1.
Conversion Funnel: From FMOT to First Transaction
1. First Moment of Truth (FMOT) - Awareness
This occurs before the user visits the website. A potential user first learns about the
platform through channels such as social media, online communities, search results, adds,
or word-of-mouth. At this stage, the user forms an initial impression and decides whether
the product is interesting enough to explore.
2. Website Visit - Product Discovery
The user lands on the website and begins exploring the available prediction markets. They
browse events, view probabilities, and understand how the platform works. This stage helps
users familiarize themselves with the product without requiring an account.
3. Market Exploration
The user navigates through different sports categories and prediction markets, comparing
events and outcomes. They review market details such as probabilities and trading volume
to identify markets they may want to participate in.
4. Trade Intent - Selecting a Position
The user clicks on an outcome (Yes/No) within a market, which opens the trade interface.
They can enter an amount and view estimated shares and potential payout. This indicates a
clear intent to place a trade.
5. Account Signup / Login
Since trading requires an account, the user is prompted to sign up or log in. After completing
the signup process, the user gains access to their account and trading features.
6. Wallet Creation
After successful signup, the platform automatically creates a wallet linked to the user’s
account. This wallet will be used to store funds and manage transactions on the platform.
7. Deposit Funds
The user funds their wallet using available payment methods such as cryptocurrency
transfer or card payment. Once the deposit is completed, the user has a balance available
for trading.
8. Execute First Trade (Conversion)
The user returns to the selected market and confirms the purchase of a position. Once the
transaction is completed and the position appears in the user’s portfolio, the user becomes
a transacting user, marking the final conversion event.
2. Infrastructure Required to Track the Conversion Funnel
To track the conversion funnel from First Moment of Truth (FMOT) to the first transaction,
we can use Google Analytics (GA4).
1. First Moment of Truth (FMOT)
Setup
Use UTM parameters in all marketing links.
Integrate Google Analytics with marketing channels such as Google Ads or social
campaigns.
What to Track
Traffic source (organic search, paid ads, social media, referrals)
Campaign performance
Click-throughs to the website
This helps identify where users are discovering the product.
2. Website Visit – Product Discovery
Setup
Use GA
Enable session and pageview tracking.
Events to Track
Page views
Session start
Landing page
Time spent on the site
This helps understand how many users enter the funnel.
3. Market Exploration
Setup
Configure custom GA events for market interactions/
Events to Track
Market viewed
Market filter selected
Market card clicked
Search used
This helps measure which markets users explore most frequently.
4. Trade Intent - Selecting a Position
Setup
Track UI interaction events through GA event tracking.
Events to Track
Position selected
Trade modal opened
Amount entered
These events help identify users who are close to making a trade.
5. Account Signup / Login
Setup
Send GA events when signup or login actions occur.
Associate events with a user ID once the user logs in.
Events to Track
Signup started
Signup completed
Login success
This helps analyse the signup conversion rate.
6. Wallet Creation
Setup
Trigger a GA event once wallet creation is successful.
Events to Track
Wallet created
Wallet creation failed
This ensures the system tracks whether users reach the stage required for transactions.
7. Deposit Funds
To trade, users must deposit funds.
Setup
Track deposit interactions using GA events.
Events to Track
Deposit initiated
Deposit method selected
Deposit success
Deposit failed
These events help identify drop-offs in the funding process.
8. Execute First Trade (Conversion)
The final step is when the user completes their first transaction.
Infrastructure / Setup
Track trade confirmation events from the trading system.
Events to Track
Trade initiated
Trade completed
The trade completed event represents the final conversion in the funnel.
3. Biggest Funnel Drop-off and Product Ideas to Fix It
The largest funnel drop-off will most likely occur at the “Deposit Funds” step.
Account Created to Wallet Funded
Why this step causes the highest drop-off
1. High friction
o Users must take a financial action before experiencing value.
2. Payment complexity
o Crypto transfers, wallets, and networks can confuse new users.
3. Trust barrier
o New users may hesitate to deposit money into a platform they just
discovered.
4. Effort vs reward mismatch
o Users have not yet experienced the product’s value before being asked to
deposit.
Because of these factors, many users who sign up will not proceed to fund their wallet,
leading to the biggest drop in the funnel.
Three Powerful Product-led Solutions
1. Give Users Free Trial Credits (First Trade on the Platform)
Allow new users to place their first trade using free platform credits without needing to
deposit funds.
How it works
Every new user receives some amount in trial credits after signup.
Credits can only be used for one trade.
Any profits can either:
o Be withdrawn after a deposit, or
o Be converted to real balance after verification.
Why this works
Removes the deposit barrier.
Let’s users experience the core product immediately.
Demonstrates the excitement of prediction markets before asking for money.
2. Simulated Trading
Allow users to try the platform without real money.
How it works
Users get a virtual balance.
They can place trades and see outcomes.
Why this works
Builds confidence and understanding.
Users learn how prediction markets work.
Increases trust in the platform before committing money.
3. Social Proof on Active Markets
Users are more likely to trust and participate in markets that appear active.
How it works
Display signals such as:
Number of traders in the market.
Total volume traded.
Recent trades happening in real time.
Why it works
Builds trust and credibility.
Reduces hesitation about depositing funds.
Creates urgency and engagement.
4. North-Star Metric
Number of Transacting Users
This metric represents the total number of users who successfully place trades within a
given time period.
Why this works:
It captures true engagement with the core product.
It reflects user value creation.
It directly impacts platform liquidity and revenue.
Top 5 KPIs to Track
1. D1 Activation Rate
Percentage of users who place their first prediction within 24 hours of visiting the
platform.
Early engagement determines whether users understand the product and perceive
value.
2. D7 Rolling Retention
Percentage of users who return to place predictions within 7 days of their first bet.
Indicates whether users are developing a habit of using prediction markets.
3. D30 Rolling Retention
Percentage of users who remain active predictors after 30 days.
Long-term retention drives lifetime value and sustainable growth.
4. Prediction Volume
Total value of predictions placed across markets.
Higher volume improves liquidity, increases user engagement, and drives platform
revenue.
5. Deposit Conversion Rate
Measures how many registered users actually fund their wallet.
Identifies the biggest friction point in the funnel.
5. Revenue Models
1. Transaction Fee (Commission per Trade)
The platform charges a small fee on every trade executed.
Pros
Directly linked to platform activity.
Scales naturally with trading volume.
Easy for users to understand.
Cons
High fees may discourage trading.
Active traders may move to cheaper platforms.
2. Winning Payout Fee
The platform charges a small fee only on winning trades.
Pros
Users feel they only pay when they win.
Encourages more trading activity.
Cons
Platform income depends on winning outcomes.
May reduce user pay-outs, which could affect satisfaction.
3. Premium Subscription (Pro Trading Features)
Offer a subscription plan with advanced features.
Examples of premium features:
Prediction insights
Early access to new markets
Higher trading limits
Pros
Recurring and predictable revenue
Attracts serious traders
Diversifies revenue beyond transaction fees
Cons
Limited appeal to casual users.
Requires additional feature development.