How to Measure Onchain Loyalty: Lessons from Doodles and FLUF World

Adam Levy
February 5, 2024

With Warpcast frames as web3’s latest meta, are points and loyalty programs still a thing folks care about?

Poll taken on February 4, 2024 on Warpcast.

Throughout 2023, we saw projects like Blur's rewards model catapult its dominance over OpenSea, Friendtech teasing a liquid airdrop with offchain points, Rainbow Wallet rewarding users for every fart they do onchain, and many others quickly following suit.

Whether or not you think this is another web3 fad, loyalty programs have been around since the late 19th century when Green Shield stamps took retail stores by storm, replacing coins with paper objects that could be redeemed for catalog products.

Fast forward to today, we’re entering the ownership era of the internet, and loyalty programs will continue to make their way onchain with projects rewarding users for their contributions.

But how are contributions measured onchain?

This blog post will unravel the complexities of onchain loyalty, offering insights and frameworks to identify just who your most loyal or least engaged contributors might be so that you can easily integrate them into your crypto-native rewards program.

We’ll be exploring our analysis as we aim to shed light on how to measure onchain contributions by answering questions like:

  • Who are my most active wallets? 
  • Which wallets spent the most ETH on my NFTs?
  • Who has held our NFT the longest? The shortest?
  • How many users have collected at least one NFT across all contracts I’ve dropped?
  • Who are the wallets that recently entered my community?

So to kick things off, let’s start with understanding exactly what exactly is onchain loyalty?

What is Onchain Loyalty Anyways?

When we talk about loyalty usually, we're thinking about sticking with a favorite brand because we like it or get something good from it.

But when we move this idea over to the world of crypto and NFTs, it changes a bit.

Onchain loyalty, specifically for NFT projects, is about how much someone is involved within your community as measured by what they do onchain. 

This can be things like keeping an NFT for a long time, trading them a lot, or being part of decisions in the community as measured by onchain voting. 

Unlike offchain loyalty, which might be because we like a brand's style or get rewards, onchain loyalty is something we can see and measure in real time because every action is recorded on a public ledger.

For the purposes of our analysis, we focused on analyzing the onchain interactions of wallets within FLUF World and Doodles.

We built a cohort of six contracts spanning 7,115 wallets in the FLUF World ecosystem, which include: 

  1. FLUF World
  2. FLUF World: Burrows 
  3. FLUF World: Thingies
  4. FLUF World: Scenes & Sounds
  5. FLUF World: EGGs
  6. FLUF World: Buzzies

We did the same thing for Doodles, building a cohort of 10,100 wallets across the following four contracts:

  1. Doodles Original
  2. Space Doodles
  3. Dooplicator
  4. Genesis Box

These two ecosystems, known for their multiple contracts and vibrant engagement, serve as perfect case studies to illustrate the nuances of onchain loyalty.

Our analysis, however, comes with its limitations, so we wanted to make you aware before continuing reading.

Limitations of This Data

This data is based on observable wallet activity in the last 30 days, not accounting for individuals who manage multiple wallets or those using cold storage solutions. 

Despite these constraints, the insights garnered provide a meaningful snapshot of community engagement and loyalty.

Now that we’ve cleared that, let’s peel back the layers of what loyalty means onchain starting Bello’s loyalty index.

Key Metrics for Understanding Community Loyalty Scores

Example of the BLS

The Bello team developed a standardized metric known as the Bello Loyalty Score (BLS) to quantify engagement and loyalty within NFT communities. 

This metric is particularly relevant in environments such as NFT projects, where the traditional metrics of churn and retention are viewed through a different lens, then let's say, a traditional site visits often seen in web2 or DEX swaps often seen in DeFi.

In these communities, a high churn rate may be perceived as beneficial, as it indicates active trading and generates royalty revenue for the projects.

Responding to feedback from our users, we launched the Loyalty Dashboard, designed to offer a comprehensive understanding of onchain loyalty that outlines:

  1. Bello Loyalty Score
  2. Average time held
  3. Median time held
  4. Retention rate
  5. Churn rate
  6. A list of most engaged users
  7. A list of users who recently sold

Example of Bello's Loyalty Dashboard

The Bello Loyalty Score, a composite measure out of 100, is calculated by analyzing community engagement, retention, and churn onchain.

Our analysis includes an examination of transaction volumes across wallets and the dynamics between long-term holders and newer participants, among other critical metrics we keep to ourselves. 

It's important to recognize that different NFT communities have different priorities. 

For instance, communities focused on membership passes, Like Refraction's Refract Pass NFT collection, may value a higher retention rate over churn, aiming to build a stable and engaged community base.

Refract Pass Loyalty Dashboard

This distinction highlights the necessity of a nuanced approach to measuring loyalty and engagement, tailored to the specific needs and dynamics of each community.

Reflecting on the performance of specific NFT communities such as FLUF World and Doodles provides tangible insights into how the Bello Loyalty Score (BLS) correlates with community behaviors and market dynamics. 

FLUF World 30 day loyalty

For FLUF World, the BLS stands at 48 out of 100, with an average holding period of 11 days and a median of just one day. 

Doodles 30 day loyalty

On the other hand, Doodles shows a BLS of 29 out of 100. Here, holders keep their assets for an average of six days, with the median holding time also being one day.

This analysis suggests that although FLUF World and Doodles both experience active trading, FLUF World demonstrates a marginally higher level of holder engagement and loyalty. This is indicated by its superior BLS and the extended average duration for which holdings are kept. Such differences might also be attributed to the Doodles IP being inherently more liquid.

However, the predominance of short-term holding across both communities underscores the speculative nature of the NFT market and suggests that achieving deeper, lasting loyalty remains a challenge.

Next, let’s look at 30-day trading volume.

Doodles 30 day volume

The trading volume within these communities further underscores the diversity in their market activities. 

Doodles, for instance, saw a significant trading volume of 4.87K ETH (equivalent to approximately $11.20 million) over the last 30 days across those four contracts. 

FLUF World 30 day volume

This figure starkly contrasts with FLUF World's trading volume, which stood at 420.81 ETH (around $968.80K) in the same timeframe.

Such a discrepancy not only highlights the higher liquidity and trading interest in Doodles but also suggests different investor behaviors and community engagement levels.

These metrics — BLS, average and median time held, along with trading volume — provide a multifaceted view of community dynamics. 

A higher BLS may indicate stronger loyalty or engagement within a community, as seen with FLUF World. 

However, the substantial trading volume in Doodles, despite its lower BLS, points to a highly active market presence, possibly driven by speculative interest or a broader base of short-term holders.

This analysis demonstrates the nuanced nature of community engagement and loyalty in the NFT space.

By examining these metrics, stakeholders can better understand the health and vibrancy of an NFT community, tailor strategies for community management, and predict future trends.

The BLS offers a comprehensive snapshot of a community's engagement and trading dynamics, effectively capturing the essence of both new and existing holders' activities. 

To uncover the intricacies of community behavior and onchain value per wallet, it's beneficial to delve beyond the BLS.

One such avenue is Bello's Segments feature, a powerful tool designed to dissect and analyze asset balances across different cohorts within NFT communities.

4 Filters to Identifying Onchain Loyalty

Bello's Segments feature enables a granular examination of the distribution of assets among community members. 

By segmenting users into distinct groups based on their asset balances, this tool provides insights into the concentration of ownership and the diversity of investment within the community.

Through this next section, we’ll be segmenting FLUF World and Doodles holders and measuring their onchain contributions with the following filters:

  1. All Searched NFTs
  2. Total Spent
  3. Time Held
  4. Last Purchased 

Here's how each filter can be applied to dissect the communities further, starting with our personal favorite, the “All Searched NFTs” filter.

All Searched NFTs

This filter sifts through the data to identify wallets holding a specified number of tokens across all the contracts included in the cohort. 

Furthermore, it answers the critical question: what percentage of our users have collected at least one NFT across all of our collections?

By applying this filter, we can differentiate between casual holders with fewer tokens and more committed ones with larger portfolios. 

For instance, segmenting wallets that hold at least 1 token from either FLUF World or Doodles might reveal the core community members who have a dedicated stake in the project's success.

The segmentation analysis of FLUF World and Doodles holders, specifically through the "All Searched NFTs" filter, provides revealing insights into the patterns of loyalty and engagement within these communities. 

FLUF World - All Searched NFTs filter

With 851 out of 7,104 FLUF World holders (approximately 12%) having collected at least one token from all six contracts, there's a clear indication of a committed segment within the community.

This level of engagement suggests a strong connection and loyalty to the brand, as these holders actively seek out and acquire tokens across the entire range of FLUF World's offerings.

Doodles - All Searched NFTs filter

Conversely, in the Doodles community, only 30 out of 10,100 holders (roughly 0.28%) have collected at least one token from each of the four contracts analyzed. 

This significantly lower percentage points to a less active collecting behavior across the entire ecosystem compared to FLUF World.

It may imply that while Doodles has a broader base of holders, the depth of engagement and cross-collection loyalty is not as pronounced as in FLUF World.

This comparative analysis suggests that FLUF World enjoys a higher degree of loyalty among its members, evidenced by a greater willingness to engage with and invest in the full spectrum of its offerings. 

Such active collecting behavior across multiple contracts indicates a strong attachment to the FLUF World IP, with holders likely valuing the community and its assets highly.

But beyond the "All Searched NFTs" filter, communities like Doodles and FLUF World may analyze loyalty through the lens of how much Ethereum their holders have spent across their IP, which is where the Total Spent filter would come into place. 

Total Spent

By examining how much Ethereum wallets have expended acquiring said collectibles, we can gauge the financial commitment levels within each community.

This filter reveals not just the high rollers who have invested substantial amounts but also the small-scale investors who contribute to the community's diversity. 

Analyzing the Total Spent can help in understanding the economic distribution within the community and identifying the most valuable stakeholders in terms of monetary contribution.

Analyzing the "Total Spent" metric between FLUF World and Doodles highlights differences in community investment.

FLUF World - Total Spent filter

In FLUF World, 11% of holders have invested at least 10 ETH, compared to 19% in Doodles, indicating a higher financial engagement among Doodles' community. 

Doodles - Total Spent filter

This difference aligns with Doodles' greater trading volume, suggesting its community is more inclined to make substantial investments.

Considering how much holders spend as an indicator of loyalty, it's clear that Doodles has a significant number of highly invested members. 

Though, financial contributions are just one piece of the puzzle in understanding community dynamics. 

Focusing only on money might not always capture the full picture of how engaged or loyal community members are.

That's where the importance of looking at how long someone holds onto a token comes into play, and time may offer a more nuanced approach to measuring loyalty depending on your community’s goals. 

Time Held

Time Held sheds light on the depth of connection members have with the community as measured by the length of time they’ve held a token. 

At Bello, we measure that by the number of days. 

By filtering for users based on how long they've held their tokens, we can distinguish between the long-term believers who see sustained value in their holdings and the short-term traders looking for quick profits. 

FLUF World - Time Held filter

For FLUF World, an impressive 87% of holders, or 6,175 out of 7,104 wallets, have held at least of one token out of six contracts for at least 365 days. 

Doodles - Time Held filter

Doodles, on the other hand, shows that 73% of its holders, or 7,368 out of 10,100 wallets, have held at least one token out of the four contracts for the same duration.

This data underscores a high level of commitment across both communities, with a notably higher retention rate in FLUF World. 

The extended holding period in both cases suggests a strong sense of loyalty and belief in both communities, indicating that members are not merely seeking short-term gains but are invested in the long-term potential of each ecosystem.

Having explored the long-term commitment and loyalty within both FLUF World and Doodles communities, let's now shift our focus to the 'Last Purchased' filter, which sheds light on recent growth and the appeal of these NFT ecosystems to new members.

Last Purchased

The "Last Purchased" filter offers valuable insights into the recent growth and attractiveness of communities to new members.

By pinpointing wallets that have made their initial purchase within a specified recent period, such as the last 30 days, we can assess the influx of new investors and the community's expansion. 

This approach is instrumental in evaluating the impact of marketing strategies and the community's current trajectory.

FLUF World - Last Purchased filter

When applied to analyze the recent activity within FLUF World and Doodles, the data presents an enlightening narrative of community engagement and growth. 

In FLUF World, a modest 4% of the community, or 291 out of 7,104 holders, have acquired at least one token from any of the six contracts in the past 30 days. 

Doodles - Last Purchased filter

In contrast, Doodles demonstrates a higher percentage of new acquisitions, with roughly 7%, or 672 out of 10,100 holders, making a purchase from one of the four contracts within the same timeframe.

This differential highlights Doodles' relative appeal and momentum in attracting new members compared to FLUF World, though the difference isn’t too significant and rather serves as a framework to welcome those who’ve recently joined your ecosystem and ensure they have what they need to feel welcomed. 

Such insights not only reflect the dynamic nature of these communities but also serve as a barometer for the effectiveness of recent initiatives aimed at fostering growth and engagement.

Onchain Loyalty Programs are Just Getting Started

As we close the loop on our exploration of onchain loyalty, it's evident that the principles of loyalty programs have evolved significantly from the days of Green Shield stamps, yet the core idea remains unchanged: incentivizing behaviors that create consistent engagement and loyalty. 

In the age of crypto, the question that emerges is: How do we effectively measure these contributions onchain?

By pinpointing the most active wallets, identifying the biggest spenders, and analyzing trends in token holding and acquisitions, projects have the opportunity to not only reward but also strengthen their bond with the community.

The insights drawn from examining FLUF World and Doodles provide a roadmap for understanding loyalty in the NFT space. They show us that beyond the metrics of trading volume and holding durations, true loyalty is demonstrated by a community's ongoing engagement and support for a project.

Looking ahead, it's evident that loyalty programs will remain vital in building thriving and connected communities in the onchain world. 

With the help of data-driven insights and the open values of Web3, new and legacy projects are well-positioned to offer experiences that are not only rewarding but also deeply engaging for their members that are in-part responsible for the ecosystem's success. 

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