Vitalik Buterin Says, Focus on Utility, Not Incentives

Key Highlights

• In a tweet, Vitalik Buterin affirmed that incentives are good if they compensate for temporary risks in early projects.
• On the other hand, it could turn into bad incentives if they attract users who would not use a product organically.
• He urged the community to build genuinely useful apps for organic growth and not depends on hype

On February 12, Ethereum co-founder Vitalik Buterin shared a post on X (formerly Twitter), where he sparked discussion in the crypto community with a detailed explanation of token incentive models. 

Vitalik Urges Community to Build Useful Crypto Apps

Through this post, Vitalik stated that projects should focus on creating genuinely useful applications rather than paying users to boost adoption. 

Vitalik Buterin’s comments came in response to online users, Squiggly Hair Shanks, posted on February 11. The post stated that crypto projects have no chance of attracting users without financial incentives. “You either incentivize users or you won’t have any,” the tweet stated. 

Vitalik mentioned that “no normal person” uses new apps without rewards like airdrops or liquidity mining. He cited Infinex, a decentralized perpetual exchange, as a major example. The project’s founder, Kain Warinde,reportedly resisted “predatory” airdrop farmers. 

Buterin stated the absurdity of incentive-based logic from a non-crypto viewpoint. “And that’s why I just got my $2,725 check of fileverse tokens now that fileverse has grown to the point where my dad regularly writes docs in fileverse that he sends to me,” he said. 

In a thread, he highlighted the difference between healthy and harmful incentives. He affirmed that projects with sustainable models, like redistributing fees from paying users to others, are “totally fine.”

However, he also warned that early-stage payouts designed to boost network activities often attract low-quality “mercenaries” who leave as soon as the money stops following. 

According to him, good incentives compensate users to survive in risks that fade as projects mature, like hacks or scams in early DeFi protocols. On the other hand, bad incentives just attract users who have no interest in real value. He pointed to paid low-effort tweets that game engagement metrics disappear once rewards are pulled.

He said, “The bulk of the effort should be on making an actually-useful app. This was historically ignored because it’s not necessary for narrative engineering to create a speculative bubble. But now it is necessary. And we do see that the successful apps now, the apps that we actually most appreciate and respect, do the bulk of their user acquisition work in that way, not by paying users to come in indiscriminately.”

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