@elbert765

Token incentive competition can destabilize ecosystems when projects focus solely on distributing rewards to attract users. Such strategies often lead to over-minting tokens, inflationary pressure, and short-term behavior that does not support long-term engagement. Users may chase incentives across multiple projects, ignoring community contribution, governance, or product adoption. Effective mitigation requires designing thoughtful reward mechanisms that prioritize meaningful participation, utility, and token retention. Projects that balance incentives with sustainable tokenomics avoid a race-to-the-bottom scenario, ensuring that engagement translates into tangible ecosystem growth, token value appreciation, and long-term stability rather than transient activity driven purely by reward chasing.

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