Humans All The Way Down: A Soul Search Into DeFi Community Growth

Successful DeFi protocols harness community as a powerful growth lever. This post uncovers strategies, challenges, and victories that shape their ecosystems.

By focusing on incentives, metrics, contributions, and governance, we reveal subtle but meaningful lessons that could benefit many projects. This post shares insights from seasoned protocols—those that have weathered challenges, evolved, and continue to shape DeFi’s future.

In researching this post, we had in-depth conversations with six core DeFi contributors who generously shared their invaluable insights. Mastery lies in the intimate details, and this post offers just a glimpse. If you're itching to dive deeper, join these communities and get involved.

• @DeFi_Made_Here - Instadapp Fluid, high efficiency lending/borrowing  
• @wagmiAlexander - Aerodrome & Velodrome, trading and liquidity on Base and Optimism respectively
• @MattLosquadro - Synthetix, the liquidity layer for onchain derivatives
• @omgcorn - Yearn, the decentralized, automated yield aggregator 
• @amplice_eth - Gearbox Protocol, the leverage layer for DeFi 
• @kmets_ - Aladdin DAO, flexible farming, leverage, stability products through Concentrator, CLever, and f(x) Protocol 

For these conversations, we targeted projects with a $70 to $700 million TVL range during Aug 2024. As projects scale, their needs and opportunities evolve. In the future, we will explore the unique dynamics of larger protocol ecosystems. 

I’ve spent the last few years helping build the Reserve protocol ecosystem. In that time, we grew from $0 to over $200M in TVL onchain, mostly during a bear market. But the journey was not without mistakes. Researching and writing this post has been a chance to zoom out, gain perspective, and offer it as a public good. I hope it proves helpful to you.

This post is for:

• Crypto project and community leaders eager to expand their toolkit and strengthen community-driven growth.
• Job seekers aiming to break into crypto and contribute meaningfully.
• Community experience enthusiasts who want to create spaces where people genuinely want to gather and collaborate

What Community Is

Contributions are the lifeblood and proof of work in a community. In the knotty labyrinth of DeFi, where products are currently at the fringes of experimentation, the earliest value lies not in broad numbers but in the depth of engagement. 

Borrowing from Gearbox Co founder @ivangbi_’s terrific post 1-9-90 Community and Brand Building, the community falls into three buckets… 

• 1% are devs, builders, teams, and those who create. 
• 9% are users, writers, funds, researchers, and angels who passionately observe the space and make some commentary. Not really teams, but not passing-by noobies either. 
• 90% are random traders and speculators who actually don’t ever read docs. They read headlines, buy and trade coins, and hold crypto - but they are not bothering themselves with questions of research. Just yellow press enjoyers and traders. They are not stupid, they just don’t bother to get married to any investment. Fundamentals for them don’t exist usually, they just want charts.

In the context of the funnel metaphor, 90% are top-funnel, 9% mid-funnel and 1% are bottom-funnel.

Here, we apply the 1-9-90 model to a standard marketing funnel, mapping interactions from initial awareness to passionate advocacy

With few exceptions, you must start community building with 1+9, and then work from there. 

Emerging Defi platforms without product-market-fit, demand a blend of technical education and ongoing hands-on experimentation that only the curious and entrepreneurial are willing to cut their teeth on. A handful of dedicated, high-caliber contributors can outshine thousands of casual enthusiasts. 

Key contributions include: 

• Developers: Create data dashboards, collateral plugins, or new primitives.
• Deployers/Integrators/Apps: Utilize code, assets, or incentives to compose and distribute new offerings
• Liquidity Providers / Farmers: Deposit assets into pools or vaults, earning fees or yield.
• Borrowers: Provide collateral and take out loans
• Leverage Farmers: Loop deposits and borrows, manually or with one-click, to amplify yields.
• Minters: Deposit collateral to mint leveraged tokens or stablecoins.
• Token Stakers/Lockers: Lock governance tokens, to gain enhanced governance rights and rewards.
• Governors: Make proposals, elect councils, direct token emissions, and support protocol upgrades.
• Traders: Trade spot or derivative swaps.
• Researchers/Storytellers: Provide analysis and education across various mediums.

While the list above is not exhaustive, it’s important to note that these individuals are genuine “users,” not mere onlookers or speculators. In many DeFi communities, this core group typically make up 10% or less (aka the 1s and the 9s in 1-9-90) of the total members. A meaningful portion of these contributors will be sourced through Business Development efforts, highlighting the close connection between community building and BD. For ecosystem builders, the challenge lies in cultivating space to identify and elevate these critical participants.

Healthy Metrics

Low-priority metrics include 𝕏 engagement, YouTube views, Reddit posts, Discord participants, community call attendees, and feedback from token holders who aren’t actually using the protocol.

Focusing on these superficial metrics can create the illusion of engagement but ultimately leads to misleading insights. As the proverb goes, 'If you want to make the wrong decisions, ask everyone.'"

If you want to make the right decisions, follow the data. The protocols surveyed herein, all viewed achieving $1 billion in sustained TVL as their next significant milestone. TVL is, without question, the most popular metric, but it carries layers of nuance. Parts of TVL can often be quite mercenary, making it ever more important to explore the deeper components that contribute to it. Here are a few to consider:

• Liquidity / capital supply
• Assets listed
• The quality and number of apps of integrations
• Transaction volume
• Loans outstanding
• Monthly active users (MAUs)
• Revenue and/or profits

In our conversations with surveyed projects, the quality and quantity of integrations surfaced as a leading Schelling point for community growth. Yet, the ultimate aim remains sustained MAUs, a more true measure of ongoing engagement. While the investment required to build these integrations is material, and the switching costs are high, each high-quality integration provides an additional layer of compounding value. Each new integration unlocks pathways to greater volume, fueling MAU growth and, ultimately, driving higher TVL, revenue, and eventually profits.

“In the early stages, the impact of 10 to 20 major users can far outweigh that of thousands of casual ones. A small, dedicated group can create the initial momentum to scale toward hundreds of users and beyond”, as noted by @DeFi_Made_Here.

Misconceptions and Motivations 

There’s a difference between superficial engagement and genuine community building. Communities focused on vibes or speculation struggle to convert engagement into protocol users, leading to long-term failures. True community building requires deeper support and ongoing contributions at the middle and bottom of the funnel. Several projects noted that pivotal community-building is often led by the Business Development teams in private, high-signal Telegram groups shared with other protocols. It’s common for projects to have hundreds of such groups, each dedicated to different protocol partners.

Balancing extrinsic and intrinsic incentives is crucial. Extrinsic campaigns, like learn-to-earn quests or low qualification airdrops, often attract transient, mercenary participants. These campaigns typically lose 90% or more of users when incentives dry up. Careful management of these campaigns, such as using multiple work touchpoints, offering long-term rewards and attribution tracking, can improve retention.

Similarly, incentivized KOLs can help spread the word, but choose wisely—many operate like mercenaries, and it often shows in the quality and authenticity of their efforts, or lack thereof. On the other hand, thoughtfully designed, enduring community content programs—like those at f(x) protocol—defy this trend and have thrived within tight-knit communities.

Intrinsic incentives—such as a clear mission, differentiated product, transparency, and a positive builder experience —are key to long-term engagement. Fully onchain protocols with transparent incentive loops deliver direct value to users and strengthen network effects. Aerodrome excels at this by ensuring that all behaviors remain integral to the protocol, free from offchain intermediation.

A few protocols noted that retroactive grants and rebates are powerful tools that blend extrinsic rewards with intrinsically motivated contributions.

Aligning Governance and Power Dynamics

There is often a gap between the appearance of community governance and real decision-making power. When a few entities dominate, the community’s role is reduced to a facade, raising concerns about the project’s commitment to true decentralization. This is a common issue.

Potential solutions lie in how tokens are distributed—such as fair launches—aligning governance voting schedules with onchain incentives, or establishing official delegate programs. A few interesting approaches are noted later in this post.

The Human Element in Community Building

Emerging systems rely on building a trusted brand, and that begins with cultivating a community. Broadcast announcements and tweets are insufficient for fostering a thriving community. Your earliest users need personalized guidance and meaningful support. 

Focus on one-on-one engagement with the 10 to 20 individuals or projects that show the greatest potential as long-term contributors. As those relationships deepen, scale organically—20 becomes 40, then 80, and so on.

Prominent team members with a strong social presence, who can explain the project in clear, accessible terms, become valuable marketing levers. Although this role often falls to the founder, it doesn’t have to be theirs alone. Consistent and clear communication is the most critical element, as @wagmiAlexander put it: "Even with immutable code, it’s humans all the way down."

Deliberate Spaces 

Be intentional when structuring community spaces. With limited resources, entertaining speculators diverts attention from real growth drivers, leading to inefficiency. This shift not only weakens community dynamics but also dilutes the influence of real value creators. While speculators have their place, their moods swing with unpredictable market forces—of which only project adoption is within your influence. Invest over 90% of your efforts into educating real users and gathering feedback on product adoption. Builders and innovators can’t thrive in a sea of noise; ill-informed conversations kill valuable network effects. As your project matures, encourage the community to create its own spaces.

Caution Around VC Intoxication

In a recent episode of the All-In Podcast, venture capitalist David Sacks remarked, "the big thing that's happened in our industry is we had a bubble in 2020 and 2021 and we just had a ton of capital come into the industry because the federal government airdropped $10 trillion of liquidity onto the economy in reaction to Covid." This flood of capital didn’t just boost markets—it overwhelmed the VC industry, saturating it with cash. As a result, the barrier to entry lowered, allowing less experienced, opportunistic individuals to label themselves as VCs.

Funding announcements or logo-bragging don’t equate to genuine community engagement. Projects that lean too heavily on this form of communication risk revealing a lack of true user involvement. Some VCs adopt a 'spray and pray' strategy, prioritizing short-term exits over sustainable growth. Their focus remains on quick financial returns rather than the protocol’s long-term success.

In contrast, VCs who actively participate in governance, hold tokens beyond vesting, provide analysis and foster ecosystem partnerships become invaluable allies. When flashy funding announcements surface, it’s worth pausing to assess how past and current investors are helping translate the project into real user traction. And if you’re the one making the announcement, its useful to remember that the most valuable potential contributors and partners will likely dig deeper than a press release.

Governance Lessons and Wins

Governance matters, but in early days, builders and users are the bedrock of TVL growth, which in turn is the heartbeat energizing governance. For example, during Yearn’s peak billion-dollar TVL phase three years ago, governance participation was 50x to 100x higher than it is today. Governance sits at the bottom of the funnel.

To frame this differently, picture the watering holes on the African savannah where elephants, lions, gazelles, zebras, hippos, and crocodiles gather. These watering holes thrive under a natural constitution governed by the land and the inhabitants. In this metaphor, the water represents TVL—without it, the number of “governors” dwindles.

Before participants are ready to govern, they must first become active users or contributors. When TVL is low, participation wanes, concentrating power in the hands of a few and weakening both community cohesion and governance. To build a strong community, focus on increasing TVL—governance will naturally follow. While this post won’t delve deeply into governance models, I’d like to highlight a few interesting approaches worth exploring.

Protocols like Velodrome and Aerodrome use a fully onchain approach, with integrated governance & rewards through mechanisms like veTokenomics enabling participants to vote on emissions and earn a share of fees and incentives. Decentralized front ends can choose independently whether to include new versions of the protocol in the future. This model eliminates the need for traditional DAO governance forums or Snapshot votes, creating a "pull" system led by engaged participants rather than a "push" from external facilitators. Aerodrome has fostered a community culture where voting and rewards days (Wednesdays) are eagerly anticipated. f(x) protocol within Aladdin DAO, uses a similar method.

Delegation in token voting is essential in DAOs where several critiques arise. Smaller token holders may not always engage in governance, but some are willing to delegate their votes, making delegation a helpful solution to broader participation. Synthetix has found success with representative councils, where 4-8 members are elected by SNX token holders. The Spartan Council leads protocol changes, the Ambassador Council handles external partner proposals, and the Treasury Council manages stipends and payments. Any community member can run for a council seat, with a 4-month term and a stipend of 2,000 SNX per month.

In early 2024, Pyth Network adopted a clever cross pollination strategy and targeted an airdrop of PYTH tokens to Synthetix governance veterans. Eligible recipients were those who either voted on proposals or contributed meaningfully to governance. To claim the tokens, participants had to stake them within a specific time window, creating an incentive for deeper involvement. Any unclaimed tokens were returned to the Synthetix Treasury, ensuring that only those genuinely engaged in governance, rather than speculators, benefited from the distribution

Unfortunately, none of the protocols I spoke with reported groundbreaking approaches to governance communications or dashboards. Most stick to the familiar—proposals on discussion forums, voting through Snapshot or Tally, and regular updates on 𝕏 and Discord. It seems we’re all navigating the same fragmented waters here.

A litmus test for governance. While governance is in its infancy, I’ll leave you with an observation from @MattLosquadro: “The biggest litmus test is whether a project leader can come to governance and be pushed back by the community, either fully or with changes. This helps keep community members engaged.”

Surprises Along The Way

Despite the abundance of composable infrastructure, @omgcorn shares “it's curious how some protocols opt to build from scratch rather than leverage existing, battle-tested, and audited code. Licensing proven systems and integrating their network effects should be an obvious choice, but perhaps this reflects where we are in the cycle—still early.”

Moreover, the drive to build rather than buy may stem from the need for new protocols to justify their token's utility. As core innovations mature into a more 'Lindy' state, coupled with a growing understanding of compounding network effects, current hesitations may evaporate.

Community and TVL success is deeply tied to responsiveness and adaptability. DeFi has had a quieter cycle recently, but innovations like liquid restaking tokens and points farming have surged. Take Pendle, for instance, a protocol in the right place at the right time that navigated the market's currents skillfully, earning its near-blue-chip status. @amplice_eth highlighted “that it’s not just about innovative products, liquidity, or oracles; it’s about being a DeFi power user with an ear to the ground, aligning opportunities with the right timing.”

“Aerodrome bet on token utility, system immutability and decentralization, not VC alignment or exit liquidity” says @wagmiAlexander. Building a community rooted in transparent, open access and utility, paired with continuous progress updates, fuels a surge of productive energy. Aerodrome’s Flight School program embodies this commitment. In contrast, opaque operations that limit benefits to a select few can create friction, especially in bearish markets, where these practices often erode community trust.

However, there’s a meritocratic path to forming values-driven subcommunities—open to anyone willing to earn their place. Nearly every project has a subgroup delivering authentic value, whether through capital, product feedback, governance, or shaping the narrative. Some groups are formal and visible, while others operate quietly, with a few key contributors informally stepping into these roles.

Examples include Aladdin’s Community Boosters, Yearn’s Secret Admirers, Synthetix’s Representative Councils, Club Gearbox DAO, and Aerodrome’s Pilots, Partners, and Sky Marshals. These subgroups foster a deeper sense of belonging, with their culture radiating outward to the broader community. To ensure a container of the most dedicated missionaries, several of these subgroups are unadvertised and seek a demonstrated commitment to the project’s values before offering an invitation.

Simply releasing a product into the world and hoping it works is a pipe dream. Early success requires carefully guiding and supporting the first wave of users to bootstrap momentum. A good builder experience is vital, and fast high-quality responses in the community serve as a growth force-multiplier. For early contributors, recognizing and spotlighting their efforts is one of the most valuable currencies for growing network effects. 

Community isn’t a monolith but it does tend to cluster—it may be present on GitHub, Discord, governance forums, BD partner Telegram groups, Twitter/𝕏, Farcaster, YouTube or Reddit. While tailoring engagement to each platform is essential, limited resources make it equally important to prioritize focus and cut what's unnecessary. You can’t do everything. Better to win in one or a couple of places than to be mediocre in five.  

Farm System for Talent 

Assembling the right team is one of the toughest challenges in scaling any project. Time and again, in my conversations with protocols, I’ve noticed a recurring pattern: talent in business, operations, data, and marketing isn’t just recruited from within the community—they’re often already contributing long before being hired. This method is effective because it secures true missionaries. These individuals are deeply aligned with the mission and can make an impact from day one. @amplice_eth emphasized, “the people we want to recruit already believe in the product’s importance and differentiation. These are the individuals we actively seek.”

@wagmiAlexander, who started his crypto journey as a volunteer in the Solidly community and previously worked in politics, shared a key insight: “In politics, those who secure full-time roles are the ones who show up early, deliver results, and persevere. It’s less about resumes and titles, and more about what you contribute.”

If you don’t see skilled candidates in your talent pool, it may be a sign you’re not cultivating the right kind of community. As @kmets_ put it, “community is the farm system for talent.”

Hiring from within the community also mitigates risks like bringing on bad-guy exploiters. In a remote work environment like DeFi, warm referrals become invaluable. 

However, sourcing engineering talent for DeFi protocols presents unique challenges. While it’s important to hire people who can hit the ground running, it’s equally important to design products for new users, not just the power users already entrenched in the space. In smaller DeFi communities, the talent pool for software engineers may be limited. In those cases, stepping outside the community and using traditional web2 recruiting methods becomes necessary. 

A saving grace emerges as ecosystem TVL grows and the stakeholders better align community engagement with recruitment efforts, and network effects compound. This is particularly noticeable in the largest DeFi protocols as well as L2s and alt-L1s. Grant programs also offer valuable opportunities to identify, test, and nurture new talent, just in time for the greater challenges ahead—a trend we’ll explore in a future post.

Community is a helpful force in talent acquisition. Whether it directly supplies skilled candidates or serves as a beacon of social proof, it generates the spark that draws the right people into your project’s orbit.

IRL Events: Make it Count

Depending on who you ask, hosting events is either about building a brand, attracting users, or sometimes just growing consensus - and all can be correct. Conferences like ETH Denver and Token2049 offer mainstage talks and hackathons as well as host hundreds of side events, creating opportunities for protocols to engage with their communities in personal and meaningful ways. Some protocols also hold regional meetups throughout the year in cities like Berlin, Buenos Aires, or Lagos. For project leads, the key question becomes: where should you invest your time and resources?

From speaking with various protocol leaders, the ROI on these events can be hit or miss. Some opt out entirely, finding little value in what could be replaced by YouTube videos. Others, however, have learned to embrace the unique aspects of the location and culture, transforming the experience into something fun, memorable, and deeply aligned with their project’s values.

For example, the Shielding Summit privacy event at EthCC Brussels, took place on a secluded island where participants explored privacy funding, policy, and technology. Some attendees embraced the event's core theme of anonymity by donning masks, a fitting symbol for the discussions. Or the Celestia Game Night at Devconnect Istanbul where attendees dropped into accidental collisions playing Smash Bros. sparking authentic conversations—far more engaging than the usual “where do you work?” exchanges. There was even networking in the Turkish hammams, where the cultural immersion made the experience irreplicable anywhere else.

Though the Reserve ecosystem isn't a focus in this post, I should flag two standout events that emphasized consensus-building. ReGov at ETH Denver brought together veTokenomics enthusiasts for hands-on collaboration to distill signal from noise and enhance governance design. Meanwhile, Monetarium—a three-day gathering in San Francisco for stability nerds—advanced long-term sustainability within the Reserve ecosystem and explored alternative forms of money to combat global inflation. Both events seamlessly integrated subject matter, attendees, values, and location, creating an irreplicable, offline experience. The work accomplished in just a few days holds billion-dollar implications.

Striking the right balance is tricky. Loud clubs and sprawling venues can dilute the opportunity for meaningful dialogue. Smaller dinners or impromptu meetups often create more intimate and impactful discussions. Co-hosting events with partner projects can also encourage the cross-pollination of ideas, while sharing the logistical and financial load. Aligning events with your business development goals—especially around product launches—can amplify their impact. Timing these gatherings to coincide with feature releases could help the event be more than just a party; it becomes a strategic extension of your growth efforts.

The most impactful events are often relaxed and intimate. Smaller settings encourage deeper conversations, particularly when you mix people from different disciplines—like engineers and artists. Hosting several narrow discussions rather than one large one can foster a more participative, creative atmosphere. And of course, curating the right attendees is critical—whether you're the organizer or participant, nothing dampens an event more than filling the room with people who don’t align with your 1-9-90.

Reaching International 

Many of the projects mentioned here have contributors and partners across multiple continents. However, their global reach has largely been driven by a differentiated product and English-language communication. While some have experimented with multi-language efforts, the outcomes were often distracting or underwhelming. Given limited resources, focusing on English remains the most effective strategy, as it reaches the majority of the DeFi community.

That said, if you're considering expanding into other languages, French, Spanish, Portuguese, and Chinese are the most commonly cited areas of interest. Some projects noted that even occasional tweets in local languages can spark recognition and excitement within those communities. Naturally, if your go-to-market strategy depends on a specific region, tailoring communications to that audience becomes an imperative.

Last Words

Throughout this post, I’ve shared insights from veteran builders of $70 to $700 million TVL protocols that have stood the test of DeFi time. What works for them might not work for you, but if you're willing to experiment, the 1-9-90 framework offers a useful guide for setting accountable priorities in community building.

It reminds us that a few high-caliber contributors often outweigh the noise of thousands of followers or critics. These dedicated individuals, aligned by shared intrinsic values (ideally onchain), may require more investment upfront, but their contributions have  longer lasting impacts.

Engage the community directly and personally—20 well-placed DMs often yield faster results than a tweet to 20,000 followers. While this approach doesn’t scale, it’s indispensable in the early days of fostering a vibrant, healthy community.

A strong community also doubles as a rich recruiting ground, especially for non engineering talent. If your project isn’t attracting talent from within, it might be time to rethink how you're integrating community and recruitment efforts.

While TVL is the lighthouse metric, the quality and quantity of protocol integrations can offer a more useful leading indicator of what's to come.

Core contributors who publicly and substantively share product features and benefits are one of the most powerful levers for generating inbound interest and fortifying loyalty.

When it comes to community platforms, you don’t need to be everywhere—less is more. Focus on cultivating your 1s and 9s in their preferred habitat, and new opportunities and the broader community will follow. The right individuals, deeply invested, will create an organic ripple effect that grows the ecosystem.

Governance participation, too, will largely follow TVL. Secure the users, grow the TVL, and the governors will follow.

Event strategies should align with your goals, whether that’s building brand recognition, attracting dedicated users or galvanizing consensus. Create experiences that are memorable and can’t be replicated by a YouTube video.

When you strip away the noise, it’s humans all the way down.

I'd love to hear your thoughts on this post, feel free to connect with me on 𝕏.