Opinion by: Ilya Tarutov, founder of Tramplin
The persistent cycles of boom and bust in cryptocurrency are often blamed on external factors like regulation or macroeconomic shifts. While these play a role, the core issue runs deeper. The industry’s recurring failures are less about flawed technology and more about the incentive structures we’ve built—structures that frequently work against the everyday users crypto was meant to empower.
The Pattern of Peril: How Incentives Shape Outcomes
Since 2017, market cycles have followed a dishearteningly predictable script: initial excitement fuels a surge of retail investment, followed by a dangerous velocity trap where leveraged speculation runs rampant. This inevitably leads to catastrophic drawdowns and a long, painful erosion of trust. Each cycle concludes not with sustainable growth, but with panic and despair, leaving a trail of burned participants.
It’s easy to point to market conditions or regulatory uncertainty. But the consistent outcome across cycles points to a common root: design. The systems we build actively encourage behaviors that maximize short-term volume and fees at the expense of user safety. The psychology is clear: “the higher the return desired, the greater the risk required.” This mindset is baked into the products.
Consider the disparity. While the staking market surpasses $245 billion, typical offers of 2%-10% APY yield meaningful returns only on larger balances. For someone holding a few thousand dollars, annual profits might be negligible—often less than $100. Meanwhile, derivatives platforms, offering sophisticated high-leverage trading, processed a reported $85.7 trillion in volume in 2025. This volume is a stark metric of where the industry’s lucrative activity and, by extension, its primary incentives lie.
Beyond “Just Stake”: Why Capital Preservation Must Be Central
Native staking—securing assets to support a blockchain network—is a relatively safe, network-driven activity. But it’s not a panacea. The platforms and products built around staking still overwhelmingly promote speculation, leverage, FOMO-driven trading, and risky “looping” strategies. The default environment pushes users toward being liquidity for more sophisticated players, not toward building wealth securely.
What retail investors fundamentally need is a way to participate that does not require constant risk exposure or force them to serve as exit liquidity. The solution is not another yield farm or leverage platform. It is a true savings product—one designed with capital preservation as its non-negotiable core.
Learning from Traditional “Prize-Linked” Savings
The concept isn’t as radical as it seems. Traditional finance already has models that prioritize security and steady participation over speculation. A prime example is the United Kingdom’s Premium Bonds, operated by NS&I. Instead of offering a fixed interest rate, they preserve the entire principal and distribute tax-free prizes through a monthly lottery.
The results are instructive. In 2025, NS&I paid out 71.7 million prizes totaling £4.95 billion ($6.6 billion). The program saw over 470,000 new accounts, with total eligible holdings growing to £134.6 billion. The appeal is transparent: your money is safe, you understand the chance-based mechanism, and there’s a tangible reason to participate and stay participated. Similar prize-linked savings products have gained traction in the United States for fostering consistent saving habits.
Designing a Crypto “Savings Layer”
A crypto-native savings layer must adopt these same principles. Its rules should be simple, transparent, and centered on protecting the user. Key tenets include:
- Capital Preservation as Default: The primary goal is to prevent loss of principal. Destructive risk must not be the standard option.
- Transparent Reward Mechanics: Whether rewards come from a transparent, low-risk yield source or a clearly defined chance-based prize pool, the system must be explainable in one or two sentences. If a user can’t simply explain where rewards come from, the design lacks clarity.
- Inclusivity of Scale: The product must be viable and rewarding for a $10 balance just as it is for a $100,000 balance. This aligns incentives with the majority of users.
- Rewarding Consistency: The system should favor long-term, disciplined participation over speed, early entry, or speculative gambles. The reward for staying should outweigh the reward for timing.
This is what a true savings layer means: a system engineered to help everyday users stay in the ecosystem, build habits, and preserve wealth—not one that quietly pushes them toward the exits after taking their liquidity.
Rewriting the System for the Next Cycle
If the next market cycle does not introduce products with these safeguards, history will repeat. Crypto will remain a story of grand promises followed by painful collapses for the average person. The change required is not in the underlying blockchain technology, but in what we choose to optimize that technology for.
We must shift from building products that maximize turnover and fees to those that minimize losses and encourage long-term health. This means prioritizing user outcomes over transaction volume. The industry faces a clear choice: continue optimizing for short-term gains at the expense of its user base, or commit to designing systems that protect and serve everyday people. Only one path leads to a sustainable, inclusive future.
Opinion by: Ilya Tarutov, founder of Tramplin.
This opinion article presents the author’s expert view, and it may not reflect the views of Cointelegraph.com. This content has undergone editorial review to ensure clarity and relevance. Cointelegraph remains committed to transparent reporting and upholding the highest standards of journalism. Readers are encouraged to conduct their own research before taking any actions related to the company.
