Interesting problem in crypto:

If you offer incentives you pump your usage and distribution.

Also, you attract a userbase that cares more about token prices than product.

This applies less to marketplaces like Blur, etc. More to products where trading is not the main use case.

helping others build with LLMs and ML | YC S22, CMU CS + LTI | I write technical posts for ML builders at http://dbmikus.com

Another problem I see a lot: 

Value captured < value of incentives delivered

Incentives and value creation need to be aligned otherwise you're over/underpaying for contributions (which is likely unsustainable)

Fixing this requires more rigorous  token distribution controls (e.g., vesting, rep. bonuses, hurdles, etc)

Totally agree.

Companies don't often pay the cost of delivering incentives besides some dev work to set up the incentive program. Those that get dumped on as exit liquidity pay.

When value created is <= value captured, crypto is a closed circuit zero sum game. I'm interested in positive sum games where all win.