Crypto hasn’t collapsed because the technology is flawed; it has stumbled because incentive structures pushed the industry to work against the people it was supposed to serve.
Since 2017 each crypto cycle has followed a familiar arc: excitement, inflows from retail investors, a velocity trap that rewards churn, catastrophic drawdowns and a long rebuilding of trust. Markets, macro forces and regulation matter, but the repeated outcomes are largely driven by how products and platforms are designed to steer behavior.
Psychology plays a role: people equate higher returns with higher necessary risk. A small token balance earning a few percent in staking doesn’t feel like progress, so users chase higher returns. The staking market has topped roughly $245 billion, yet many platforms only offer 2%–10% APY—insufficient to move modest balances. Meanwhile, derivatives and margin venues push high-leverage trading and record volumes, normalizing speculation.
“Just stake” is not enough. Native staking is relatively safe—the network issues rewards—but the surrounding ecosystem still incentivizes speculation: leverage offers, FOMO marketing and risky looping strategies. Retail investors need ways to participate that don’t expose them constantly to outsized risk or turn them into exit liquidity for faster, better-informed actors.
The practical solution is a crypto savings product designed with capital preservation as its core objective. A true savings layer would follow a few non-negotiable rules that nudge users toward good outcomes: preserve principal, be fully transparent, reward discipline over speed, and work the same for a $10 balance as for $100,000.
Real-world models already show this can succeed. The UK’s Premium Bonds protect capital while offering prize-based upside; prize-linked savings accounts in the U.S. encourage regular saving without promising high fixed yields. People will engage when they trust the design, understand it, and know their money is safe.
Mechanics must be simple enough to explain in one or two sentences. If users can’t plainly say where rewards come from, the design lacks transparency. Whether returns are sourced from clearly disclosed yield-generating activities or from a chance-based prize model, the system must be honest about trade-offs and limits. Incentives should reward consistency and discipline—not speed, early entry or trading volume—and they must function for the tiniest balances.
Equally important is what the product avoids: destructive default options that steer users toward loss. The goal should be to minimize downside, keep users net positive and encourage long-term engagement. A true savings layer keeps everyday users in the game rather than quietly pushing them out.
If the next cycle does not introduce mechanisms to protect everyday participants, crypto will replay the same arc of hype and painful collapse. The underlying technology need not change; what must change is what the technology is optimized for. Build products to reduce losses, not maximize turnover. The industry faces a clear choice: protect everyday users or keep optimizing for short-term gains. Only the former leads to lasting value.
Opinion by Ilya Tarutov, founder of Tramplin