Why community matters in crypto?
The key question everyone in the space should know the answer to, and while many understand it, there are subtle complexities that make it challenging:
Why is community critical in crypto, and how does it directly influence a token or project’s growth? Understanding these nuanced details truly reveals how community plays a pivotal role in driving both value creation and widespread adoption.
Today’s content will focus on two essential aspects:
- Why community matters in crypto?
- 2. How community involvement can impact a project’s success, supported by real-world examples?
We’ll also dive into how to make the most out of being part of a community, not just by participating in a project for potential rewards, but by actively contributing and growing, much like many of us are doing within the @monad_xyz ecosystem.
Click the link below to view the entire Discord discussion @Quantico_xyz
It’s possible that I overlooked certain Alpha or lessons that are hidden throughout the whole talk we had the previous evening.
Let’s apply game theory as the foundation to explore community-driven crypto projects, using two models to examine the dynamics at play. After identifying the Nash Equilibria for both models, we’ll dive into historical data and analyze projects on both ends of the spectrum.
- The Developer Ecosystem & Community Focus Payoff Matrix:
In this model, we observe how the interactions between the core team and contributors impact ecosystem sustainability. The image above clearly outlines the indicators.
The Nash Equilibrium, which represents the ideal outcome, occurs when the core team consistently rewards contributors, and contributors actively participate in project development and community building. This creates a mutually reinforcing cycle of engagement, leading to a sustainable and thriving ecosystem.
2. Governance & Decentralization Matrix:
The second model examines the interaction between decentralized governance and community involvement. As shown in the image above, the Nash Equilibrium here is achieved when the community actively engages in the governance process, contributing to decision-making and policy formation.
This equilibrium benefits both the core team and contributors by establishing long-term trust, transparency, and fostering a vibrant ecosystem that can adapt and grow based on collective input.
By confirming the Nash Equilibria for both models, we can now move forward with historical data analysis to explore real-world examples of projects that thrive by aligning these principles, as well as those that struggle without such equilibrium.
Over the past decade, we’ve seen numerous crypto projects emerge, but only a few have truly made a lasting impact. Take Ethereum or Bitcoin, for example — they dominated the space for years.
Then, Solana got added to that list in the last cycle. These projects didn’t initially focus on building a traditional community; instead, their developers were the community. Back then, there was little competition, so anyone interested in these innovations naturally became part of their growth.
However, as the ecosystem matured, competition has increased. Now, there are many similar products vying for attention. In this environment, having a strong community is what helps projects reach the right users. But the critical question is, why should anyone go out of their way to promote and support a project? While rewards can motivate users in the short term, they are not a sustainable solution for long-term engagement.
Let’s take Solana as an example. There’s no doubt it’s a high-quality product, but when the FTX crisis hit in November 2022, there were many uncertainties. Despite this, the community kept supporting it, continuing to build and buy into the vision.
This resilience helped drive the project through difficult times. The meta here, similar to what we’ve discussed with “shitcoin” cycles, shows that when a project’s user base faces a dry spell, a strong community can keep the momentum going, provided the product is solid. On the flip side, rewarding users for minimal contributions, as we saw with Aptos, can backfire.
While Aptos is a good product, offering incentives for small actions can lead to a lack of genuine emotional connection. Users may quickly exit after cashing in rewards, leaving the network with ghost months and no long-term value. This is why a strong, engaged community is essential.
Now, let’s move to how community involvement directly impacts a project’s success, using real-world examples. @monad_xyzhas not only built a top-tier product but also fostered an environment where people can both earn and learn. In this ecosystem, real individuals are gaining skills — myself included. I didn’t know how to use Photoshop, video editing software, or even development tools, but now I’m improving in these areas every day. Thanks to the support of @pipeline_xyz interns, Evo Yudha Samael, and @port_dev, my growth has been exponential.
By creating a hub like Monad, where the focus is on empowering and improving individuals, the product becomes more than just a service. It becomes a driving force for personal and professional development, making the project unstoppable in the long run. This is the kind of community that outperforms others, and it’s the reason why community truly matters.
If you find this useful, please follow @cryptodurgesh and Medium Page. This journey is here to stay forever.
