Tokens as Attention Magnets: The New Frontier of Crypto Marketing

In the ever-evolving landscape of cryptocurrencies, we have seen a convergence toward tried-and-true methods of building networks and innovative experiments with new concepts only available thanks to blockchain. Both the successes and failures of these approaches are essential to understanding how the crypto market will change going forward and how to choose a token-based project to support.

The recent airdrop frenzy, which has seen billions of dollars flow from VC-backed protocols to their earliest users and supporters, has completely changed how a project launches a token. Before Web3, tech companies would create a product, raise money to support its growth, find new customers, and go public to allow anyone to trade its shares after several years of development. Now, crypto companies have a built-in system to distribute equity to their users and a hyperfinancialized environment in which massive pressure exists to become “community-owned” and “decentralized” as quickly as possible. The result is projects that would typically be years away from a public offering releasing a token to its users in as little as a year. Companies like SpaceX choose to stay private because they can make decisions without the backlash and outcry of the average investor, who may not understand why they are choosing to focus on long-term growth instead of short-term price increases. 

When users can choose between protocols offering stable but modest yields from token issuance and those promising astronomical returns, the allure of quick profits often wins out. This causes a flywheel effect, where high returns cause lots of liquidity to flow into a project, increasing the token value and causing returns to stay high until they are fully saturated by demand. This creates a perverse incentive structure where protocols are encouraged to offer unsustainable rewards to capture user interest and capital deployment at the cost of long-term sustainability. Protocols with more conservative, long-term outlooks may struggle to gain the attention and liquidity needed to bootstrap their ecosystem, regardless of their underlying merit. 

Using tokens as a bootstrapping mechanism isn’t entirely without precedent. Silicon Valley has long recognized the “cold start problem” faced by new platforms, often solving it through VC-backed subsidies and aggressive user acquisition strategies. In theory, distributing tokens to early users should create stronger alignment and stickiness. After all, these tokens represent a stake in the project’s future success, giving users a reason to stick around and contribute to the ecosystem’s growth. In practice, the results have been mixed at best.  The lack of vesting schedules for user-distributed tokens, combined with the self-interested nature of most participants, has led to airdrop farming, where users accumulate tokens through early participation, only to dump them immediately upon launch, often to the detriment of the protocol’s long-term health.

Moreover, perceiving tokens as “equity,” even when they confer no actual cash flows and solely governance rights, can lead to inflated expectations. Users may ascribe more value to these tokens than simple cash incentives, even though the latter often provides more flexibility and upside potential across a diversified portfolio of projects. 

At their base level, these emissions provide tokens with attention and mindshare. Recognizing the importance of attention in this economy and the fact that this attention can come from more than emissions, some projects have begun to heavily invest in social media marketing and community engagement. The new paradigm for crypto marketing blends memes, hype, and the insinuated promise of outsized returns. 

Take, for example, Pendle Finance. Alongside their official Pendle account, the “Pendle Intern” on Twitter regularly posts about yield opportunities and novel ways to interact with the protocol. These educating and informative accounts serve a clear purpose: keep their protocol top-of-mind for potential users and create a sense of understanding around their offerings.

Other projects have taken this approach to even greater extremes. Berachain and Monad, two up-and-coming L1s, have cultivated meme-filled communities on Discord and Twitter. Berachain, in particular, has garnered attention with the “Berachain Baddies,” featuring images of attractive women in bear masks and branded shirts. While some may dismiss this as gimmicky, it is a calculated move to capture mindshare in an increasingly crowded market. What remains unclear is if this marketing style will work after the launch of their token, the community is rewarded, and another new project comes promising even greater returns and more innovative technology. 

As the crypto industry matures and legitimizes, it must grapple with the long-term implications of the attention-driven economy. While using financial incentives has undeniably been effective at driving short-term engagement, it could lead to future instability. Projects that balance capturing attention and building sustainably will likely emerge as long-term winners. Similarly, marketing strategies focusing on community building rather than pure hype may prove more effective in cultivating a loyal user base. 

As users and investors, we are responsible for rewarding projects prioritizing long-term sustainability over short-term gains to create a more robust ecosystem. The attention economy is here to stay, but how we engage with it will determine its ultimate impact on the industry’s future. 

By Lincoln Murr

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