Vitalik on Cryptocurrency Project User Incentives: Focus should be on developing utility, not indiscriminately expanding user base

BlockBeats News, February 12th, Ethereum founder Vitalik published a post detailing his views on the incentive mechanisms for crypto projects. Vitalik believes that the incentive mechanism should distinguish between two cases: compensating for the temporary costs of the project's early immature stages is beneficial, while attracting users who will not use the project after it matures is harmful. Many decentralized finance liquidity incentives are reasonable because they compensate for the risk of new projects being hacked or team fraud. However, paying users to post tweets to gain attention is a wrong practice, as this kind of incentive may lead users to sacrifice content quality for maximum gains.

Vitalik emphasized that the ideal incentive mechanism should precisely compensate for the temporary shortcomings of the protocol, which will disappear as the protocol matures, while not attracting users who will not have the opportunity to stay. Successful applications should focus primarily on developing usability rather than indiscriminately expanding the user base through paid incentives.