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In Web2 marketing, the funnel has reigned supreme for decades. It was simple:
Awareness → Consideration → Conversion → Retention
But in the world of Web3 — permissionless, tokenized, community-first — this linear model is no longer effective.
Instead, successful Web3 projects rely on decentralized growth loops, community incentives, on-chain reputation, and multi-entry user journeys. The “funnel” has been replaced by network-driven, participatory ecosystems.
In this article, we explore:
- Why the traditional funnel is outdated in Web3
- What models are replacing it
- Frameworks to design your own non-linear growth engine
- Tools and case studies
- KPIs to track success
💡 Why the Funnel No Longer Works in Web3
1. User Behavior is Non-linear
Web3 users don’t follow a clean journey. They might:
- Discover your project via a meme
- Join your Discord because of an airdrop rumor
- Use your product once to farm XP
- Stake tokens later because of a community vote
There’s no “order” — and no clear boundaries between awareness and action.
2. Multiple Entry Points
In Web3, users come in through:
- Quests on Galxe/Zealy
- On-chain incentives
- Token/NFT drops
- Community referrals
- Twitter threads or KOL content
Every touchpoint is potentially the first touch — and potentially the last.
3. The Role of Incentives
Web3 growth is incentive-first, not attention-first.
You don’t just show ads — you reward actions:
- Provide liquidity
- Bridge assets
- Vote on governance
- Refer others
- Hold a token/NFT
Traditional funnels are not designed to track or optimize this behavior.
4. The Community Owns the Narrative
In Web3, your brand isn’t what you say — it’s what your community posts, memes, and believes.
This removes the marketer’s control and flattens the funnel. The “top” of the funnel may now be community-generated content instead of ads.
🔁 What Replaces the Funnel?
The Web3 world replaces the funnel with ecosystems and loops.
Here are three modern models:
🔄 1. Growth Loops
Each action leads to another action, often by a different user.
Example:
- Alice mints your NFT
- Tweets about it to earn XP
- Bob sees it and joins
- Bob refers Carol to get into whitelist
- Carol uses your dApp
Unlike a funnel, loops compound.
One user = multiple outputs → new users → new loops.
🧬 2. Web3 Flywheels
Flywheels are momentum machines. Once you spin them, they reinforce themselves.
Web3 Flywheel:
1. Token incentives attract users
2. Users generate on-chain activity
3. Activity boosts token utility & price
4. More users attracted
5. Protocol value increases → back to step 1
Well-designed tokenomics is growth infrastructure.
🌐 3. Multi-Entry Community Journeys
Think of your community as a network, not a line.
Users join for:
- Value (tools, staking, NFTs)
- Culture (memes, vibes, narratives)
- Incentives (airdrops, tokens, XP)
- Contribution (DAO, governance)
You design onramps, not funnels.
Every touchpoint is a potential entry or loop.
🧠 Framework: Designing a Web3 Growth Loop
Use the PLUR Loop:
Participation → Leverage → User Activation → Reinforcement
Step 1: Participation
Make it easy for new users to do something simple.
- Claim a POAP
- Join a Zealy quest
- Follow social accounts
- Buy a cheap NFT
Step 2: Leverage
Turn that action into reach.
- Ask them to share it
- Use on-chain proof for community ranking
- Show leaderboard or social badge
Step 3: User Activation
Deliver meaningful feedback.
- Unlock more features
- Offer XP / token / whitelist
- Give role or status in community
Step 4: Reinforcement
Close the loop with new motivation.
- Launch a new campaign
- Activate their referrals
- Announce milestone or collab
Then: loop starts again with new users.
🔍 Case Studies: Funnel Replacements in Action
🧪 Friend.tech
- Users buy shares of creators
- Prices rise as more users join
- Incentivized invites via points
- Social loop + economic loop = viral growth
No traditional onboarding funnel — just economic curiosity + rewards.
🧠 LayerZero Airdrop Quests
- No website home funnel
- Growth driven by ecosystem quests
- Users complete tasks to boost airdrop score
- Galxe + Zealy + user-made tools = gamified path
🧱 Farcaster (Web3 Twitter)
- Open protocol for devs
- Community-led apps, bots, clients
- Growth not via ads but developers and memes
- Vibes replace funnel steps
