“You know you’re priced right when your customers complain—but buy anyway.” - John Harrison
Price:
Challengers can undercut you.
Loyalty to price not your product
Innovation:
Pushes & grows the space.
Loyalty to quality of your product.
Mint Link: Price Shrinks, Innovation Grows
There’s been a lot of talk about “PRICE” in crypto this week.
Solana flipped Ethereum DEX & NFT daily volume for the first time in history.
The lower price on Solana is used as a key reason for this win.
But is price a meme? Do crypto degens or future retail mass market care?
The assumption that this flipping of volume/users will remain sticky relies on “price” remaining low and competitors doing nothing to win back consumers.
A “low cost” pricing strategy has no moat because there is no loyalty from price sensitive consumers; price is not a moat.
When anchoring to a “low price” strategy you open yourself to competitors who can do similar things at even cheaper prices, deliver the service in a more convenient way, or better quality version at the same price.
There is no loyalty from price sensitive consumers; price is not a moat.
Previously Ethereum was going to be permanently flipped by BSC, the centralized chain run by Binance crypto exchange, because it was faster and cheaper but it did not last. Instead of panicking about price Ethereum remained focused on improving the network and innovations which helped it win out over BSC.
Ethereum L1 is leaving the pricing strategy to the L2s to solve.
Competition for L2 market share has gotten intense and these solutions are being stress tested to match the scale, speed, and price efficiency of Solana. ETH L1 focuses on other innovation & growth angles.
In my view the current Solana strength was due to airdrop injecting liquidity into the Solana ecosystem which kicked-off meme coin mania.
While many Ethereum degens liquidity has been tied up on BLAST L2 or other plays that meant volume was flat. Leading to a temporary flipping of volume that will not last for the long term but does signal the staying power of Solana as a chain being a key player in the upcoming bull market.
Excited to have more chains and focusing on Innovation over “price” to help fuel better quality user experiences in crypto.