Market Analysis

The Cryptocurrency Market

The cryptocurrency market has been growing since the first bitcoin block was mined. Though there have been ups and downs in price, adoption is ever increasing, and there are no signs that this is slowing down. With institutional investors coming on board in the West, and heavy adoption across emerging markets, crypto appears to have a strong future.

As of 2021, there was an estimated global crypto ownership of 3.9%, with more than 300M users.[1] By the end of that same year, the total market cap had reached a high of $2.5T, closing out at $2.0T. [2] Some reports from 2020 estimated a CAGR between 11.1% and 30% over the next several years, though their estimations seem to have been too conservative based on today’s numbers. [3, 4]

Chainalysis states that by the end of Q2 2021, global crypto adoption had grown by over 2300% since Q3 2019, and over 881% in one year. [5] The reasons for increased adoption differ depending on geographic location.

In emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions; in North America, Western Europe, and Eastern Asia, by contrast, adoption over the last year has been driven largely by institutional investment. [5]

Owners Demographics as of early 2021 were as follows: [1]

• 79% male, 21% female

• 58% are aged under 34

• 82% have a Bachelor’s degree or higher

• 36% have an annual income over US$100k

Walmart is getting into the space, Google has created a blockchain division, the U.S. government is starting to get serious about the digital dollar. All of this points to the fact that this is a nascent technology that will be as ubiquitous as the Internet, probably within a decade. Paideia intends to be ahead of that growth curve.

Potential Market Growth

Cardano grew from just over 100k wallets to just under 1M in 2021 [6], without any defi, and no smart contract support, which it now has. Ergo reached 100k wallets in Q1 of 2022 [7], and since then the ecosystem has produced a significant number of functional DeFi tools. On one single day, the official Ergo wallet had 13000 downloads [8]. A similar growth trajectory as Cardano would indicate an exponential increase in use and investment in Ergo in 2023. Cardano is also still growing quickly. According to Messari [9]:

• ADA’s market cap rose by 54% QoQ from $8.6 billion to $13.2 billion. This increase moved Cardano from the 9th to the 7th largest network by market cap.

• TVL increased 172% QoQ from $50.8 million to $138.3 million. This increase is driven by both established protocols, such as MinSwap, and newer protocols, such as Liqwid Finance.

• Indigo’s IUSD and Djed’s DJED stablecoins drove total stablecoin value up 261% QoQ. These stablecoins and their adoption were also a catalyst for the overall TVL increase.

At the time of writing, Ergo has a market cap of $166M. If Ergo were to capture even 1% of Ethereum’s market share, that would place it at a market cap of $3.15B, which is an 18x growth in value.

User Base

Cryptocurrency has broad market segments, as anyone who has access to a cell phone or computer can use crypto in some way in their day-to-day lives. Some of the market segments include day-traders, long-term investors, miners, developers, gamers, shopkeepers (someone who sells goods or services for crypto), and fund managers.

The platform will be marketed not just to developers, but also to individuals who are less technically minded but who want to create an organization. Paideia will be designed so that the end-user does not need to know how the blockchain works or why it was chosen as the underlying technology behind the platform.

Primary Users

The primary user of Paideia who will create a DAO will be someone looking to launch a crypto project, and raise funds from the community to aid in the development of that project. Often this will be someone who has some development experience, but that’s not necessarily always true. The typical user will likely be entrepreneurial, and will be focused on marketing and building their project. If they needed to focus on writing code to manage their DAO and distribute their tokens, it would take time away from their own project.

The Paideia toolset will remove this barrier to entry, allowing users to focus on marketing and developing their products. In addition, creators and entrepreneurs will appreciate the low fees, as starting a comparable project using Ethereum based DAO toolsets costs upwards of $1500 in gas fees before you even distribute the tokens.

The primary user who will vote and discuss proposals in Paideia will be crypto speculators of any kind, whether they are long-term investors or day-traders or anything in between, if they are interested in investing in a project that launches with a DAO behind it, they will be the primary target user for Paideia. These users will appreciate the ability to discuss proposals directly on the platform, and the ease of submitting votes to the blockchain with minimal fees.

Secondary Users

In addition to these primary users, we have identified some secondary users that will be able to take advantage of Paideia’s tools:

Organizations of any kind that want to share governance with a group, including people who haven’t used blockchain before, if the barriers to entry remain low. For example, a hobby club that wants to rent a collective space could pool their funds using the Paideia toolset and vote on expenditures.

Startups that have VC funding and need a simple way to manage it could submit their funds and create a voting token for the executive team, allowing different directors to propose fund uses. For example, a marketing director could request some funds for a marketing campaign, outlining all the details, and this could be voted on by the approved directors. Then, the funds would be released and the invoices could be shared directly on the Paideia platform.

Developer groups that need to share raised funds could use the toolset to manage their funds, making a proposal for things like hosting services, software purchases necessary for group development, etc.

Projects that want to kickstart funding from the community, and potentially need a tool to discover the fair market price could use Paideia’s interactive token offering system where price discovery would take place based on market demand.

Investment groups that want to pool resources to invest in higher staking tiers or meet minimum investment requirements that they cannot meet as individuals could use the toolset to send funds to those blockchain projects, ensuring all stakeholders received their fair dues. The proposals could reserve funds and pay out based on smart contracts. This would mean the group would not need to rely on an individual to manage a shared wallet, and would prevent any individual from taking the pooled funds for themselves.

P2E gaming guilds could pool resources to buy an expensive character or upgrade in a game. If they work shifts to earn funds, they could manage the distribution of those resources with the Paideia platform.