Blockchain ecosystems have a problem: interoperability and decentralization mean user participation and assets move freely. How then do platforms incentivize users to lock in their assets, fostering network security and participation?
The answer: staking models.
Tech companies, in particular the SaaS industry, faced a similar challenge. Users were routinely canceling their subscriptions and jumping ship to other platforms. Customer churn became the norm. Replacing customer support, customer success worked to ensure users saw a genuine return on their subscription, reducing churn.
These two concepts go hand in hand. Blockchain platforms can guarantee sustained engagement, trust, and growth by aligning staking rewards with user-centric values and support. In this analysis, we’ll delve into various staking models, contrasting their features with core CS strategies to reveal the best frameworks for success.
We’ll cover:
- The Staking-CS Paradigm
- Comparative Analysis
- Metrics and KPIs
- Challenges and Solutions
- Future Trends
The Staking-CS Paradigm
Cryptocurrency staking involves locking up a portion of your assets within a platform. In return, you receive a passive income through staking rewards and can participate in the platform’s governance. Staking rewards are usually around 5% to 30% APR, depending on the coin being staked.
In short: staking improves a platform’s stability and security by encouraging users to commit their assets. When coupled with Customer Success (CS) strategies, staking becomes not just a transactional endeavor but a more holistic experience.
How? It’s all about communication. CS teams must offer education resources, interactive tutorials, and responsive support to incentivize users to stake in a platform.
Moreover, by capturing feedback from active stakers, platforms can fine-tune their incentives, ensuring they align with user needs and market dynamics. CS teams can also organize community events, webinars, and forums to foster engagement and collective learning.
Comparative Analysis of Staking Models and CS Approach
Staking emerged as a strategy to secure networks and incentivize user participation. Different models were developed to cater to different stakers, e.g., newcomers or people interested in participating. The design of these staking models can greatly influence user engagement, loyalty, and overall success.
Let’s explore the most common staking models:
Fixed-Reward Staking
This approach offers users a consistent reward independent of overall network activity. While its predictability can attract newcomers, it might lack the allure for experienced stakers seeking more variability and challenges.
Dynamic-Reward Staking
Under this system, rewards are adjusted based on various factors, including the total assets staked or network congestion. This model often sees users monitoring and adjusting their stakes more actively to maximize potential rewards, leading to increased engagement.
Delegated Proof-of-Stake (DPoS)
Here, users vote for representatives to validate transactions. Elected validators then earn and distribute the rewards. The democratic nature of DPoS can keep users actively involved, particularly during election cycles, though loyalty can waver depending on the performance of chosen representatives.
Loyalty-Based Staking
This model rewards users based on the length or frequency of their staking. Such a system motivates users to strategize their staking periods carefully, and by rewarding long-term commitment, platforms can ensure sustained loyalty.
Metrics and KPIs
When determining the effectiveness of staking models on customer success, subjective judgment isn’t enough. Setting clear metrics and key performance indicators ensures you see a genuine benefit from a particular model.
These benchmarks serve as your markers for success:
- User Retention Rate: A primary indicator, it measures the number of participants who continue staking over time. High retention rates often hint at a successful staking model that offers consistent value.
- Frequency of Staking Activities: How often users engage with the platform to stake or re-stake can highlight the model’s capacity to keep users actively involved.
- Net Promoter Score (NPS): A gauge of user satisfaction, NPS can unveil the likelihood of stakers recommending the platform to others.
- Token Price Stability: While external factors influence token prices, a stable price can suggest trust in the staking model and its perceived long-term viability.
- Feedback and Engagement Levels: Direct feedback from users and active participation in community forums or governance proposals can shed light on how users view the staking mechanism.
Challenges and Solutions
Nothing is without its challenges. Incorporating staking models in customer success strategies presents several potential hurdles, from security issues to liquidity problems. Consider these challenges:
- Complexity for Novices: Advanced staking models can overwhelm beginners, leading to hesitancy or mistakes.
- Token Liquidity Concerns: Users might be reluctant to stake long-term if they perceive liquidity issues or are concerned about the inability to access their assets quickly.
- Mismatched Expectations: Users may expect consistently high rewards, which can be unsustainable for platforms.
- Security Concerns: Hacks or vulnerabilities can erode trust in the staking model and the platform.
To counter these challenges, consider educational initiatives to help newcomers understand the staking process. Comprehensive guides, webinars, and support can demystify some more complex aspects, gradually introducing people to more advanced staking models.
Furthermore, flexible staking options, like varied staking durations, can help alleviate some of the liquidity fears. After all, it’s better to guarantee some small engagements by allowing users to choose terms they’re comfortable with.
Finally, prioritizing and regularly updating security measures while educating users on best practices can fortify trust – and reduce the risks of hacks and other security issues.
Future Trends
What’s next: as the DeFi space matures, new staking models will become available to drive user engagement and loyalty – especially as these terms and platforms become mainstream.
Tiered staking, with different reward structures for short-term vs. long-term staking, could become increasingly common to appeal to both speculative traders and committed long-term believers.
Another frontier is multi-asset staking, which promises increased diversity. No longer will stakers be restricted to a single cryptocurrency. Instead, they will increase their staking portfolio by staking different tokens.
Last, dynamic rewards based on challenges, achievements, or milestones can add an element of fun and competition to the staking landscape. It’s a gamification trend happening in other sectors that we can expect to make its way into the staking world.
Closing Thoughts
Staking models and customer success strategies are shaping the future of blockchain platforms. By combining the two, platforms can enhance user engagement and loyalty.
Keeping users at the center through these combined strategies will be key to lasting success as the blockchain world grows and changes. The marriage of staking and customer success offers a promising path forward for platforms seeking enduring growth and user satisfaction.
Written by Irene Patrikios Clark,
Web3 Customer Success Specialist.
Sources:
https://finbold.com/guide/cryptocurrency-staking-guide/