Crypto Quill

Ethereum co-founder Vitalik Buterin just delivered a blunt reality check to the entire crypto industry. In a viral post on X, he declared that paying people to use your product can backfire badly if those users vanish the moment the rewards stop.

Vitalik posted a long thread that quickly racked up millions of views. His core message was simple yet brutal: incentives only work when they solve real short-term risks for early adopters. Once the project matures, token handouts often attract the wrong crowd.

“Good incentives compensate for temporary risk or inconvenience in the early days,” he wrote. “Bad incentives attract people who never cared about the product and leave when the money stops.”

He pointed out that many teams now launch tokens purely to create hype and pump prices instead of building something people actually want.

The Two Types of Token Incentives He Broke Down

Vitalik drew a clear line between healthy and toxic reward systems:

• Healthy incentives help real users overcome real hurdles (think high gas fees in the early days or lack of liquidity).
• Toxic incentives lure “tourists” who farm points, sell tokens, and disappear, leaving projects with empty metrics.

The second type has become the norm in 2024 and 2025. Countless new chains and apps promise huge airdrops and yield just to boost total value locked (TVL) numbers for a few weeks.

Why This Warning Hits So Hard Right Now

The crypto market has seen wave after wave of point-farming mania. Projects announce massive token rewards before they even have a working product. Users rush in, TVL explodes, founders cash out, and then everything crashes when rewards end.

Vitalik wants the industry to grow up. He urged builders to focus on organic adoption instead of paid growth.

“Build things people want to use without payments,” he said. “That is the only sustainable path.”

Real Numbers Show the Problem Is Massive

Look at some of the biggest TVL spikes in the past year:

The pattern repeats every cycle. Projects that pay users the most lose them the fastest.

What Builders Should Do Instead

Vitalik laid out a clear playbook for teams that want to last:

• Solve real problems first
• Launch tokens only after real usage exists
• Use incentives only to fix short-term friction
• Accept slower but healthier growth

He even praised projects that take the hard road of building useful apps without huge reward promises.

This approach directly affects everyday crypto users. When projects chase fake growth, regular holders end up holding bags while insiders sell at the top.

The Ethereum founder basically told the entire industry to stop treating users like ATMs and start treating them like actual users.

His post struck a nerve because everyone has lived through the pain of rug-pulls and ghost-chain seasons. People are tired of fake volume and empty promises.

Vitalik reminded everyone why many of us got into crypto in the first place: to build tools that matter, not to run sophisticated Ponzi schemes dressed up as innovation.

The message is clear. The projects that survive the next five years will be the ones people actually use, not the ones that paid them to pretend.