Vitalik Buterin Criticizes Token Distribution for User Acquisition

Buterin urged the industry to focus on creating useful applications.

Ethereum co-founder Vitalik Buterin has expressed his views on audience incentivization strategies in crypto projects. He urged the industry to focus on creating useful applications rather than attempting to buy user attention.

My first reaction to this was:

“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”

My second reaction to this was:

“I see how this makes total sense from a… https://t.co/fnly2iCGi5

— vitalik.eth (@VitalikButerin) February 12, 2026

Buterin believes financial incentives are justified only as compensation for early-stage inconveniences while the protocol is still “raw.” Once a project reaches maturity, the need for subsidies should disappear.

The developer warned against attracting users who come solely for rewards. Such an audience does not bring long-term value and leaves the platform as soon as the payouts end.

Good and Bad Examples

As an example of acceptable incentives, Buterin cited rewards for providing liquidity in DeFi. These payments compensate early investors for the heightened risks of hacks and bugs inherent in new projects.

He described paying for social media activity as the worst-case scenario. This approach attracts people looking to game the system with minimal effort, creating the illusion of a large audience but harming the community’s quality.

Buterin also noted the “cynical nature” of the 2021-2024 market. He believes that during this period, the “real product” often became the token itself and the speculation surrounding it, with incentive programs merely sustaining this bubble.

Earlier, Buterin discussed the potential process of merging Ethereum with artificial intelligence.