Gamification in DeFi: What Works and What Fails

Gamification has become a crucial tool for DeFi platforms to attract and retain users in an increasingly competitive market. According to industry experts, successful projects use seven strategies to turn engagement mechanics into sustainable growth.

The first strategy is 'Share Revenue To Sustain Retention', where platform revenue is routed back into insurance funds, token burns, and vault mechanics. This approach is exemplified by Hyperliquid, which kept users engaged despite the lack of points campaigns or public leaderboards.

Marcel Thiess, a Crypto & DeFi Executive, notes that gamification is effective at bringing people in but not necessarily keeping them. He emphasizes the importance of economics working on their own to retain users.

The second strategy is 'Lock Governance To Build Loyalty', where vote-escrowed models align long-term holders' interests with the health of the protocol. This approach is seen in ve(3,3) protocols like Aerodrome and Velodrome, which transform passive investments into active strategic games.

Audit Origins reject vanity metrics, focusing on retention as a measure of genuine engagement rather than short-term rewards. They highlight that most 'engagement' is actually rent-seeking in disguise.