Stop Asking Crypto Companies About CAC — It Doesn’t Matter.
Don’t apply conventional metrics to unconventional products and people. Don’t ask unquantifiable questions and expect quantified answersThe Thesis: You’re Measuring the Wrong Thing
The Thesis: You’re Measuring the Wrong Thing:
You’re a DeFi company. Stop talking about CAC (Customer Acquisition Cost). Those metrics don’t really matter…to YOUR business.
Not because metrics don’t matter — they do. But because you’re trying to force a traditional business metric onto an unconventional business model, and it breaks the entire logic of what you’re actually building.
Here’s why, and here’s what you should be measuring instead.
The Identity Crisis: What Even Is a Crypto Business?
Crypto companies are fascinating. Many attempt to fashion themselves as traditional businesses with traditional business models — or worse, they try to follow the startup playbook — when there are so many different pieces missing that actually make a business run, make a business profitable, and make a business… I don’t know, an actual business.
Over the past decade, you’ve seen hundreds of crypto companies, startups, projects, and applications come and go. The things that were trending a decade ago have long since been memory-holed, along with the people who tried and failed to build something that not only generated revenue but gained widespread adoption.
Here’s the problem:
One of the number one things that most companies in this space consistently ask for is: “Where are my users? What channels do I use to acquire them? How do I acquire them? How much do I spend? How much revenue am I generating?”
And the funniest part? You have companies with multi-million dollar valuations — sometimes hundreds of millions of dollars in valuation — and they don’t actually generate revenue.
How DeFi Companies Actually Make Money (Or Don’t)
Let’s break down the business models:
Some companies make money off of fees from the transactions that occur on their platform.
Other businesses make money off of the number of users that are interacting with a given protocol.
Then some businesses? We have no idea how they actually make money.
This isn’t sustainable. But it is reality.
The CAC Question: Why Everyone’s Asking It
A common theme within the space that has started to bubble up recently is: “What is my CAC (Customer Acquisition Cost)?” or “How do I conduct UA (User Acquisition)?”
These two concepts are the entire backbone of a company’s budget in traditional business:
- How much does it cost me to acquire new customers?
- How am I going to acquire said customers?
In traditional businesses, leadership, decision makers, marketers, business development people, product teams — everyone across the board has to have an understanding of how to drive customer acquisition cost down, how to make user acquisition more efficient, and essentially: how do I get more people to buy the thing that I am trying to sell?
Why CAC Breaks When You Apply It to DeFi
Here’s the fundamental difference:
Most Web3 applications and companies aren’t necessarily selling you something. They’re just allowing you to use something. They offer a service. You use said service.
But what happens when the methods of your business are unconventional and you acquire users through unconventional or organic means? How do you measure your customer acquisition cost as an unconventional business that acquires users using unconventional or roundabout means?
How do you calculate your costs?
Some companies have to worry about what their unit economics are. But do DeFi companies?
Some of them, yes. Some of them, no.
The Organic Acquisition Black Hole
Some DeFi companies don’t even have a budget for user acquisition. They basically get on Twitter, create some content, post about it enough, and eventually something catches on. You get a retweet. You get a blog post. Someone mentions you. Your founder goes on a podcast. And then all of a sudden, your platform has users.
How do you quantify that?
Do you?
For some DeFi companies, this is not going to be a quantifiable metric.
The Impossible Math of Crypto CAC
Let’s try to calculate CAC for a typical DeFi protocol. Ask yourself:
Acquisition costs:
- How much does it take to acquire users?
- Well, given that most DeFi companies can’t advertise through traditional means, there goes your typical measurement.
- How much do you pay the social media person?
- How much do you pay the content person?
- How much do you pay your Discord mods?
- How many hours are they working?
- How much posting are they doing?
- How many reactions do they get?
- How many DMs do they send or receive?
- How many calls do they have talking about the product?
- How many meetings do they have to go over integrations and BD partnerships?
Product costs:
- What are the users buying?
- What are you selling?
- What is the cost of engineering?
- What is the cost of server hosting?
- What is the cost of bug bounties and fixes?
All of these questions come across like a black hole or Pandora’s Box for customer acquisition cost. Because your “customer” is a crypto user who’s going to “spend money with you” — except there’s not necessarily something to spend money on. They’re just using your platform to buy and transact, and you collect a portion of revenue from the action of them buying and transacting using your platform itself.
We’re talking about three dozen questions or more to acquire a crypto user.
If you did the math and added up all of these different quantifiable metrics, the math would be insane. Nobody would do it. And most importantly, a lot of these DeFi companies don’t want to know what the cost is — not really, anyway — because if they added up the cost of all those things we mentioned, they would never do it. It costs too much, and it increases your burn rate to unsustainable levels.
Binary Thinking Breaks Crypto Logic
This cannot be approached with binary thinking or typical metrics.
How do you measure the cost of something that potentially has infinite returns with organic means of acquisition?
The answer to that question is: you don’t.
Customer acquisition cost is a traditional method of measurement. Crypto customer acquisition cost is a non-traditional method of measurement plus an unconventional method of user acquisition. Applying a traditional answer to a non-traditional and unconventional question breaks the entire logic.
The Real Question You Should Be Asking
Instead of asking “What’s my CAC?”, ask this:
“How do we illustrate a means for a company to make more money or save more money based off of what we can actually measure about our users?”
The answer to that question is: you find another way in. Because the amount of time spent trying and failing to answer the unquantifiable CAC question could be spent solving a quantifiable problem instead.
When CAC Actually Matters (Spoiler: Later)
Customer acquisition cost is important when dealing with traditional things that need to be measured. This particular question is not traditional.
There are going to be investors, decision makers, and stakeholders that are going to ask you to solve an unsolvable question. Your goal, in whatever role it is, is to provide an alternative.
The reason why DeFi companies can’t necessarily afford to go down this rabbit hole is that you can’t undo it or go back. This is how you lose leads. This is how you lose investors. This is how you lose stakeholders or people that want to join your team. Decision makers end up building toward and asking questions that they are unable to solve answers for.
You don’t necessarily stop trying to solve for this — but you steer any type of conversation and build toward something that you can answer, not what you can’t.
It’s about focusing efforts on things that you can control.
CAC is quantifiable, but it isn’t quantifiable just yet for a widespread portion of DeFi. It won’t be until traditional finance has integrated itself enough with DeFi where those traditional metrics like customer acquisition cost take over and replace the current holes that currently exist in Web3 companies’ business models and budgets.
What You Should Actually Be Measuring: Behavior
Metrics that matter boil down to behavior that matters.
Here’s what real metrics look like for a DeFi protocol:
Swap Patterns:
- How many swaps did this user make in the past two and a half weeks?
- What were the sizes of those swaps?
- Where did they swap and send money to or from?
Wallet Behavior:
- How many wallets does this particular user have that they are trading between?
- This person connected 58 times to my protocol from their house and 38 times from their mobile device.
Travel and Usage Patterns:
- There’s a pattern between where they trade, where they travel, when they travel, and how much they spend on average when they travel.
How Do You Actually Track This?
How do I know they’re traveling?
Because I have an SDK installed on my application that shows:
- Anytime they show up on my app
- Where they connect from
- When they connected
- How long they connected for
- What they used when they connected
I can see that they interact with the product in a way that shows this is what they use to buy, sell, transact, and interact with the Web3 space. This means that they trust me to do all of their on-chain work.
If they trust me to do all of their on-chain work, then how do I retain that person?
Building the Complete Behavioral Picture
Let me show you what real behavioral tracking looks like:
Time on Platform:
- How long did they spend on my DEX?
- Oh, they spent 30 minutes here.
- Where did they spend that 30 minutes?
Trading Journey:
- What is the time between them going to trade perps to them going to trade spot?
- They sent that money that they traded on spot to another wallet.
Wallet Analysis:
- Is this a new wallet? Is this an old wallet?
- This is one of their 13 wallets.
How do I know all of this stuff about their wallets?
It’s because of the SDK that allows me to collect this information. It has mapped all of this user’s information and attributed it to a profile that allows me to see the behavioral profile of this individual. I can determine:
- Who they are
- What they’re doing
- When they’re doing it
- How they’re doing it
The Real Metrics: Specific User Profiles
Here’s what a complete behavioral profile looks like:
Wallet Composition:
- Two of this person’s wallets are filled to the brim with meme tokens and shitcoins.
- The other portion is stables and Bitcoin.
Platform Preferences:
- They spend 75% of their time on Kamino Finance.
- They spend 25% of the rest of their time playing around on Jupiter Exchange.
Being able to determine the patterns of a user’s behavior and the metrics — the real metrics — are the things that you measure, quantify, and use to drive user acquisition and revenue.
Why This Matters More Than CAC
Traditional metrics tell you:
- It cost $50 to acquire this user
- They spent $100 on your platform
- Your ROI is 2x
Behavioral metrics tell you:
- This user trades primarily between 2–4 PM EST
- They prefer mobile over desktop 60/40
- They’re a degen with 13 wallets who farms yields across multiple chains
- They trust your platform for high-value perps trades
- They move assets to cold storage after accumulating $10K+ in one wallet
- They’re likely to churn if gas fees spike above $5
Which information is more valuable for building your product roadmap? For understanding retention? For identifying your power users?
It’s not even close.
The Technology Stack You Need
Here’s what you need to implement this approach:
1. SDK Integration
Install a Software Development Kit in your application that tracks user interactions without compromising privacy or requiring KYC.
2. Behavioral Attribution
Map all user actions to anonymous profiles that show patterns over time.
3. Privacy Protection
Use cryptographic techniques and zero-knowledge proofs to ensure user data is anonymized and protected while still being useful for analysis.
4. Analytics Dashboard
Build (or partner with a company that provides) a UI that lets you see behavioral patterns across your entire user base.
This is how you understand your users. This is how you build better products. This is how you generate sustainable revenue — not by charging users more, but by understanding what they actually need.
The Paradigm Shift
Traditional businesses measure:
- How much did it cost to acquire this customer?
- How much did they spend?
- What’s my ROI?
DeFi businesses should measure:
- What is this user doing?
- Why are they doing it?
- How often are they doing it?
- What patterns emerge across thousands of users doing similar things?
The first model is about extraction. The second model is about understanding.
When you understand user behavior, you can:
- Build better products that users actually want
- Optimize for the actions that drive the most value
- Identify which user segments are most valuable (not based on what they spend, but what they do)
- Monetize the insights and patterns, not the individual users
- Retain users by giving them what they need before they even know they need it
The Bottom Line
Stop trying to calculate things like CAC for your DeFi protocol. Stop letting investors force you into a framework that doesn’t fit.
Instead, use a system that tracks, analyzes, attributes, and presents what a user’s behavior really is. Understand what your users are actually doing, not what they’re theoretically costing you to acquire.
Install an SDK. Build behavioral profiles. Map user journeys. Identify patterns. Use those insights to build better products, retain users, and generate revenue in ways that don’t extract value from users but instead provide value to your entire ecosystem.
The companies that figure out how to measure behavior instead of acquisition costs are the ones that will actually understand their users, build better products, and create sustainable business models.
The rest will keep spinning their wheels trying to answer unquantifiable questions while their competitors move on to questions that actually matter.
Are you still trying to calculate CAC for your DeFi protocol? What behavioral metrics are you tracking instead?
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