🚦5 proven strategies to onboard crypto users safely
And the importance of tax planning in crypto: top mistakes
Today's Agenda...
Onboarding into crypto feels alien 👽, but with the right guidance, it becomes a smoother journey 🚀
Neglecting crypto tax planning can lead to costly surprises 💸—avoid common pitfalls with proactive strategies and expert advice 🧾
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5 Lessons from onboarding hundreds of new users into crypto
This article was written by Patrick McCunn.
Jumping into crypto is like stepping into a parallel universe where some things look familiar but work in a completely different way. Over the past few years, I've onboarded hundreds of new users into this space through Yieldschool, many with absolutely zero prior crypto experience, and one thing is clear: most people feel like they’ve been dropped into an alien landscape without a map. Whether it’s navigating decentralized exchanges or understanding the purpose of burner wallets, every step can be confusing and lead to costly mistakes along the way.
If you’re a crypto company or evangelist looking to onboard the next wave of new adopters, here are five lessons I’ve learned from helping newcomers make sense of crypto's complexities — lessons that can hopefully help anyone entering the space get up to speed faster and safer.
1. Forget what you know — This is a new language entirely
For most people, the idea of "swapping" tokens sounds like something out of a playground barter system, not a high-stakes financial move. Words like "staking," "yield farming," and "burning" are equally bewildering (I mean let’s not forget the infamous Steak vs Stake video from Gensler). The reality is that many crypto concepts don’t have a direct analog in traditional finance or everyday life. The first step in onboarding is understanding that this is a new game with new rules. The faster newcomers accept that they’re learning a new language, the faster they start to grasp the basics.
Best Practice Tip 1: When onboarding new users, create a glossary of key terms, breaking down complex crypto jargon into simple, everyday language. Use analogies that relate to their real-life experiences to make it more relatable.
2. Safety practices are foreign concepts — And that’s dangerous
Most new users have no idea that taking a screenshot of your seed phrase can expose your entire portfolio, what a "burner wallet" is, why they should care about "revoking permissions," or how to verify they’re on the right website. These are the basics of staying safe in crypto, but they’re also completely counterintuitive to anyone who’s used to online banking or shopping. New users don’t understand crypto safety because they’re used to traditional financial platforms doing the heavy lifting for them. When these security practices aren’t explained properly, it leads to mistakes, scams, and inevitably, financial loss.
Best Practice Tip 2: Provide new users with a downloadable safety checklist that includes step-by-step guides on storing seed phrases, setting up burner wallets, and verifying URLs. Visual guides can make these practices easier to understand and follow.
3. Centralized exchanges are comfort zones — But they won’t get you far
For most people, centralized exchanges like Coinbase or Binance are the entry points into crypto. They’re easy to use, feel safe, and offer a familiar experience to traditional banking or trading. However, staying on CEXs is like never leaving the shallow end of the pool; safe, but you’re missing out on most of what the crypto world has to offer. Most users are reluctant to venture beyond centralized exchanges because they don't feel confident. The fear of “messing up” or “getting hacked” is real, especially when they hear horror stories of lost funds or compromised wallets.
Use the comfort of CEXs as a teaching tool, explain how they work, then contrast that with the advantages of decentralized platforms. Demonstrate the benefits of owning your keys, interacting with DeFi protocols, or swapping on a DEX. Make the transition gradual, with guided steps and plenty of support. Or just explain the entire FTX fiasco, that usually gets the point across.
Best Practice Tip 3: Use the comfort of CEXs as a teaching tool, explain how they work, then contrast that with the advantages of decentralized platforms. Demonstrate the benefits of owning your keys, interacting with DeFi protocols, or swapping on a DEX. Create a step-by-step guide that walks users through moving funds from a centralized exchange to a decentralized wallet, explaining the benefits and precautions at each stage. Include video walk throughs to make the transition as smooth as possible.
4. Lack of education leads to burnout — And burned funds
The crypto space is full of stories about users losing money because they didn’t understand how things work; simple mistakes like sending tokens to the wrong address, signing a malicious contract, or falling for a phishing scam. The root cause? A lack of foundational education. Many people dive into crypto because of FOMO, without understanding the basics. They try to wing it, make costly mistakes, and often leave the space discouraged and burned. These people often also become the strongest anti-crypto voices. Careful, linear education can prevent this.
Best Practice Tip 4: Break down the onboarding process into small, manageable lessons. Start with the absolute basics; how to create a wallet, how to transfer funds securely, and the importance of double-checking everything. Use real-life examples to illustrate potential pitfalls and how to avoid them.
For example, I once ran a “Steal My Wallet Challenge”. It went like this: I set up a wallet in a video demonstration including publicly showing my Seed Phrase and how best to store it, explaining how important it is for them to keep this completely private. I also covered gas fees during that lesson. A few days later I left 100$ in USDC in the wallet with no ETH for gas and told them whoever stole it first got to keep it. After reviewing the Challenge, we were able to show the importance of keeping seed phrases private and the necessity of gas in a wallet. Both topics are common sticking points for new users to Crypto.
5. User-friendly onboarding is a myth — But it doesn’t have to be
Crypto’s biggest barrier to mainstream adoption isn’t the technology; it’s the learning curve. Right now, it feels like a never-ending gauntlet of confusing interfaces, obscure terms, and trial-and-error. But it doesn’t have to be this way. Until we make onboarding more straightforward, crypto will remain a niche interest rather than a mainstream financial tool. The good news is that with the right resources and support, even the most hesitant users can find their way.
Best Practice Tip 5: Develop hands-on workshops where newcomers can practice using dApps in a guided environment, with mentors available to answer questions in real-time. Building a community where users feel supported can drastically reduce the learning curve.
Onboarding new users to crypto is challenging, but it’s also incredibly rewarding. The more we can simplify the learning process, demystify the jargon, and emphasize safety, the more we’ll empower people to take control of their digital lives.
If you’re ready to bring new users into the crypto world, or if you're looking for guidance on making your onboarding process smoother, let's connect. Reach out to me on LinkedIn to explore how we can help you make crypto education accessible and effective for everyone.
About the Author
Patrick is the Curriculum Lead at Yieldschool, with a diverse background spanning scientific research, legal studies, and decentralized finance. He holds a Ph.D. in Medical Biophysics and has experience as a research neuroscientist and science professor. During the pandemic, while pursuing his JD/MBA, Patrick discovered crypto and transitioned into a full-time career as a DeFi consultant, analyst, and blockchain educator. His expertise lies in bridging complex technical concepts with practical applications, making crypto accessible to all. Patrick has helped onboard hundreds of users into DeFi, empowering them to navigate the evolving landscape of digital finance.
The importance of tax planning in crypto: top mistakes
One of the most overlooked areas for businesses is tax planning. It’s easy to focus on building products, scaling operations, or managing liquidity, but failing to prioritize tax compliance can lead to costly mistakes. Over the years, we’ve seen clients make the same avoidable errors, often leading to stressful audits and hefty fines.
1. The unexpected tax bill
One of our clients, a mid-sized NFT project, expanded rapidly but paid little attention to their tax obligations. As their transactions scaled, they failed to keep adequate records of their crypto trades and staking rewards, resulting in a significant under-reporting of taxable income.
When the tax authorities conducted an audit, the company was hit with a retroactive tax bill and penalties totaling hundreds of thousands of euros. Their oversight? They hadn't properly classified crypto transactions as capital gains and overlooked the tax implications of staking rewards, thinking of them as non-taxable income.
This situation could have been avoided with proactive tax planning.
2. Common pitfalls and how to avoid them
We’ve identified a few common mistakes that businesses should be aware of when navigating the complex landscape of crypto taxation:
Misclassifying transactions
Different types of crypto transactions (trading, staking, yield farming) have different tax treatments. Many businesses fail to distinguish between them, leading to inaccurate tax filings.Tip: Use crypto-specific accounting software to track and categorize your transactions accurately.
Overlooking cross-border transactions
For companies operating internationally, ignoring the tax implications of cross-border crypto payments can lead to double taxation or unexpected liabilities.Tip: Stay informed about both domestic and international tax laws through resources like the OECD’s Guidelines on Crypto-Asset Reporting Framework.
Failing to plan for capital gains
Many businesses ignore the tax on capital gains from crypto trades, assuming that crypto assets won’t be subject to the same rules as traditional assets.Tip: Ensure that every crypto transaction is logged with details on acquisition cost, date, and sale price. Tools can help.
3. Staying ahead with proactive planning
The key takeaway here is that tax planning in crypto isn’t just about staying compliant; it’s about avoiding unnecessary financial risks. Having a tax strategy from the start can save you from major headaches down the road.
Our advice? Consult with a tax professional who understands the nuances of cryptocurrency, stay up to date with local regulations through resources like the IRS Cryptocurrency FAQs, and ensure your financial records are in order.
Crypto taxation may be complicated, but it’s far less painful when approached with foresight.
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Disclaimer : The goal of this newsletter is to inform and produce content related to management in the world of Web3. It is not investment advice. Investments in crypto-assets and NFTs are risky and can result in the loss of your entire capital. Always conduct your own research and exercise caution.