaneously, late arriving data is the norm. Data providers across blockchains have different SLAs and latencies, and many third-party data providers don’t have real-time reporting capabilities. While we do our best to ensure data comes in strict time ordering, we have a variety of flows that handle late arriving touchpoint data. Since, as noted, we cannot edit any actions we’ve already paid out on, this is a delicate process with many guardrails.

• Hotspots - Identities (i.e. what we consider a bundle of relevant events from the same user) have even greater variance, and we have access to even more historical data on the blockchain. The “Proof of Life” data for an MEV bot transacting thousands of times a day is exponentially more expensive to process than a user doing their first transaction on a new wallet.

• Merges - Since identity is so dynamic in Web3—onchain wallet identity is fairly stable but offchain behavior is very flakey—merging identity (and attribution) requires novel solutions in data modeling to ensure stability and correctness.

When we started Spindl, the ambition wasn’t to simply reproduce the mechanics of Web2 ad tech onchain, but to build features utterly impossible in Web3. For example, the holy grail of marketers—a ‘multi-touch’ attribution model that correctly credits (and rewards) the multi-causal ways users find products—is entirely possible in onchain advertising. The payment rails for one-to-many payments are there, and with public and transparent data, anyone can verify that your fancy fractional model is sane. Crypto is speedrunning ad tech, from ineffective air drops (and equally ineffective CPM advertising), to purely performance-based advertising with decentralized attribution, leapfrogging 20+ years of Web2 ad tech in a couple of years. Real onchain advertising is finally here.

If you’re a publisher or advertiser looking to work with Spindl, hit us up.

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Like many successful products, News Feed Ads rode to success atop a tsunami-esque wave nobody had predicted, or at least hadn’t predicted to arrive right then and so quickly.

Chaos Monkeys (2016)

The unique affordances of the blockchain—user-owned identity, natively-integrated payment rails, permissionless data sharing—open up utterly new user experiences that Web2 social would be at pains to replicate.

Embedded experiences like Telegram mini-apps, Farcaster frames, and Solana Blinks would be almost impossible to engineer on Facebook, Instagram, or Twitter: You just can’t run app A inside app B in any real way, and Web2 has to settle for hacks like triggering Apple Pay from TikTok in order to transact (a flow that recalls mobile wallet transactions).

The Farcaster protocol’s shared data means also that suddenly a user’s data is unlocked across social apps, not to mention the onchain transaction record from any linked wallets. All in all, onchain social will be an absolute godsend for Web3 growth and marketing, as impactful in crypto as Facebook and Instagram Feed ads were for mobile apps and ecommerce.

Today we’re announcing that Farcaster and Lens social app Phaver is joining Spindl’s growing onchain ad network, bringing 300,000 connected wallets and 100,000 MAU to our growing inventory of fully wallet-aware consumer apps like Rainbow and Collab.land. As you can uniquely see via the Spindl Audiences tool below, the Phaver audience has been responsible for over $314 million in onchain volume in the past 90 days. The app’s users skew heavily to DEX trading and yield farming, holding lots of wֵETH and BNB, a prime audience for DeFi advertisers.

Using Spindl’s wallet-based targeting, advertisers can target arbitrarily precise wallet audiences, getting their message in front of the actual wallet holders who’ve connected to Farcaster with those wallets (not some fuzzy and unreliable Web3 to Web2 join that’s probabilistic at best, and non-existent at worst).

Very uniquely, Phaver is using its ad revenue to buy back its $SOCIAL token, passing part of the advertising upside to its token-holding users. This aligns nicely with the Spindl vision around onchain advertising: Not only can the blockchain serve as the ultimate attribution source for marketing campaigns, it can facilitate a value transfer back to users in the form of rebates, bounties, and value-increasing token buybacks.

Thus far, the user reaction has been extraordinarily positive, with the high-quality ads fitting in nicely with organic content (the bump to the $SOCIAL token is also appreciated).

This is what the future of onchain advertising actually looks like: consumer apps that are natively onchain, with users benefitting from sponsored offers from other relevant crypto projects, all of it inside an open and measurable growth flywheel. In the same way that stablecoins are better than bank transfers or credit cards for both merchants and users, we’ll soon see how onchain ads produce all-around better consumer experiences for both users and advertisers in ways Web2 couldn’t have imagined.

If you’re a publisher or advertiser looking to work with Spindl, hit us up.

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In order to properly acquire knowledge of these things, it is necessary to embrace each individual thing with a distinct Idea and a distinct Name, without which the abundance of things would necessarily overwhelm us, and all communication, lacking a common language, would cease.
-Carl Linneaus, Species Plantarum (1753)

Marketers have been bucketing consumers into ‘segments’ or ‘audiences’ or ‘cohorts’ or whatever you want to call them almost as long as humans have been classifying plants and flowers into genus and species. The problem is that while every human might indeed be a unique and beautiful snowflake, what defines their existence in post-industrial capitalism is their consumption pattern…and that may not possess such infinite variety.

Perhaps the most famous (or well-marketed at least) universal taxonomy of American consumers was the PRIZM1 segments sold by Nielsen, the television measurement people, during the heyday of the programmatic data markets in the 2000s.

The PRIZM bestiary featured such zingers as:

• Campers and Camo: “Despite their age, they are below average in their use of technology.”

• Kids & Cul-de-Sacs: “This segment is a refuge for college-educated, white-collar professionals with administrative jobs…”

• Bright Lights, Li'l City: “They are college educated, younger couples who settled in the nation's satellite cities…” (Austin peeps, you’ve been seen.)

With the cold, appraising eye of the marketer, Claritas unsentimentally ranks the segments by buying power from topmost (‘Upper Crust’) to the very Rockwellian but downmarket ‘Bedrock American’ (“…they have modest educations, sprawling families, and service jobs…”). This segmentation was keyed by ZIP code (hence the ‘Z’ in PRIZM), which was about the maximum granularity of consumer data in the Before Times, and used even well into the internet age.

Web3 marketers are similarly cooking up consumer archetypes of onchain behavior (though perhaps without such cringe names). Ever since Spindl launched its Audiences feature earlier this year, clients have been creating dozens and dozens segments based on combinations of their own offchain data, plus public blockchain data: “Perps traders from Twitter” or “Arbitrum stakers who staked more than 1000 ARB from Telegram” are good examples.

Here’s a representative list of the audiences targetable on Spindl, along with their definitions:

• Zyns and a prayer: Holds $10+ memecoins ($DOGE, $SHIB, $PEPE, etc.)

• Patrick Batemans: >$1M DEX Volume

• Lambos in Miami: Wallet Balance ≥ $1M

• Apes and Penguins: >$1M trade NFT volume

• Sybil army: 20+ transactions with questing contracts

Really though, the first audience every project asks for is that of their leading competitor, almost without fail. Web3 possesses unique data affordances undreamed of in Web2, and the entire transaction record is there for the taking. Amazon can’t target Walmart shoppers in Web2, but their Web3 analogs can absolutely do just. With Spindl of course, they can do just that.

The problem with all this clever audience building is that, absent an actual onchain ad network, you can’t do anything with it. The only way to actually reach those users is via media that’s natively onchain and aware of the user’s wallet (or wallets). We launched the Spindl publisher network to do just that, with novel media—posts inside wallet-gated Discords, offers inside wallet apps like Rainbow—that’s both personalized and a native-feeling user experience. The ‘Patrick Batemans’ and ‘Zyns and a prayer’ of this world won’t be paying attention otherwise.

If you’re interested the best crypto measurement, attribution and ads targeting possible, contact us.

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The threshold is the limit, the boundary, the frontier that distinguishes and opposes two worlds — and at the same time the paradoxical place where those worlds communicate, where passage from the profane to the sacred world becomes possible.

Mircea Eliade, The Sacred and the Profane (1957)

Wallets apps are a unique consumer experience. As both the portal to, and transaction layer for, consumer crypto: it’s where a user both does something onchain and, increasingly, discovers what to do there. If done well, transacting in a wallet is as seamless as the Apple Pay-powered shopping experience inside TikTok, or any mobile ecommerce purchase these days.

Take Rainbow wallet for example, with their In-app Browser. Clicking on anything opens the browser; connecting a wallet to an app is an in-context pop-up; doing a transaction is just another clicked pop-up. It’s about the same number of clicks as ordering DoorDash or buying inside a Shopify store.

Or take Rainbow’s integration with Mobile Wallet Protocol (MWP), which allows apps to seamlessly send a transaction to a mobile wallet (which then gracefully sends the user back to the original app). Again, the ease recalls that of Apple or Google Pay used inside a mobile browser: a pop-up confirmation screen…and the transaction is done.

The crypto user experience has been historically (and hysterically) bad, but wallets like Rainbow are the leading the way to a very different world. Which is why we’re excited to announce that we’re partnering with Rainbow to power their featured apps and offers inside their mobile wallet. Web3 builders are desperate to show relevant content to users based on their onchain behavior, and wallet-aware publishers (particularly wallet apps) are interested in revenue streams beyond referral fees. Wiring the two sides together—the consumer app with user attention and the dapp looking to grow—has been Spindl’s mission since it was founded two years ago, and it’s finally happening at scale.

With the full Spindl attribution, audience segmentation, and campaign management product, projects interested in growth get Web2-quality visibility and measurement in their marketing. No offchain data is ever used to surface content inside the publisher—the only data involved is onchain—assuaging privacy concerns. Finally, by enabling projects to share revenue with publishers on provably real user engagement, consumer crypto apps finally have a viable business model that can pay for a new Internet.

Much like Yahoo! and AOL were once the gateways to the early Internet, well-designed, smooth wallet experiences like Rainbow’s will be absolutely critical for turning on growth in crypto. No other type of publisher comes close in terms of presenting users with relevant offers and content in a crypto-native context. As wallets feature more and more content beyond DeFi transactions, even more opportunities to engage crypto-native users present themselves. The crypto growth flywheel is finally here.

If you’re a dapp or publisher interested in either acquiring new users or monetizing ones you already have, get in touch.

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This is part 2 of the Flywheel protocol litepaper (part 1 is here). The protocol itself is launching in late August/early September (the actual ad system is live now, though only partly onchain). Feedback always welcome.

The headlessness (and footlessness) of current Web3 growth

Flywheel isn’t the first growth-oriented protocol in Web3. Layer3 and Boost have built well-thought-out onchain mechanisms for incentivizing users to engage with dapps. Similarly, Fuul (and Spindl) created a referrals product that mimics the original logic of programs like GMX’s.

A protocol isn’t a distribution channel though: a pixel-serving publisher is.

In the case of questing platforms like Layer3 and Rabbithole/Boost, that publisher is their own website (e.g. layer3.xyz). The protocols in question might be very elegant onchain machinery that rewards users for provable actions, but without an actual consumer experience they’re just invisible smart contracts on some chain. New and real users (rather than farmers botting quests) need to have their attention waylaid in some other consumer experience and onboarded to a new dapp. Without additional distribution channels, any questing platform is only as good as its own website, an audience upper bound set by the site’s daily uniques.

That other Web3 mechanism, referrals, is even more headless and distribution-constrained. Most of the referrals platforms like Chainvine are struggling or dead, and the only referral programs that seem to do well (e.g. GMX, Zora) are ones that have fanatically strong community and bake the referral mechanism natively into their protocols. Simply bolting on a referral program to an existing protocol, in our experience of running referral programs, almost never scales to meaningful size.

Quiz: Who’s the biggest referrer on the GMX referral program, probably the biggest such program in Defi?

It’s not an influencer or a whale: it’s CoinGecko. And the link isn’t even underneath a splashy ad or call-to-action, it’s on a completely unremarkable website link on the GMX token page. ($750k in referral revenue to date, on Arbitrum alone.)

So what if Flywheel, in addition to bringing publishers to an ads ‘buy side’ that it enables, also brought permissionless distribution to protocols like Layer3 or GMX’s referral program? The publisher-side ads slot in precisely with the existing referral economics: the publisher, like the referrer, gets paid a cut of user revenue. The only task for Flywheel (or specifically, a publisher partner on the supply-side of the market) is choosing which users and publishers to target. This can even be done mostly permissionlessly, as the sponsoring dapp doesn’t much care where their inbound comes from so long as users convert. Marketing composablity, FTW.

Conversely, the existing ‘Web3’ ad networks like Hype or Slise have no onchain manifestation whatsoever; they’re essentially Web2 style ad networks for crypto-related publishers. They offer little or nothing in the way of onchain measurement, and no economics beyond the risky CPM we’ve had since the late 90s. While such inventory may well make sense for general brand awareness, it doesn’t exploit the rich onchain data of the blockchain for either targeting or measurement. Ultimately, it’s just a rehash of technology that’s dated even by Web2 standards.

Flywheel can help both the headless buy side (quests, referrals, airdrops) and the footless sell side (normie ad networks) by presenting the missing (onchain) half of their respective flywheels. Quests and referral programs can get much greater distribution on more natural consumer touchpoints, while keeping their native economics. Web2 ad networks can aggregate the performance-oriented demand of crypto-native advertisers and (assuming they can convert users) get richly paid for their media.

The glue holding the whole thing together is the shared state of the blockchain coupled with crypto payment rails that seamlessly turn tokens into marketing budgets. That’s it. Spindl (the company) isn’t even essential to the turning of the proverbial (or literal) flywheel here. We simply show that it can be made to spin.

User Privacy

Thus far, we’ve harped on how Web3 is a close parallel to Web2 marketing, rebuilding most of the offchain ads stack onchain (with some concessions to the blockchain). One area where matters are not only dissimilar but inverted is that of user data and privacy.

In Web2, your real identity is online, but your transactions are private; in Web3, only a pseudonymous ‘you’ is out there in the onchain Internet, while every transaction is public and queryable. This inversion creates very different expectations around user privacy, one we’ve built into Flywheel.

(More broadly, we’ve delicately traded off the two privacy worlds inside Spindl measurement via privacy-safe Web2 SDKs. With Flywheel, we hope to avoid offchain personal data altogether.)

In the ideal Web3 ads system, only blockchain data is ever used in all but the most local, client-side decisioning, and even then anonymously (ranking ads by observed clickthrough rates, for example). Flywheel neither expects nor receives any offchain personal data, nor does it drop any cookies or fingerprint any devices. No user data leaves the client side at all, and outside of the publisher partner1, nobody knows anything about the user beyond what’s already on the blockchain. While Spindl, the measurement platform, joins some user session data to wallet addresses for the sake of offchain to onchain attribution, Flywheel never use offchain personal data in any way.

This simplification of the privacy question—really, just building the system along the lines of existing Web3 privacy expectations—is part of why we chose to focus only on crypto-native wallet-aware publishers from day one. We don’t fire pixels on websites, ingest user data, leave traces on the user’s computer or mobile device, or sell data: only what’s onchain is involved.

The offchain part of Flywheel is merely a way to serve pixels somewhere or do some particularly hairy math (like ranking): none of the data or value-transfer situation happens offchain. Everything that matters, from the value of a publisher to the success of an advertiser campaign, are all queryable via Dune. Sunlight is the best disinfectant, wrote Louis Brandeis, and the blockchain provides an unprecedented level of transparency into the often shady business of digital marketing (and perhaps more transparency than some current market participants would like).

We hope Flywheel will surpass Web2 ad tech both in effectiveness and openness. And all that without the often misguided regulation (ahem, GDPR and its endless pop-ups) that have only made matters worse for users and better for monopolistic incumbents. The dream of crypto is to decouple ownership and value from the ‘weary giants of flesh and steel’: governments, banks, and legacy rentiers of various flavors. Flywheel brings that same spirit into the attention economy of marketing. Most of our natively-onchain Spindl clients recoil at the thought of spending money on regular, spammy Web2 banner ads, both for performance and privacy reasons. Time to offer them something better.

If you’re an advertiser or (wallet-aware) publisher who’d like to get involved, please reach out.

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This is part 1 of the Flywheel litepaper. Part 2 can be found here.

Humans have advertised since they were able to write and print words.

The walls of Pompeii, a Roman city destroyed by the eruption of Mt. Vesuvius in 79 AD, featured political ads urging passers-by to ‘elect Marcus Epidius Sabinus senior magistrate with judicial power, a most worthy young man’ (among other often more vulgar pronouncements). Thomas Caxton, who brought the printing press to the British Isles, printed an ecclesiastical guide to the Christian calendar Ordinale ad usum Sarum in 1476, immediately followed by an advertisement announcing where it could be bought.

Thus far Web3 has homebrewed various advertising-like channels to grow users: airdrops, which leverage permissionless sending to buy loyalty and user attention; quests, which incentivize users to perform transactions; NFT mints, which, like early Facebook likes, are a fleeting, low-friction ways to express brand affinity. Much is made of these channels’ ability to pay both users and creators for their actions.

Such novel schemes however—leaving aside their actual marketing efficacy1—disregard the real utility of advertising in the digital economy. It’s not all about acquiring new buyers for an ecommerce shop or players for new game: it’s about underwriting the consumer experiences that make online (or onchain) an inviting place to be to begin with. In short, it’s really about paying for the Internet.

If Web3 consumer apps reject the ick of advertising, those apps may well amount to little more than a wall of thinly-veiled advertising, extracting more and more value from more and more ‘users’ who are themselves farming the arrangement. In high-mindedly rejecting advertising (while in fact embracing its more rudimentary forms), Web3 risks becoming nothing but a billboard for pumps and grifts of various flavors2. What would pay a creator more: a referral program that depends on viral organic distribution, or a proper ads system that shares revenue with a publisher or creator?

More practically, an ecosystem of builders and users cannot survive without a scalable machinery to turn money into attention, and that resulting attention back into yet more money via users paying for real products. It’s the biggest frustration we’ve heard from Web3 growth teams using Spindl for measurement: I’ve run the two or three basic growth playbooks—web2 ads, a referral program, ongoing quests—what do I do now to grow even faster? What exists now simply isn’t enough.

On the publisher side, the long-suffering mods of Discord and Telegram channels are finding that ‘community’ doesn’t pay the bills: they too deserve to monetize the audience they’ve attracted and curated. Wallet apps like MetaMask and Rainbow are also trying to monetize beyond mere swap fees. Once the trading apps of crypto, the wallets are fashioning themselves into portals of the onchain world, with both organic and paid discovery (AKA ads) featured in newly-launched ‘explore’ tabs and dapp ‘stores’ (Flywheel is powering some of them).

As revenue from swap fees plateau and wallets become more commoditized, their builders realize they must find other business models for the user attention they’re garnering. Similarly, clients building on social protocols like Farcaster are realizing it’s not cheap to maintain a free tier for their apps, both due to protocol fees and server costs. They too must make a buck from users.

This is an inverse coincidence of wants: publishers have attention but want money; developers have money but want attention. Thus far, nobody seems to be coordinating this natural two-sided market into an actual onchain protocol.

That’s why we’re building Flywheel.

From spindl(e) to flywheel

Just about every Web3 marketing trick is a reboot of a Web2 one: quests are the new ‘offerwalls’, points systems are the new frequent-flyer programs, and airdrops are rebate programs (if money were free).

Flywheel can similarly be analogized to the programmatic Web2 ads world, whose high-level contours look like this:

Simply put, publishers and advertisers exchange money for attention via intermediaries which represent the interests of each side, along with a neutral(ish) arbitrator known as ‘attribution’. Each intermediary provides value to their respective partner: the PubCo (or ‘SSP’) serves ranked ads and aggregates demand across advertisers3; the advertising partner (or ‘demand side partner’) provides an ads-management UI, targeting functionality, and reach across many publishers. In programmatic ads systems like Google’s, the market landscape is actually organized roughly into this configuration.

Let’s look at the protocol in more detail:

Flywheel mirrors the same functional relationships as Web2, but puts much of the necessary state onchain, though not most of the actual ad-serving logic (which is necessarily very real-time and client-side). Everything the publisher side needs to run an ad is contained in the advertiser smart contract that stipulates the desired onchain conversion rates, their value either in CPA or CPV, and ancillary configurations like which attribution provider to use.

In theory (if not fully in practice), a publisher can permissionlessly index the blockchain for Flywheel smart contracts and run whatever ads they like. The system is permissionless, and there’s little incentive to commit impression or click fraud as the advertiser will only pay for onchain actions.

The advertiser’s actual experience for running a campaign looks almost exactly like what it does in a conventional ads system; our growth marketers have compared the UI to that of The Trade Desk (a large public DSP) or even Facebook (shocking given the background of Spindl’s CEO and CTO).

What conversion event do you want to target?
How much are you willing to pay for it?
Who’s your ideal user to target?

Hit ‘go’ and (behind the scenes) the smart contract is written onchain and the flywheel (pun intended) starts spinning. The only sign the marketer is on the blockchain is adding funds to the ad budget (which are necessarily a wallet transaction). The Web3 marketer’s budget, like their users, are onchain and they need to use tokens to pay for ads: nobody here wants to shovel fiat at Google and Facebook (or even can; content policies often forbid crypto advertising).

The setup on the publisher side is sparser, as all the buy-side needs to know is the publisher’s wallet address for payment, as well as basics like acceptable ads formats. The offchain publisher setup with ad serving is a bit more involved, but irrelevant to the protocol. While publishers are theoretically incentivized to broadcast just how many high-value users open their app, in reality, user pushback will keep them from (likely) broadcasting much in the way of even aggregate ads delivery data like impressions counts (but, who knows?, the vibes here are already changing).

The publisher and advertiser setup is mostly a way of sharing the necessary state to run a performance-driven ads system. While some of that state is dynamic, e.g., the smart-contract balance is the campaign’s remaining budget, stateful information is mostly absent despite the dynamic nature of an ads campaign. The ‘what happened in the world?’ data lives exclusively inside the attribution data written onchain by the third third party in this triangle: the attribution partner. That data plays a critical role in joining the left and right-hand sides of our diagram above into a monetization flywheel (pun intended). Without it nothing works, and it’s worth pausing to discuss why.

Why attribution?

What is attribution exactly? There are almost as many definitions as companies who claim to do it in crypto, and yet the definition in the Web2 world is quite clear. Attribution is the logic around how you decide which of the various media a user interacted with led to revenue, and just how much revenue. A heuristic for telling if something is attribution is if it actually decides between which of two channels to pay for an acquired user (and how much). If it doesn’t do that, it’s some form of analytics or bookkeeping, but it isn’t attribution by the lights of most marketing practitioners.

Usually what’s actually going on (at best) is that a UTM-style parameter from the inbound URL is written onchain as a field in the transaction. This is how almost every referral program on Web3 works, but it’s not in fact ‘attribution’ by the traditional definition of the word. If the Web3 attribution problem were as simple as writing tags onchain, then simply looking at a referring UTM in a Web2 link would have been enough to solve the attribution problem there, but that sure isn’t how monetization in Web2 works.

Take for example an attribution study we did for quests run during the first Base Onchain Summer. Something like 63% of users who did quests, did both Layer3 and Galxe quests. Simple onchain attribution returns two sources for that user (some even did a Rabbithole quest, so now we’re at three).

Well? Who wins there? Because the marketer sure isn’t paying twice (or thrice) for the same user (not if they can avoid it).

Simple onchain attribution isn’t quite nuanced enough to handle the real-world Internet where users are constantly careening among social media clicks, mobile experiences, and browser sessions, while churning out (and back into) various apps with which they have long-term but erratic relationships. The simplistic forms of onchain attribution we have today are good enough for marketers running essentially a single acquisition channel, but most marketers are already well beyond that.

Once Web3 marketers run several channels at once—and that’s already happening—a Dune dashboard provided by the channel (which has no incentive to be truthful) simply won’t be good enough. It also doesn’t satisfy marketers who very much want to pay to acquire only new users in this campaign, and don’t really perceive their marketing goals as atomic transactions uncoupled to any larger user journey or lifetime value.

Lastly, the advertiser shouldn’t trust any attribution presented to them by the publisher or the marketing channel itself. The attribution platform ultimately works for the advertiser as their trusted oracle for the mess of data that results from multi-channel marketing; it’s the only party fully on their side who has no explicit stake in the success of a marketing campaign. They are there but to count and nothing more.

As a more practical matter, a single kickback on a single transaction—what goes on in the bounty-style referral fee of most programs—may not add up to much in the end. The juicy revenue model here is a fraction of the total lifetime value, the LTV, which in Defi can be north of a thousand dollars per user (see chart above).

In Web3, DAUs are low, but LTVs can be high: it would be remiss to not pass some of that value to publishers. For that reason, a publisher kickback as a function of the total lifetime value is a far more remunerative way to run an ads system than simply piecewise micro-bounties for every action. For that, you need sticky attribution that tabulates user value and accrues it to the correct source. This is how we pay the server fees for a billion people onchain.

Tomorrow we’re dropping part two of our litepaper, which discusses the headless nature of distribution mechanisms like airdrops and quests, as well as that ever-present question: user privacy.

If any publishers or advertisers (or ads buyers like agencies or marketing platforms) would like to discuss more: reach out!

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In an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.

Herbert Simon, Designing Organizations for an Information-Rich World (1971)

‘Ads’ are a bad word in crypto, and yet (almost) everything in crypto is an ad.

Every shared mint on Farcaster is an ad: the referrer will make a cut of the minting fees. That link in your Discord or Telegram channel to a new DEX is an ad: the poster is getting upwards of 10% of your protocol fees via a referral program. Every memecoin is an exquisitely precise ad, a self-measuring barometer of attention: the price goes up if people talk about it and down if they don’t. Crypto is more spiritually money-focused than it realizes, and more than Web2 was when it was born; the money machines were built as a desperate afterthought.

Today we’re announcing a partnership between Spindl, Daylight, Serotonin, and Collab.land: a unique union of publishers, monetization technology, and a full-service marketing agency. Altogether, it represents a first: the ability to incentivize users (and their apps) along the full stretch of the marketing funnel, from an existing consumer experience to a new (to thprotocol, with zero legacy Web2 ad tech1.

To date, there has been very little in the way of onchain ads technology. A couple of self-styled ‘web3 ad networks’ are really just very basic web2 ad tech being run on crypto-focused publishers: the banner ad running over a chain scanner or token charting website. There’s nothing natively onchain about them at all, and their ads tend to convert poorly.

There are alternatives: Companies like Addressable use the blockchain as construct targetable audiences, finding those audiences on Web2 publishers like Twitter, Reddit and the wider Web (this is the reverse compliment of what Spindl attribution does, which is why we separately partnered with them). That’s an essential bridge that will be useful as long as Web2 is around, which is likely forever.

But something new is afoot: Web3 consumer is finally happening. Farcaster is happening, its many clients like Warpcast, Supercast, and Phaver are happening. Coinbase Smart Wallets that seamlessly issue a wallet with a social login are happening. Privy and Dynamic and embedded wallets are also happening. Web3-native onchain publishers and media are finally happening. Millions of new users will be onchain, whether they realize it or not.

What this means from the marketing perspective is that while most of the onchain action so far has been at the bottom of the user funnel—users land on a project’s page, connect a wallet, and only then transact onchain—the top of funnel is finally onchain too: users can natively transact on any user interface they touch. This changes everything about how users are acquired.

Consider this: What would Amazon pay for a one-click banner ad that lets you buy the product you abandoned in an Amazon shopping cart, all while browsing The New York Times? They would pay billions and billions for it, given the impact on conversion rates. But such a thing can’t really be built using legacy Web2 technology2.

It can be so easily built in Web3 that everyone and their brother toyed around with building the crypto version of it. It’s called Frames and launched on Farcaster this past February. There are so many of these damn things running that Warpcast (the largest Farcaster client) has a Frames-specific feed just to see them all.

Now imagine similar user experience, inside a consumer app, that’s correctly targeted via a wallet-based audience informed by onchain transactions, correctly attributed via onchain measurement, and paid for by natively onchain payment rails that accept your protocol token.

That’s what Spindl is launching today with our publisher network: a unified targeting, attribution, and payment system that finally completes the full marketing flywheel.

By ‘ads,’ of course, we don’t mean the hideous and annoying banner ads or mobile popups of web2. We mean an in-context, native, and relevant sponsored call-to-action like the ones below in a popular Web wallet:

These units are created and managed by Daylight, one of our partners, which surfaces airdrops and NFT mints inside consumer-facing experiences across several leading wallet apps. Their network of wallet partners includes roughly 5 million transacting wallets, the largest such onchain publisher network.

But do they work?

Can can you deliver the goods, in this, case real paying users, while making it worth the while of the publisher?

So far, the answer is a resounding yes. The ad unit you see above, generated inside the Collab.land signin process used by over 5,000 Discords, generates a steady clickthrough rate of over 10% across several advertisers. The resulting effective CPM (the generated monetization for each such ad) has peaked as high as $50 CPMs (and no lower than $10 CPMs) with several live campaigns, far exceeding the average CPMs of a legacy Web2 ad system.

Collab.land plans to share its ad revenue with the Discord moderators, rewarding those who have kept long-running communities going, on a volunteer basis. Recently, Telegram announced it was sharing ads revenue with channel moderators ads appear, making those communities sustainable businesses.

Our crude diagram above is agnostic to the publisher: whether a conventional media publisher, a channel moderator, or an influencer. The blockchain means everyone with an audience can be rewarded for it, irrespective of scale. Something that, again, would have been difficult or impossible to build in the offchain internet.

Web3 consumer is here and someone is going to have to pay for it. Server costs are manageable when you’ve got 10,000 MAU, but not when you have 100 million. Spindl, along with its network partners, is building the means to do just that. We won’t create a new onchain internet without it.

If you’re a publisher or advertiser who wants to learn more about the network, contact us.

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Spindl has jumped on the Farcaster bandwagon bigly.

Here is our Frames dashboard, with stats on the ecosystem and every shipped Frame.

Here is our map of every Farcaster node worldwide (it’s growing!).

The year is 2011, Facebook is still a private company many doubt will be a viable business, and the ads system is an embarrassment only good at convincing brands to spend money to collect Facebook ‘Likes’ they don’t know what to do with. At the time, I was among a handful of Facebook product managers trying (and failing) to change that.

In the middle of that pre-IPO revenue crisis, the core Facebook team, of which Ads was but a distant and un-influential part, decided to make a huge bet. From my memoir Chaos Monkeys:

It involved a nebulously titled product called Open Graph, the first version of which had launched at Facebook’s developer conference F8 … it added the verbal dictionary that accompanied the “Like” button, expanding the Facebook vocabulary to things like “play,” “listen,” “watch,” or “buy.” It was the new subject-verb-object language of everything you did online.

Antonio García Martínez listened to Wax Tailor’s ‘Only Once’ on Spotify.

Rather than merely express some vague approval via Like, Facebook users could now broadcast everything they were doing, with the aid of outside developers who built Facebook’s new grammar into their products. By doing so, these developers made their products “social,” and potentially viral. In exchange for pumping their data full-throttle into Facebook, those outside developers—music players like Spotify, or publishers like the Washington Post—got News Feed distribution, driving yet more users to their content and services. That was the dream, anyhow.

The idea was a good one: why center the Internet user experience around the rapidly fragmenting networks of Facebook, Twitter and every other network? Standalone media apps like Spotify and Netflix were growing rapidly: why not tie together all the consumer experiences together with the social network, benefitting both?

In practice, the entire effort and its accompanying ads product was a monumental flop, threatening the company’s looming IPO. Only a frantic product-building scramble in the following year shipped most of the ads product that made Facebook the trillion-dollar company it is today.

Ironically, the somewhat-forgotten Open Graph Protocol has recently been resurrected to power the hottest new feature of Web 3: so-called Frames inside onchain social network protocol Farcaster. For those unfamiliar with Farcaster, think of it as a kind of Twitter/X product, but built on the blockchain. Farcaster is just the underlying protocol (like SMTP is the underlying protocol to email): To actually use it, you need a client like Warpcast to ‘see’ the actual social network.

Frames is a deceptively simple experience: a user simply shares a link to a website which, under the hood, is festooned with the OG tags defined by the Open Graph Protocol1 lo these many years ago. A Frame opens like a portal to another app, allowing that other app direct access to the user. From the Web 2 perspective, it doesn’t seem much different than the <iframe> a website routinely opens to another piece of the Web: the difference is that the shared state of the blockchain makes the embedded experience as native as that of the app itself.

Since Frames launched Friday, Farcaster’s DAU has spiked, and developers have rushed to build the sort of native crypto functionality—claim or mint NFTs, play games—that until now happened in separate, silo-ed experiences (as it does in Web 2). By Spindl’s count, 313 apps launched 526 Frames since the product launched last Friday. Amusingly, someone even shipped a way to run a Doom game inside Farcaster (see cover photo above), displaying just how far this Frames business could go2.

What we have in Frames is a new Web 3 primitive that Web 2 could never really power: an easy way to run app X while a user is still inside app Y, with little coordination between X and Y. The interoperable identity and decentralized transaction record of the blockchain, along with the seamless handling of money and digital ownership, makes it possible to have a real and universal graph of user actions across consumer apps, something even Facebook at the height of its popularity couldn’t manage. It is the Open Graph vision, even if all that remains of the original protocol is the <meta> tags that make the initial connection possible (while the blockchain does the rest).

This changes everything about the consumer experience.

The entire user funnel of Web 2 is predicated on a user clicking through to another app’s landing page, going through a login and/or conversion sub-funnel (remember: identity and payment are hard in Web 2), and finally ending up on a confirmation or experience page. Web 3 compresses all that needless clicking and logging-in into a single inline experience, replacing the lengthy funnel with a user-publisher-developer nexus operating with the user experience (and user control) at the very center. There’s no Facebook giant in the middle; there’s no hacked-together waterfall of cookies and logins and credit-card payments tying it all together.

Imagine these user stories:

• You share a selfie with a new Uniqlo sweater you just bought, sharing a link to the product page, which generates a preview card and a 10% off coupon for the same garment. You go ahead and buy with one-click purchasing: the influencer gets a kickback, the publisher gets a bounty, and you get a deal on a sweater. It all happens seamlessly.

• Someone shares a song they’re vibing to: a player widget appears offering to stream it from your favorite music-streaming service embedded alongside your friend’s post. It all just works.

• You’re reading an announcement on a media site about a new protocol and token that just launched: right next to the text is an intuitive buying interface that lets you effortlessly analyze and buy some of the booming token. Nothing like this experience exists in the traditional finance world.

• Someone writes a long take on a viral blog post, sharing a link to the content: With one click you reveal the article of interest, pay the writer (with referral credit going to the original sharer). It costs you pennies and you don’t think about it.

The technical and multi-party coordination problems to make these user stories happen in Web 2 were insurmountable, which is why Facebook’s platform play (and others like it) failed, but it’s almost automatic in Web 3. This isn’t just a feature of Warpcast and the Farcaster protocol of course. Embedded trading widgets, Telegram bots with inline actions, the aggregator/marketplace combo where front-ends seamlessly use protocol back-ends; this sort of permissionless coupling of consumer experience with onchain machinery comes very naturally to Web 3. By creating Frames, Farcaster has slapped a social-network experience on top of the blockchain that for too long has been buried under layers of unfriendly UX like wallet transaction flows.

For Web 3 to succeed it needs to do two things: Enable cool functionality unable through traditional Web 2, and make the user largely unaware that they’re even on the blockchain. With Frames, we’re finally doing both.

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Eventually, all things merge into one, and a river runs through it.

Norman MacLean, A River Runs Through It (1976)

Two years ago, when I was still employed at one of the large Web 2 attribution platforms, I was staring at the real-time dashboard of the company’s data ingestion. About 300,000 times per second, or 25 billion times a day, someone somewhere sent another event happening on their mobile devices—think clicks or app installs—into the company’s vast data machinery. This was the entire world of mobile computing, from Facebook to consumer apps like Netflix, agreeing on what had happened in the online world and settling billions of dollars of ads spend.

What if everyone just used a common database and wrote into that, I thought, instead of having to slosh all this duplicative state around?

This thought partly led to Spindl’s founding: understanding the promise of the shared public ledger of a blockchain as common marketing database. For the past year we’ve been building a Web 3-native version of the attribution and analytics technology that’s now standard in the mature mobile world. Much of Spindl’s magic is allowing users to seamlessly move between Web 2 events like clicks and Web 3 actions like NFT mints, but there’s still lots of important functionality missing.

Partly that’s due to mobile marketing being hard: Following users from walled-garden platforms like Facebook to the app store to an app install to actually using the app is a convoluted engineering problem. The company we’re partnering with, AppsFlyer, has been a leader in mobile measurement and attribution since 2011 and has raised $300 million in venture capital funding to solve it. With 60,000+ integrated apps and 20 global offices, AppsFlyer is the pre-eminent attribution platform, practically synonymous with marketing measurement.

This partnership will be particularly important in gaming, where game studios are taking a hybrid approach to the blockchain: some game actions and purchases happen onchain, but some (or even most) user actions happen offchain like any other game. That presents a big problem: every Web 3 gaming dashboard has missing data around onchain revenue and user actions, presenting a very partial picture. Worse still: the more onchain a game is, the more wrong basic metrics like lifetime value are.

To date, Web 3 has broadly avoided the mobile measurement problem as much of crypto runs on desktop, but that won’t last forever. Web 3 games like BoomLand and Mighty Action Heroes are launching full mobile experiences, and that means mobile user acquisition via the usual suspects of Google, AppLovin and all the rest. Much as gaming studios have hybridized their user experience across the regular Internet and the blockchain, the attribution of the future will also be a hybrid.

With this AppsFlyer/Spindl data integration, game developers will be able to easily figure out where their mobile app installs are coming from (AppsFlyer), and how well those users are monetizing and sticking around onchain (Spindl).

This two-way integration enables developers and marketers to seamlessly send and receive data between AppsFlyer and Spindl, and into their existing data pipelines. They’ll be empowered to see their mobile in-app data alongside their on-chain Web3 metrics. This is all done while putting privacy at the forefront — prioritizing the safety of, and minimizing the movement of, customer data.

For the first time, the vast river of mobile usage and native blockchain data will be joined in an orderly and usable way, app installs merging seamlessly with every NFT sale and much else besides. This is a sign of maturity for Web 3, both needing the sort of sophisticated measurement that mobile growth requires, and being a market worth focusing on by established mobile players like AppsFlyer.

We’re live right now.

Any Appsflyer customer can start integrating with Spindl by finding us in the AppsFlyer Partner Marketplace pictured above. In the setup screen, pick the AppsFlyer events you want Spindl to join to your onchain data, and we’ll do the rest.

Reach out here, and follow us on Twitter for more crypto gaming news.

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First, there’s the room you can see through the glass—that’s just the same as our drawing room, only the things go the other way.

-Lewis Carroll, Through the Looking-Glass 
                                     and What Alice Found There

Today we’re announcing a partnership with questing platform Layer 3. A measurement platform like Spindl working actively with a publisher is a bit strange in traditional marketing, but this is part of some new, powerful Web 3 weirdness.

The traditional way Web 2 marketers think about the world—how we first built Spindl—assumes a very basic setup: an advertiser or developer is measuring where users came from and how well they monetized and how long they stuck around. It’s a view looking up from the bottom of the ‘marketing funnel’ and toward the ‘top of funnel’ of Twitter, Google, Discord, and whatever other pixelated touchpoint represents the start of the user march toward your app.

Much to our surprise, that’s not how Spindl is being used.

A large fraction of our user base is not just an app trying to figure out if Twitter works better than Discord for user growth: it’s publishers themselves looking the other way—down the marketing funnel—at the value they’re driving downstream to NFT creators, marketplaces of various flavors, and protocols.

This violates all laws of regular media physics; it’s as if gravity were suddenly a repellant rather than an attractive force. At Facebook it would have been hard to measure how much impact Facebook was having on say Walmart’s revenue, even with an onerous direct integration. To do so permissionlessly would have been inconceivable: the architecture of the Internet simply doesn’t allow for it.

Yet, we routinely do this now for Spindl’s clients, many of them questing platforms or NFT aggregators or chains, who want to know who’s implicitly dependent on the users they’re bringing onchain.

Once you start wiring the publisher to the advertiser, all sorts of interesting questions arise:

• Why isn’t that NFT collection paying me for driving buyers their way?

• If users are discovering this game on my platform, shouldn’t I be getting a cut of that user revenue?

• Conversely, if I notice that most of my users are also using some other onchain protocol, shouldn’t I be able to increase that flow of users by paying that upstream app to nudge those high-propensity users my way?

This is the user-growth flywheel that paid for the first Internet; something very much like it will pay for Web 3 consumer as well.

One of the most active partners we’ve worked with is Layer 3, a questing platform that lets developers engage with users by offering them tiered rewards for onboarding to an app. Quests have proven an effective way to drive user engagement; we’ve measured a number of them, both as a standalone campaign for a given app, and as part of Base’s launch.

One of the key challenges of Web 3 is managing fragmented identity between the Web 2 side of browsers and devices and the onchain side of ever-changing wallets. One major advantage of questing platforms, and something that positions them very favorably relative to regular media, is that they’re almost all wallet-aware. Most quest platforms require a wallet sign-in to avoid farming (doing quests only to gather rewards).

Thus, the technical integration between Layer 3 and Spindl doesn’t work through messy link clicks and client-side SDKs and all the hacky plumbing of Web 2; wallet events are fired from Layer 3 to Spindl and joined by Spindl to onchain events further down the funnel with 100% match rate. That’s both better for measurement, and much more native to Web 3 notions of data privacy.

As a result of this partnership, Layer 3 clients will be able to see the effectiveness of their Layer 3 campaigns as measured by an outside party, and with real attribution to boot (rather than assuming that any wallet touched was acquired by the quest). The advertiser may also expand that attribution to cover all their marketing channels if they choose. Layer 3 itself can use Spindl measurement to optimize their quests without an onerous client integration. What used to be a generally one-way flow of information from publisher to advertiser is now a two-way one in Web 3, a much more equitable arrangement.

At Spindl we’ve always thought that Web 3 marketing would evolve to be better, more transparent, and more fair than the tottering Web 2 advertising edifice we’ve lived inside for over two decades. This partnership with Layer 3 is a hint of that future.

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Reluctantly crouched at the starting line
Engines pumping and thumping in time
The green light flashes, the flags go up
Churning and burning, they yearn for the cup
     Cake, 'The Distance'

We at Spindl have been very excited about Base. Built on the open-source OP Stack and incubated by Coinbase, with integrations into Coinbase products, the new L2 Base is the perfect storm of consumers, functionality and blockchain infra to indeed make ‘onchain the new online.’

But how’s it doing?

Since launching to mainnet in early August, Base has seen almost 1,200,000 wallets onboard to the chain, and about half a billion dollars in tokens bridged. Dozens of projects have announced Base support (including Spindl), and the chain has taken its place alongside more established ecosystems like Arbitrum and Polygon as a place you need to deploy.

Such meteoric growth among competing dapps on a new chain presents an interesting case study for what Spindl specializes in: onchain growth measurement. It’s rare to have developers arranged at a starting line, raring to go like in the Cake song above, and then see how far they get given the various growth strategies deployed.

It’s also a showpiece for what Spindl does best: onchain measurement and attribution.

Forget for a moment the flurry of regular actions users constantly do, like page views, clicks, and game plays (all of which Spindl also tracks). Even limiting ourselves to transactions on a new blockchain, a user will transit a unique journey—mints, swaps, bridging—until landing on the virtual doorstep of your application. How did they get there, and whom do we thank for their arrival? That function is described by the oft invoked (and misused) term of ‘attribution,’ a core concern of the Spindl product.

What’s the tl;dr?

In Web 2, attribution providers like Branch or AppsFlyer would run a simple ‘last touch’ attribution model to crown the winner of the CPA (cost-per-action) bounty for the desired user action (e.g. a purchase or install). Whoever touched the user last got the prize for acquiring them, and centralized intermediaries like Facebook and Google built trillion-dollar valuations based on winning attribution showdowns. Simple as.

In Web 3, since the attribution winner will often be rewarded with an ongoing percent of user revenue, advertisers seem more comfortable with a first touch model that privileges whoever first brought in the transacting user1. If a project is running a multi-channel strategy of referrals, organic Twitter poasting, regular paid ads and whatever else the marketing person cooked up, only an attribution system can disentangle the touchpoints into something causal and actionable.

Take a relatively simple growth hack: theOnchain Summer site that Base launched to celebrate mainnet. By mapping each featured mint to an onchain action, we permissionlessly measured the efficacy of the growth campaign. Mints are on the left, and all the dApps those mints drove users to are on the right2. Spindl data shows that anotherblock and FWB were the biggest drivers of Base adoption.

Looking beyond the Onchain Summer site, we can look at all the dApps that onboarded users on Base, and do the same first-touch attribution analysis. This is any smart contract that was a user ‘first touch’ for eventual Base usage, pivoted by the downstream dApp3.

If you’re asking the ad-tech boomer question of “you mean to tell me that in a properly-attributed ads model, assuming there was some sponsored app discovery thing running, everyone on the left would be paid by everyone on the right, proportionate to the thickness of the line connecting them?”

Yes, that’s exactly what this Sankey diagram shows. Each flowing line is the attributional weight of an end user for a dApp on the right to someone on the left who first brought them onchain and eventually to that final dApp. If that leftmost NFT or dapp were an ad in Web 2 land, it’s who you’d pay for the user. This is the user acquisition graph for the most popular dApps and NFT projects, during the first three weeks of Base.

As is clear, some first-touch dApps are much better at keeping users onchain than others. Friend.tech, the viral social app, does not drive a lot of other Base usage, even as the app itself has grown in popularity (this is while still joining to the original user wallet, not just the app-specific wallet). The Friend With Benefits (FWB) mint on On Chain Summer was particularly good at driving Base users to other dapps, with a Base retention rate of 38%.

Layer 3, a questing platform, ran a collection of Base-specific quests. As you can see from the left-hand side of the Sankey above, the Layer 3 campaigns drove about as much Base usage as the Onchain Summer website itself (‘others’ was every source except Layer 3 or Onchain Summer). We’ve measured the retention and return-on-advertising-spend (ROAS) of Layer 3 quests before, and have shown they can be an effective user acquisition mechanism.

There will clearly be a role for third-party publishers to permissionlessly (and gainfully) onboard new users onchain. Right now however, with the possible exception of quests, the onchain ecosystem has a serious ‘publisher problem’. Even projects with marketing budget have little (if any) onchain paid media they can buy to drive growth. Like it or not, publishers like Facebook and Google were the engines for Web 2 growth, and even in decentralized form, nothing has really emerged at that scale (yet) in Web 3.

Spindl solves the measurement and referral payout problem, but there isn’t much to measure without a publisher sending users down the funnel. It’s our hope that by providing just that measurement, interesting collaborations can emerge between onchain-native publishers good at making users stick around, and apps looking to give those users something to do onchain.

Everything in the Web 3 timeline is the reverse of Web 2: infra comes before consumer adoption, intricate economics before viral usage, everything literally the reverse order of Web 2 history. It may well also be that, the reverse of Web 2, precise attribution precedes the eventual advertising models that emerge, mapping out the trails that both users (and money) followed.

To get started with Spindl analytics and attribution, contact us.

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Today, Base mainnet is open for everyone. This is a big, big deal for those who think ‘onchain is the new online.’

This is more than the launch of another chain in a crypto world that has (too) many. Base, incubated by Coinbase, aims to offer Web 3 builders something unique: integrations with Coinbase products, ability to serve users in the Coinbase ecosystem, and finally, a low-fee L2 environment built on the open-source OP stack. It aims to provide developers with a robust platform to (finally) drive breakout Web 3 consumer growth for any dapp. We predict Base will succeed as the new place to build everything from defi to gaming, and will be focusing, along with many other builders, on Base during ‘Onchain Summer’.

What small but important role does Spindl play in this new drama?

When we set out to build Spindl as Web 3’s first real attribution platform, we assumed that (as in Web 2) our principal clients would be developers and advertisers figuring out where users came from and how long they stuck around. In other words, it would be builders looking ‘up funnel’ from the bottom of the funnel, where monetization really happens (which just so happens to be onchain).

As an example of that core use case (and a way to dip our toe in Base), we did a gaming case study with ThirdWeb deployed on Base testnet. This is the canonical Spindl measurement use case: ingesting onchain data, we can visualize user dynamics, like cohort retention, with (near) zero integration on the developer’s part.

After dozens of project onboardings and client integrations, we’ve found that Spindl users actually run the gamut from chains, to wallets, to NFT aggregators, to DEXes to onchain games. Everyone wants a seamless and unified user funnel. That’s true whether it’s a DeFi or NFT aggregator looking down-funnel at which trades users made or NFTs they bought, or up-funnel at which quests drove real user engagement for an options protocol.

Take this (unpublished) case study we did on Coinbase Quests: aside from the usual monetization measurement, we looked at the chain impact of running quests. The audience for measurement in a convoluted tangle of players like in the Base ecosystem includes everything from quest publisher to wallet to dapp to chain…and Spindl measurement can inform all of them.

The launch of Base is an onchain measurement nerd’s delight: we’ll have a slew of case studies and dashboards emerge over the next few weeks as we help Base builders scale their dapps, figuring out what works and what doesn’t. We plan on counting each and every new Base user.

If you’d like to discuss how Spindl can help you measure your growth and user acquisition on Base, let’s talk.

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They will be like a tree planted by the water
    that sends out its roots by the stream.
It has no worries in a year of drought
    and never fails to bear fruit.

-Jeremiah 17:8

The public narrative about Web 2 is that it all exploded with organic and unstoppable virality. In reality, much of that consumer adoption was accomplished via ‘growth marketers’ who found ways to offer the right product to the right user at the right time, and then keep them happily using that same product.

For onchain to be the next online, there must be a reliable way for legit developers to drive usage of their products in an ethical and scalable way that plays well with Web 3 expectations around privacy. There must be a way to input $100 into a Web 3 growth machine, and get out more than that in revenue (or a desired number of active users). Marketing can rarely make up for a bad product, but even a good product isn’t guaranteed to win with bad (or non-existent) marketing.

To date, Web 3 projects looking to grow have had few options: NFT drops that go ignored, token rewards that often draw mercenary users, influencer campaigns of dubious impact. Assuming impact can even be measured: Most Web 3 marketers make do with legacy Web 2 tools or very non-actionable Dune queries. Without proper measurement, marketing becomes a media crap shoot no better than highway billboards, and even the smartest marketers can do no better than spray and pray.

Serotonin and Spindl are setting out to change all this.

Roughly 10 months ago, Spindl set out to solve the attribution and measurement side of the problem, and we’ve mostly done that. Using Spindl, a marketer can generate a shareable link or instrument their app with a client-side SDK, and then understand where users came from and how well they monetized onchain. This all seamlessly works across Web 2 and Web 3, mobile and desktop, fiat and crypto, with one combined picture of the user. They can also reward the user, and whoever referred the user to the app, all natively onchain.

But technology isn’t enough.

We are routinely asked by projects looking to increase their usage about the best practices right now, which media works and doesn’t, and how to best increase the usage they can finally measure. Sometimes we’re even asked to submit DAO proposals ourselves for a user growth budget, the very odd and Web 3-specific way that some projects fund their marketing.

Our go-to line here is: We build the race car, but you or someone else has to drive it. For us, that someone else has often been Serotonin, a full-service media agency handling everything from PR to conferences to branding to the most numbers-driven growth marketing in Web 3.

After working closely with Serotonin on a number of client campaigns—making sure we measured client revenue correctly, thinking of the best user incentives, building yet more data infra to capture yet more channels—we realized this needed to be a tighter partnership to actually work. Serotonin provides the market-wide visibility and operational excellence to actually run campaigns; Spindl provides the necessary measurement technology to make data-driven marketing possible.

Today we’re announcing that Serotonin and Spindl have signed a partnership agreement: Spindl will work even closer with Serotonin and for Serotonin’s clients. What drove this was partly complimentary interests—Serotonin gets the best Web 3 measurement, as well as dedicated technical support; Spindl gets a book of new business—but also something else.

Both Serotonin and Spindl agree on what the future of Web 3 marketing looks like, and that’s something like the rev-share model of Web 3 referrals (which we half-seriously call CPV). Rather than paying for media in legacy models like CPM (cost per ad impression) and worrying about proxy metrics like clickthrough rate, which feels to this ad tech boomer like a very 2010 conversation, we both think more crypto-native models should be applied to all media buying. Rather than relive 10+ years of marketing history on the Web 2 side, going from untargeted and unmeasured traffic to carefully-measured performance, we should start building that correct end state right now.

Both Serotonin and Spindl believe that marketing will be far more complex and sophisticated, and ultimately more fair and decentralized, on the blockchain than in the legacy Web. But that will only happen if we build both the business models and technology the right way.

With this new partnership, that process starts now.

Reach out to Serotonin to get your growth engine running, or reach out to us directly about onchain analytics, measurement and attribution.

The tools which I contemplate are similar to an engraving on copper plate from which may be taken a great number of impressions exactly alike.

                -Eli Whitney, inventor of interchangeable parts

The pioneer in what we now call internet analytics was a company called Urchin1 (rebranded as ‘Google Analytics’ following their acquisition), which was started by an underfunded and ragtag crew more typical do the late 1990s startup scene, way before million-dollar ‘seed’ rounds and MBAs bloviating on LinkedIn.

The state of the Web was then so crude, that analytics packages like Urchin sucked in the logs of the web server to figure out what users were doing on a website, threading together the HTTP GET requests to generate the user journey (they also started using the then recently-invented javascript as soon as they could).

Attribution and user measurement barely existed at all, as most sales didn’t happen online, and anyhow there was no way to feed that result into that period’s primitive ad networks. Instead, you had ‘analytics’: the measurement of what the user did on your website, with some crude notion of user identity, tied to recently-invented cookies, and that’s about it.

Web 3 is in a similarly nascent state.

How Spindl does attribution (and soon, analytics) is analogous to Urchin ingesting server logs: we index subgraphs of the relevant blockchain, threading together events to generate a coherent user journey. In the same way that Urchin/Google Analytics combined server logs with a smattering of client-side events, Spindl ingests both onchain Web 3 and off-chain Web 2 events as an input to attribution, dashboarding, and everything else.

Onboarding a new attribution client at Spindl is relatively effortless to the developer or advertiser—often they have no code to integrate at all—but can be onerous to Spindl. We have to map their real-world business—game-play actions or complex financial transactions—to what’s happening on their deployed smart-contracts. Given the embryonic state of smart-contract development and the lack of standards there, that can often be a data science puzzle that takes many hours to decipher.

Infrastructure providers like thirdweb change that entire dynamic. By providing their clients with a standard and comprehensive menu of smart contracts, not only is it much easier for developers to build onchain, it’s also much easier for companies like Spindl to work with those developers.

Another Google Analytics analogy presents itself here: you know how when you set up a new Wordpress or Webflow site, the CMS asks you for your Google Analytics ID (often of the form UA-XXXXX2)? And it all somehow magically works, because Wordpress automatically fires all the right Google events at every point in the website, and your analytics just work by default? That’s exactly what’s like to use thirdweb and Spindl together: we’ll know where all the important events in your smart contracts are happening, and we can just ingest them by default.

In order to demonstrate the ease of ingesting a thirdweb app on Spindl, we did a quick little hackathon around a game they developed in a quick, little hackathon: Web 3 Warriors. Combining thirdweb’s GamingKit, and the Unity SDK, a couple of thirdweb developers hacked up a perfectly playable game with onchain elements like wallet integration, gasless transactions, and skinned in-game NFTs. Their technical walkthrough, complete with code examples, is here.

Completely permissionlessly, we built a Spindl dashboard using only standard thirdweb contracts as a guide, calculating core metrics like retention, LTV, ARPU, and revenue splits among game actions, all without any help from thirdweb other than polite encouragement.

It was trivial to chart the game’s DAUs, mints, revenue, and game count through time (given it as a hackathon project, usage slowly died after launch).

Whether users were minting the $BATTLE token, or buying armor or weapons, by using a thirdweb smart contract, developers get a suite of tools (including Spindl) essentially out of the box.

Monetization metrics like ARPUs were also simple to calculate (units are in the in-game currency), again thanks to thirdweb’s standard library of contracts.

After a a decent amount of early adoption, users churned out after the game’s novelty and the media cycle waned (without active re-engagement, most apps suffer debilitating churn).

There’s of course a third player in this analysis: Base, the new L2 incubated by Coinbase. How did they fare?3

The game generated about 1.6 Eth of Base transactions, and about 1 Eth in L1/Ethereum transactions (the fee split over time is interesting in its volatility). The transaction plot mirrored the usage plot more or less, as you’d expect.

A Spindl dashboard for Base, instead of having metrics by inbound channel like a typical attribution graph, would have these same metrics by pivoted by developer. We founded Spindl thinking it would be mostly developers trying to quantify their marketing channels; instead, we’ve had everyone from NFT marketplaces to Defi bridges asking where they’re sending users and value across the blockchain. Ultimately, everyone is a slice of the user journey, looking either upstream or downstream (or both).

thirdweb and standardized contracts made this very easy.

Eventually however, just like Urchin ingesting server logs now seems like a throwback to a cruder era, this business of Spindl chasing around events onchain to figure out the relevant ones will be considered primitive and anachronistic. Smart-contract developers will one day emit attribution events from their onchain transactions, just like mobile developers fire events via SDKs to their Web 2 attribution platforms like AppsFlyer.

Doing so will be an integral part of shipping to mainnet for any developer worried about growth; the marketing machinery simply won’t work without it. Infrastructure providers like thirdweb will code attribution into their contracts as a matter of course, just like Wordpress includes Google Analytics by default. Before that happens though, Spindl and other Web 3 marketing companies will have to prove the value of doing so to developers. “It’s early.”

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Almost exactly a year ago, venture capitalist Tom Tunguz published a prescient blog post where he predicted that the next big development in Web 3 would be the birth and development of a native marketing stack. ‘Stack’ here is being used in the technical sense of vertically-integrated layers of technology that interoperate to create a complex system; the TCP/IP stack that the Internet runs on is a good example.

Topologically though, the interoperating technologies that made web 2 marketing into a billion-dollar machine resembles more of a network of functional boxes. Users and human attention make their way (or are nudged) across this network, being progressively transmuted into revenue and engagement inside products and applications. The learnings from that user voyage—who likes our product? how much does it cost to acquire them? where are they spending time?—are then fed into another turn of the user-acquisition crank, creating a never-ending flywheel that props up the value of trillion-dollar companies like Google and Facebook.

Tunguz’s thesis (and Addressable’s and Spindl’s) is that a similar stack will soon take shape in the blockchain-centric world of Web 3. While the functional boxes might be labeled the same as before (‘attribution’ and ’ad network’) their actual implementation would vary radically from the Web 2 world.

Rather than attribution platforms like Branch or AppsFlyer ingesting or disgorging billions of events a day from countless apps and publishers—an enormously wasteful burden—everyone would use a blockchain as the common reference database. Ads, previously annoying squares of distracting content co-appearing with real content, would assume novel forms like NFT mints, airdropped rewards, app discovery inside wallets, or just the very decentralized chatter of high-follower influencers.

Rather than having Facebook or Google sitting in the middle and extracting much of the value, the decentralized Web and its clever consensus mechanisms will push the value to the edges, to users and creators and independent app developers. The need for creators or developers to attract users never goes away; it only changes into better or worse forms. Web 3 has the ability and incentive to create a vastly more fair, transparent, and open system of user growth than ever existed in Web 21: We aim to build much of that system ourselves.

Today we’re announcing a partnership between two leading Web 3 marketing companies: Addressable and Spindl.

Addressable solves the increasingly urgent ‘publisher problem’ in Web 3, whereby legit protocols and apps have trouble reaching interested audiences of users. The blockchain provides an unprecedented database where both users and builders can share information about each other in an open and permissionless way. But without a way to scalably reach users about new products and protocols, that data can be sliced and diced forever, completely uselessly. Web 3 is full of various ‘CRM’ and ‘analytics’ tools that make for pretty demoware, but are otherwise pretty non-actionable. Addressable changes that, making an audience an actionable segment that builders can reach in a repeatable way. There’s nothing like it in Web 3 today.

Spindl solves the complimentary problem to Addressable: once you bring in users from an Addressable campaign (or any online channel), how well are they monetizing and how long are they sticking around? Also, where’d they come from? Already, Web 3 is a multi-channel world where developers run a Twitter thread alongside a Discord campaign alongside a referral program. How do you figure out which is contributing to new user growth and/or existing user engagement? The technology that decides all that is called ‘attribution’ and Spindl has about the only functional version of it in Web 3. We also have the only referral and user rewards product that runs on complex user incentives like staking for set time periods, buying and holding NFTs, or really any goal you can think of.

Both companies will still be run and staffed independently: this is a product merger not a corporate one. If advertisers want to use Addressable’s audience segmentation and ads-buying tools without on-chain attribution from Spindl, they’re absolutely free to do so. Likewise, builders who want on-chain measurement and rewards without the audience and ads part, you can use Spindl as it is today.

Together though, the combined Addressable/Spindl product will be the first truly usable user-acquisition platform in Web 3: create your audience, find them online, measure their performance, and reward them natively on-chain….all in one unified experience. There’s nothing like this in Web 3 right now, and while we’re the first functional boxes coming together on that Tunguz map, both Addressable and Spindl hope the marketing stack develops even faster and further this coming year. Web 3 won’t succeed without it.

Follow Addressable here, and Spindl here.

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This first stage of the mythological journey — which we have designated the ‘call to adventure’ — signifies that destiny has summoned the hero and transferred his spiritual center of gravity from within the pale of his society to a zone unknown.

Joseph Campbell, The Hero with a Thousand Faces

A subject of continual amusement in Web 3 is how much of it is both incredibly novel, and a complete rerun of similar mechanics in Web 2.

Take questing, for example, or ‘offer walls’ as they’d be known to anyone who works in Web 2 gaming: Publishers like Layer 3 or Rabbithole or Galxe offer a destination for current or potential Web 3 users to collect points and rewards for engagement with Web 3 protocols. These quests (‘offers’ are slightly more descriptive if less heroic) are virtual goods giveaways: sometimes tradable stuff like tokens, often just questing ‘points’ within the platform. The quest’s challenges—they’re usually a sequence of steps—are often something simple like connecting to Twitter (thus revealing the user’s Twitter handle, much like retail loyalty programs ask for a phone number). Sometimes it’s more complex and meaningful like swapping or bridging funds into a certain token or protocol, a real first-step to using the end product.

By incentivizing that initial taste of a dApp, game, or protocol, the questing platforms (and their clients) hope to draw long-term users into the experience. The questing platforms charge for the campaign much like Facebook or Google charge for ads, though the business models are somewhat different. Most ads campaigns these days are CPA (cost per action), while quests charge either on a per-campaign or per-completed-quest basis. Whatever the model, if there’s a customer acquisition cost (CAC), then there’s a return on advertising spend (ROAS) that one can use to judge the questing campaign.

To date, nobody has been able to really measure questing ROAS because Web 3 has been devoid of real cross-Web 2/Web3 measurement. Spindl fixes this, providing an easy way for advertisers to quantify metrics like monetization and retention for any inbound channel: Twitter, Telegram, Discord, quests, whatever.

The Case Study

In this case study, Lyra, a decentralized options-trading protocol, already uses Spindl to measure their user retention and monetization from all channels. Though embryonic, Web 3 marketing is already ‘omni-channel’ in that marketers use multiple strategies operating in tandem and measured side-by-side. A channel that doesn’t show up in the attribution dashboard essentially doesn’t exist from the marketer’s POV. Here, we can see Lyra’s inbound channels, measured by users who generate more than $50 options premium (Lyra’s unique active-user definition).

Spindl worked with Layer 3 directly, who provided us the wallet IDs of the users that participated in their quest. One aspect of quests are unique to Web 3 and potentially very powerful: Because users sign in with wallets on the questing site (both to collect rewards and as an anti-Sybil measure), quests are some of the biggest ‘wallet aware’ publishers around. That’s both more respectful of Web 3 privacy—people are cool with on-chain data being public—and much easier from the attribution perspective. We don’t have to muck around with legacy Web 2 events like clicks and pageviews or transient and invasive forms of identity like cookies. (Yes, we’re turning this into its own product; more soon.)

Even with the identity problem solved via wallets, this is somewhat trickier than it might sound, as a priori we have no idea what incremental usage the Layer 3 quest actually drove. Was it really the questing platform, or did that user actually first come in via Twitter or Telegram?

Note: The plot above isn’t simply the aggregated stats from a simplistic Google Analytics-like approach that looks at link URL parameters, nor is it simply running a Dune query with those wallet IDs (and assuming all engagement came from the quest). No, it’s the output of a consistent attribution model that evaluates all the events leading up to the user monetization event, and judging which one drove the incremental value. As with quests themselves, this is a reboot of the attribution function in the Web 2 space, but fully adapted to the Web 3 context.

Show me the numbers

So did the numbers work out?

In short, yes, the quest campaign was ROAS positive, to the tune of 1.88x or so. In human terms, that means for every dollar you put into the quest, you got $1.88 back…a success.

As a comp, this is about what you’d get for a healthy Facebook campaign nowadays. Given the absolute bloodbath that Web 3 marketing tools like token drops typically are, this is a big success. Coupled to accurate measurement, designers of quests (typically the platforms themselves, sometimes working with the advertiser) will have much more data with which to optimize their campaigns.

Some more numbers from the Lyra/Layer 3 campaign:

Layer 3 generated around $450,000 in trading premium for Lyra, or about 8% of all premium generated by Lyra during that time. Much of that went to pay LPs, with the balance returned as fees (i.e. profit) to the protocol. Our ROAS number correctly accounts for all the LP and hedging costs of those trading premiums, and is based only on net profit to the protocol. User-wise, Layer 3 engaged a total of 2105 wallets, with just over half being new users who had never touched Lyra before.

While retention was below that of Lyra users in general, it’s typically true that paid media drives less monetizing and retaining users than organic media in general. You’d see the same in the split between Facebook Ads-acquired users and organic ones. It’s not surprising you’d see the same in Web 3, particularly with an ad format and targeting that are still in the very nascent stages. If we’re on day one of Web 3 marketing, and we’re hitting current FB-level ROAS, it’s a good sign for the ecosystem.

For now, Spindl will continue to work with Web 3 publishers like Layer 3 to measure their downstream value to advertisers like Lyra, and (very importantly) compare it accurately to all marketing channels. Web 3 marketing is basic now, but it won’t stay basic for long. Soon enough, nobody will be looking at makeshift Dune queries or single-channel analytics to judge the value of a growth campaign. It’s a startup cliché that you make what you measure. For too long Web 3 marketers haven’t measured much of anything. Now they can.

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Each moment is the fruit of forty thousand years. 
       -Thomas Wolfe, Look Homeward Angel

“Tell them I sent you.”

The word-of-mouth referral system of the IRL analog world of retail stores and handshakes has been blown up by the Internet. The measurability of digital media, made possible by all sorts of hacky URL schemas and front-end code machinery, means the exact point a buyer was made aware of a product can be known (and rewarded). Double-digit billions and percents-of-sale now flow through affiliate programs, powering both retailers like Amazon and publishers like WireCutter.

In the Defi world, referrals and user rewards have emerged as the primary channels for user growth, given both the lack of native Web 3 targetable media and a general disinclination (or inability) of Defi projects to just shovel money at Facebook and Google. The model was pioneered by major Defi player GMX, which currently offers 15% rev-share rebates to the referrer, and 10% rebate rewards to referred traders for their highest volume tier. A crypto-focused publisher like CoinGecko is earning around $400,000 in referral rewards on GMX, from Arbitrum alone. And that’s from a referral link that’s practically buried on their website: a proper call-to-action (targeted to relevant users) would surely earn far more.

How Web 3 referrals differ than regular Internet affiliate models is that they follow the CPV business model: the referrer kickback isn’t a set bounty, or even a fraction of a given sale…it’s typically a percentage of all user revenue forever1. The business of advertisers paying out on lifetime revenue is only possible due to the uniquely global and shared nature of the blockchain: it would be hard to engineer in Web 2, and anyhow there’d be a trust issue with marketers able to shortchange affiliates by undercounting user value.

The blockchain serves as both common database and honesty-enforcing visibility, as well as permissionless transaction layer. CoinGecko doesn’t need to do some custom deal via steak dinners and salespeople to get GMX’s user-growth budget: the decentralized computer handles the bookkeeping and payment (with potentially a bit of help from an attribution system).

Acquisition costs in Web 3, unlike Web 2, aren’t one-time discrete costs for an acquired user: they’re effectively rent you’re paying on that user’s ongoing monetization, either to the referrer ‘landlord’ or the user themselves in the form of rebates. In this sense, Web 3 referral and reward programs resemble conventional loyalty programs more than Google or Facebook ads.

The differences with Web 2 don’t stop there. We’re using the term ‘referrers’ here in the conventional sense of an affiliate marketer, but in the decentralized world of Web 3, everybody is a referrer: the wallet that on-ramped your user, the questing platform that induced someone to try you out, the other game that ran your ad, the Twitter influencer who pumped you. To use the Web 2 word for it, they’re really publishers: the user-facing entities upstream of the app developer who send traffic their way2.

But which of these many upstream sources sent you the user?

Already Web 3 marketers live in a multi-channel world of Tweets and airdrops and rewards programs and Discord posts; the over-worked growth person at your Web 3 project is already trying to decide what works and what doesn’t.

A simple-minded referrals program (like most these days) which takes credit for everyone they touch, can’t measure real user monetization, and can’t be compared to other marketing efforts, is already anachronistic and too basic. That’s fine for the initial home-brewed version built by protocols, but that’s not how a mature user-growth product works.

Another limitation in current referrals products is their inability to incentivize complex on-chain behavior. Referral programs get Sybil-ed (i.e. fraudulently farmed) as much as any crypto rewards program, with attackers doing simple on-chain actions to collect kickbacks. Real measurement is the key to defeating Sybil attacks: by only rewarding real revenue-generating events, or actual protocol usage (e.g. staking so much token for so long), you avoid the easy farming that has plagued crypto for so long.

Together, attribution and measurement correctly credit the right referrer, filter out Sybils, and make sure to incentivize desired user behaviors. Without both attribution and measurement, you’re firing tokens out of cannons and hoping the resulting BOOM! lasts long enough to attract a few real users. It’s worse than Super Bowl ads and about as expensive.

What money Web 3 protocols do have to burn (hopefully fruitfully) on user acquisition is also typically locked up in native tokens on-chain. Happily, Web 3 natives simply don’t have the habit of shoveling money at Google and Facebook; their growth budget is controlled by a DAO, and subject to a governance vote. Thus, any rewards/referrals program must exist natively on-chain and accept WhateverCoin as the native currency. Which is why every Spindl referral campaign, like the one in the UI above, is a smart contract tightly coupled to our attribution product, ready to dole out tightly-measured rewards.

Eventually, it won’t just be crypto influencers and whales earning referral rewards; it’ll be Web publishers, quests, wallets, ad networks and anyone else. The promise of the blockchain is pushing value to the edges, to the actual publishers and creators and developers themselves. By correctly measuring everyone’s contribution to user growth, we can build a media economy much more inline with those Web 3 values of decentralization and transparency.

Technical docs on the on-chain referral system here.

To run a referral campaign yourself: contact@spindl.xyz or DM us here.

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