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Crypto Incentive Best Practices That Drive Real User Growth – Learnings From 50+ Launches
Zach Heerwagen
Jul 16, 2025
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5 min read
Tokenomics has been core to crypto since Bitcoin's genesis block, but despite countless airdrops there’s no playbook for driving sustainable growth via token incentives. While float strategies, market making, and CEX listings dominate the discourse, the question of how to reward users for their contributions to growth remains largely ignored. At Snag, we’ve spent three years partnering with leaders like Flow, OpenSea, Camp Network, ApeChain, and Pudgy Penguins. While most incentive programs flop, we’ve identified what actually drives growth.
#1: Reward Core Holders Like Kings: or Watch Your Assets Tank
For on-chain projects with tokens or NFTs, amplify incentives for holding, trading, or staking to pump value and drive hype. But don’t just rely on easily sybiled hype metrics. Use dedicated rewards, emission rates, or multipliers for assets held. Without encouraging financial participation and gating top earnings for users who have skin in the game you’re encouraging sybils and fueling sell pressure.
Tactics:
Reward consistently. Distribute rewards daily or weekly based on behavior type (holding/staking vs. trading) to build sticky habits.
Use multipliers. Apply multipliers for holding core assets, either paired with rewards for that contribution, or as standalone incentives that require continued participation and encourage long-term engagement over short-term speculation.
Separate incentive pools. Carve out dedicated token pools, shown as secondary points to clearly signal long-term value and reduce sell pressure.
Proof: Partners like Camp, Pixelmon, Uprising, Talus, and Wilder World built powerhouse pre-TGE communities around NFTs. Yuga and Pudgy nailed community-first momentum before launching $APE and $PENGU. In contrast, mindshare-only plays like Loudio crashed due to zero audience alignment. Meanwhile, Magic Eden’s recent Season 2 airdrop faced massive FUD for under-rewarding stakers.
Case: We restarted Camp Network's loyalty program in November 2024 after moving them over from a competitor, growing users from ~20K to ~250K ahead of their testnet launch and $30M Series A in May 2025. In the two months since launch, they've run two seasons, hitting 1M+ users and over 20M testnet transactions. The program didn’t just drive hype, it fueled their raise, turning social and community metrics into real onchain activity.
#2: Master Seasonal Cycles: or Lose Momentum Fast
FUD destroys projects through TGE delays post-hype, or ghosting on subsequent reward allocations causes loss of momentum. If you're going low float, high FDV, and not planning tokens within 6-12 months post-TGE, pray for god-tier product market fit or get ready to crash hard.
Tips:
Cap seasons at 6 months; we recommend 3 months with <1-month gaps (or none). Quick pivots retain users better than endless campaigns.
Evolve mechanics each season to maintain engagement and shift focus. Start with social and referrals; then move toward financial and on-chain contributions.
Track quest completion to identify which actions drive engagement.
Hard Lessons: Blur and Eigen stalled post-hype because delays killed momentum. Blur's 2023 airdrop sparked an inorganic surge, followed by a 98% token dump. Eigen's points system showed early promise, but without timely follow-up rewards, only the earliest adopters weren’t left holding the bag.
#3: Prioritize Community Incentives: Don’t Burn Budget on Noise
KOLs still dominate Web3 marketing. but managing them is challenging and most other channels are bot-infested, with just 20% of wallets holding 90% of ETHs TVL. Instead grow your community by tying multipliers, point bonuses, or quests to partner NFTs/tokens. This drives the best ROI via organic growth, and NFT communities shine with whales proven to have disposable income, time, and loyalty.
Examples:
ApeChain drove 250K unique users and hundreds of thousands of NFT transactions by rewarding multipliers for ecosystem NFTs held, sparking fierce community competition and engagement.
$PENGU didn't stop at Pudgy holders; it rewarded top Web3 communities across ETH and SOL, leading to 60+ apps and massive traction since its 2024 launch.
Final Feedback: Avoid Common Pitfalls
Choose your competition structure wisely. Use leaderboards to spark whale competitions or opt for personal progress views to encourage broad participation. Badges tied to hidden rewards can highlight unique contributions to gamify earning.
Keep it fresh. Refresh quests daily or weekly with raids, events, or gamenights. Your most loyal users crave ways to differentiate themselves.
Avoid generic questing platforms. Generic questing platforms like Galxe, Zealy, and Layer3 attract 95%+ sybil traffic. Your quests are doomed without a custom strategy.
Beyond avoiding common pitfalls, like chasing hype metrics or under-rewarding real users, every program is unique and there’s no one-size-fits-all approach. The most effective programs start with a clear, quantifiable strategy tailored to your ecosystem. We’re constantly learning from our partners’ creativity and would love to hear about your project and growth goals.
Ready to overhaul your incentives? DM us on X or reach out here for a free incentives audit.
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