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Vitalik Buterin, co-founder of Ethereum, has weighed in on a growing debate within the crypto industry over whether projects must financially reward users to achieve adoption, arguing that incentives can help — but only when used carefully.

His comments came in response to an online discussion claiming that crypto applications cannot attract meaningful usage without airdrops, token rewards or other financial incentives. While Buterin acknowledged that the argument reflects the current realities of the industry, he said the issue is more nuanced than simply “reward users or fail.”

Incentives Can Work — If Used Correctly

Buterin explained that some forms of incentives are economically healthy, particularly when they compensate early adopters for risks associated with using new or experimental platforms. For example, liquidity rewards in decentralized finance (DeFi) can offset the higher technical and security risks that typically exist in early-stage protocols.

In such cases, he said, incentives function as part of a sustainable economic loop rather than a marketing expense.

However, he warned that paying users purely to generate activity, such as incentivizing promotional posts or rewarding users who would not otherwise engage with a mature product, can attract low-quality participation and disappear once payments stop.

Quantity vs. Quality of Users

Buterin warned that aggressive reward campaigns can sometimes create the illusion of adoption while failing to build a committed long-term community. Even if user numbers rise during incentive programs, the overall value of the ecosystem may weaken if participation is driven solely by short-term profit opportunities.

He said that the challenge is particularly important for social or community-driven platforms, where the quality of contributors matters more than the raw number of accounts interacting with the application.

Focus Returning to Real Product Value

According to Buterin, the crypto sector is gradually moving toward a model where long-term success depends less on incentive-driven growth and more on building applications that people genuinely want to use. The most effective incentives, he argued, are those that temporarily compensate for the early disadvantages of a young platform and naturally fade as the product matures.

“The bulk of the effort should be on making an actually useful app,” he wrote, suggesting that the next phase of crypto adoption will favor projects that combine practical utility with carefully designed, targeted incentives rather than relying on broad reward campaigns to attract users.