TL;DR: Building an ecosystem is challenging – especially when it is still at its nascent stage. Our most recent Twitter Space featured Erik Ashdown, Covalent’s Head of Ecosystem Growth who breaks down the ecosystem growth in little pieces. He touches multiple facets of the Web 3 ecosystem from what it is, how to scale from the ground up, what chops you need, who the key players are, and how we at Covalent have been building the ecosystem.
There are multiple ways to grow the ecosystem but we have found the recommended strategies the most efficient and effective. These strategies stand at the intersection of collaboration, innovation, and creating value.
1. It’s All About People
The foundational pieces of an ecosystem starts with getting the right people. For example, the Web 3 space works differently than Web 2. There are terms and job titles in crypto that don’t generally apply to the outside world until you get to a certain scale. For instance, a crypto community manager or an ecosystem lead are titles only heard in the blockchain ecosystem. In the traditional world, it might be strategy or business development. Once you find these people, the objective needs to be – to keep everyone happy. For example, we at Covalent serve many DApps, blockchains, node infrastructure providers, and our # 1 goal is to make sure they are getting value out of the services.
In most cases, it’s not the winner taking all; it’s the winner taking some. So what we see in starting an ecosystem comes down to – how do you make sure you contribute to everyone’s growth to the best of your ability.
2. Building the narrative
One of the most important things to scale an ecosystem is creating a compelling narrative for the project. The story needs to address the wider community at large and all the stakeholders involved. A strong narrative brings the people together who have a shared vision and truthfully conveys the purpose of the project’s existence.
This starts by answering two important questions: 1. Why do we exist? & 2. What value do we bring to the table?
At Covalent, we position our offering as One Unified API. One Billion Possibilities.
We believe our product is much more than the unified API access we provide to our customers in that we provide:
- One Billion unbanked people accessing and understanding DeFi services .
- One Billion dApps being built across DeFi, NFTs, DAOs, and Social tokens.
- One Billion traditional processes integrating or merging with decentralized payments.
- One Billion smiles across the community.
3. Going Multichain
A multi-chain world is inevitable. One has to look at the world of databases and see dozens of databases with billions of dollars of value being built atop. There are relational, key-value, graph, and time-series databases - basically a database for each use-case. The blockchain world will look the same - with each blockchain capturing a unique use-case that is specialized for. You can see this play out as games; for example, they are migrating to Polygon because of its faster block times and cheap gas.
Going multi-chain opens up a can of worms. The first problem is how the assets on Ethereum physically move to the other blockchains. Sushiswap is one of the most aggressive consumer-focused DeFi projects going multichain. They started their journey on Ethereum and have expanded to 9 other chains already. Avalanche and Fantom ecosystems are other top examples of chains where DApps are being onboarded at a faster pace. To grow the ecosystem, one needs to consider how to take the best parts of these chains and utilize them in the best way possible.
4. Creating Opportunity
Creating an opportunity for everyone binds the Web 3 ecosystem together.
Developers: One of the most dominant roles in the Web 3 world is played by developers. The best way to engage them is to run hackathons. Covalent was born out of a hackathon and we keep engaging in multiple hackathons at any given time.
Community: There are dozens of tokenized communities and ambassador programs that people can participate in and add value in a meaningful way. At Covalent, we have our Alchemist Program that has amassed over 2500 members.
Projects: Startups have access to hundreds of grants across different blockchain networks. Top projects like Compound, Uniswap, Aave are actively nurturing projects with buzzing ideas.
Ultimately, building an ecosystem is a collaborative effort and if we decompose it into the granular aspects we will see greater adoption across the board.
Covalent leverages big-data technologies to create meaning from hundreds of billions of data points, delivering actionable insights to investors and allowing developers to allocate resources to higher-utility goals within their organization. Instead of pain-stakingly sourcing data from a small handful of chains, Covalent aggregates information from across dozens of sources including nodes, chains and data feeds. The Covalent API then sources end users with individualized data by wallet, including current and historical investment performance across all types of digital assets. Most importantly, Covalent returns this data in a rapid and consistent manner, incorporating all relevant data within one API interface.