Vitalik Buterin is speaking out about how crypto projects grow — and he’s making one thing clear: paying users just to show up is not a real strategy.
In a recent discussion on X, Buterin pushed back on the idea that crypto apps can’t survive without airdrops, token rewards, or constant payouts. Some people argued that without handing out free tokens, projects won’t gain users or build momentum. But Buterin says that mindset — “pay users or fail” — is the wrong way to think about growth.
He didn’t say incentives are always bad. What he said is that they need to make sense.
According to Buterin, a healthy system looks more like a normal business. Some users pay for value. That revenue helps fund the platform and benefits other users. There’s a real economic loop. That’s sustainable.
What’s not sustainable is paying everyone just to create activity.
He explained that early rewards can be fair in certain cases. For example, liquidity providers in decentralized finance take real risks. A new smart contract could have bugs. A protocol could get hacked. A project could fail completely. In those early stages, offering rewards makes sense because users are taking on higher risk. They deserve compensation.
But once a project matures, completes security audits, and builds trust, those risks go down. At that point, massive rewards are no longer necessary. If a platform still needs to pay people heavily just to use it, that’s a red flag.
Buterin warned that many projects confuse short-term hype with long-term success.
Airdrops and social media reward campaigns can make numbers look impressive. User counts spike. Activity increases. Engagement metrics explode. But often, that activity disappears the moment payments stop. Why? Because many users were only there for the reward — not because they cared about the product.
He also pointed out the difference between DeFi apps and social platforms. In DeFi, one user’s capital works the same as another’s. But in social networks, quality matters more than raw numbers. A platform filled with low-effort posts created just to earn rewards doesn’t build real value.
When projects pay people to promote content, it often backfires. Instead of thoughtful contributions, you get spammy posts designed only to maximize payouts. Once the rewards end, the creators leave.
Buterin highlighted something important: strong communities are not built only on money.
Real community members write documentation. They build tools. They answer questions in forums. They help newcomers. And many of them do it without expecting payment. Over time, those contributions make the project stronger.
He believes incentives should solve temporary problems — like offsetting early risk or overcoming early weaknesses. But as those weaknesses fade, the incentives should fade too.
If a project relies on constant rewards to keep users around, it may never build something truly useful.
Buterin was direct about what needs to happen next. In the past, crypto projects could focus on hype and storytelling. That was often enough to fuel speculative bubbles. But today, he says, that’s no longer enough.
Now, the real work matters.
Projects need to build apps that people genuinely want to use. Apps that solve problems. Apps that offer real value.
In his view, the crypto industry is slowly moving in that direction — away from reward-driven growth and toward real utility. Incentives still have a place, but they should be temporary tools, not permanent crutches.
