Variant Fund Founder's Perspective: Bypass Centralized Platform Gateways, Go Directly to Where Wallets Are
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Variant Fund Founder's Perspective: Bypass Centralized Platform Gateways, Go Directly to Where Wallets Are
In 2024, for a product's go-to-market strategy, consider going where the wallets are.
Navigating Web3 tides with focused insightsAuthor: Jesse Walden
Translation: TechFlow
Jesse Walden is a former partner at A16Z and the founder and investor at Variant Fund.
In his recent blog post, he introduced a concept called "headless marketplace"—in today's crypto markets, applications operate not through traditional centralized platforms, but directly within users' digital wallets or decentralized identity systems, streamlining transaction processes and leveraging existing user networks.
Go to the "headless marketplace," go where users' wallets are.
Composability has long been crypto’s holy grail, and we’re on the edge of its explosive growth. The reason? A new market strategy may have just become viable for founders: go where the wallets are, and build a headless marketplace.
A headless marketplace leverages global, on-chain identities, money, and data while distributing locally—wherever users’ wallets happen to be (e.g., in a Telegram group chat or a Farcaster feed).
Ever since major social platforms cut off API/platform access, launching a new app or marketplace required near-miraculous distribution breakthroughs. The rise of decentralized social protocols and wallet infrastructure could make this much easier.
This is because it’s now possible to reach users where they already are, without worrying about platform risk. And most importantly, since decentralized social networks use crypto wallets for authentication, your app can now leverage users’ existing identities, funds, and data.
Historically, most marketplaces were destinations. Users had to visit a website or open an app, sign up for a new account, enter credit card details, personal information, etc. With headless marketplaces, the destination can be a wallet inside any app users are already using—dramatically reducing transaction friction.
About a week ago, I wrote a thread on this topic and used Bountycaster as an early example of a headless marketplace: a great case is Bountycaster (on Farcaster), which uses the social network for “local” distribution. By tagging the Bountycaster bot in a feed post, users can participate in a global talent or bounty marketplace. Anyone can build an interface to view or trade market liquidity (some already have), but users don’t need to go anywhere—they can participate right within their Warpcast feed.
Since then, Farcaster has launched Frames. Frames use Facebook’s OpenGraph standard to allow third-party developers to build mini-applications. These apps can pass signed messages from a Farcaster user’s wallet, enabling arbitrary, structured interactions with third-party apps directly from the source. Taking Bountycaster as an example, an upcoming Bountycaster Frame will let users bid on bounties or fund them directly from embedded programs in their social feeds.
For founders, the key takeaway is that you now have the ability to directly leverage existing user attention, engagement, identity, and data for your go-to-market strategy—just as Zynga once did on Facebook. Only this time, users’ money will also be there, and their identity and data cannot be abruptly taken away.
When new go-to-market strategies become clear, waves of innovation and opportunity often follow. In 2024, consider building your product where the wallets are.
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