Vampire Attacks Are Dead: Introducing “Incentive Hijacking”

• Vampire attacks have been widely used as an early growth strategy for protocols, but cases like SushiSwap, Blur, X2Y2, and LooksRare show that excessive initial incentives, reward-driven users, and weak brand moats often led to long-term adverse effects.
  

• In contrast to vampire attacks, incentive hijacking forms a symbiotic relationship by guiding specific user behaviors within existing platforms through incentive systems. This approach offers advantages such as sustainable incentives, organic user activity, and brand leverage, which enabled Kaito to grow rapidly by following this playbook.
  

• Nevertheless, for projects to successfully execute incentive hijacking, they must be wary of the Cobra Effect, where misaligned incentives backfire, and also acknowledge that they are not entirely free from the risks of vampire attacks.

1. Vampire Attacks Are Dead

If there’s a crypto playbook that every aspiring project must read, the “Vampire Attack” would show up around Chapter 2. The term was coined in August 2020 when SushiSwap launched a ruthless liquidity migration strategy targeting Uniswap, much like a vampire draining blood from its host.

In the world of AMM-based DEXs, the moat is liquidity. So how did SushiSwap try to drain Uniswap’s moat? By forking Uniswap’s open-source code and launching its own platform, SushiSwap incentivized Uniswap LPs to migrate their LP tokens by offering SUSHI token rewards in return.

Uniswap TVL | Source: DefiLlama

At the time, Uniswap didn’t have its own token, allowing SushiSwap to siphon liquidity with surprising ease. In less than two weeks, $830 million in liquidity flowed from Uniswap to SushiSwap. In a defensive move, Uniswap rushed to launch its UNI governance token on September 17, 2020.

SushiSwap TVL | Source: DefiLlama

Initially, the vampire attack worked. SushiSwap soared to a peak TVL of $8 billion—nearly catching up to Uniswap’s $10 billion. But in the long run? Uniswap now maintains around $5 billion in TVL, while SushiSwap has dwindled to just $120 million. The gap in trading volume is even more dramatic, as shown below.

Source: Dune (@Dune)

This isn’t unique to Uniswap and SushiSwap. In the NFT marketplace category, platforms like Blur, X2Y2, and LooksRare all launched vampire attacks against OpenSea. Though they gained traction temporarily, OpenSea eventually reclaimed the top spot in trading volume, casting further doubt on the long-term effectiveness of vampire attacks.

Source: Dune (@sealaunch)

Across DeFi, NFT marketplaces, and even social platforms, one pattern has become clear. Two key takeaways stand out:

1. As a short-term growth tactic, vampire attacks are extremely effective.

2. But projects born from vampire attacks struggle to sustain themselves over time.

One might argue, “Why not grow fast via a vampire attack, then retain users through strong product offerings?” It sounds reasonable, but history tells a different story. Here’s why:

• Excessive early incentives: Vampire attacks require disproportionately high incentives upfront, which hampers long-term sustainability.

• Mercenary users: The users attracted by vampire incentives are often short-term opportunists. They’ll abandon ship the moment another project offers better rewards.

• Weak brand moat: New projects lack the trust and brand recognition that incumbents have spent years building.

• Countermeasures by incumbents: Platforms like Uniswap and OpenSea don’t sit idly by—they fight back with their own liquidity, token launches, and ecosystem growth strategies.

The conclusion is clear:

The age of the vampire attack is over.

2. Introducing “Incentive Hijacking”

If you asked anyone in crypto to list the ten most talked-about projects right now, Kaito would almost certainly make the cut. Leveraging AI algorithms to analyze crypto discourse on X.com, Kaito has built a powerful dashboard for Web3 teams looking to optimize their marketing strategies. In doing so, it has carved out a new category known as InfoFi.

But while pioneering the InfoFi category is impressive, Kaito’s real masterstroke lies in its growth strategy—something I call incentive hijacking.

Kaito aimed to leverage the massive user base of X. While this isn’t a new idea—projects like Farcaster and FriendTech have also attempted to tap into X’s network effect—most of those efforts fizzled out after a short-lived hype cycle. Their mistake? Competing directly with X by trying to migrate its users onto new platforms, often through vampire attacks.

Incentive hijacking, however, is fundamentally different. Unlike a vampire attack which attempts to extract users from an existing platform, a hijack strategy offers additional incentives for users to stay on the platform, but change how they behave.

Let’s look at Kaito. Unlike Farcaster or FriendTech, which built entirely new social platforms to lure X users away, Kaito doesn’t compete with X at all. Instead, Kaito introduced an incentive system called Yaps, which rewards users for creating content about specific Web3 projects on X itself. This allowed Kaito to effectively ride X’s massive network effect while remaining symbiotic rather than adversarial.

In my view, incentive hijacking is a superior growth strategy to vampire attacks for several key reasons:

• Sustainable Incentives: Because hijacking doesn’t involve direct competition, there’s less pressure to offer outsized rewards during the early growth phase.

• Organic User Participation: While vampire attacks often attract mercenary users chasing rewards, incentive hijacking appeals to both opportunistic and organic users because they don’t need to leave their platform of choice.

• Leverage Brand Equity: Instead of competing against a well-established brand, hijacking strategies allow new projects to build on top of existing brand trust and visibility.

The concept of incentive hijacking isn’t entirely new. It’s been quietly used in several cases before:

• Validator Delegation Airdrops: In the Cosmos ecosystem, some Web3 projects encouraged users to delegate to their validator nodes by promising future airdrops of governance tokens—rewarding users without asking them to leave the network.

• Ethena Protocol: Ethena collaborates with various DeFi platforms—lending protocols, vaults, DEXs, rollups—and rewards users who use USDe within those platforms with Ethena Points. Rather than compete, Ethena coexists with DeFi protocols, weaving itself into the broader ecosystem.

Incentive hijacking isn’t just a clever growth tactic. It’s a blueprint for symbiosis in the fragmented world of Web3. Where vampire attacks seek to dominate, incentive hijacking seeks to align.

3. Incentive Hijacking ×2

Kaito’s brilliance doesn’t stop at hijacking incentives from one direction. In fact, it goes a step further. When Kaito rewards users who create content about Web3 projects, it doesn’t just use its own native token (KAITO). It also sources incentives externally from the very projects being promoted, such as governance tokens or marketing budgets. This unlocks what may be the ultimate model for sustainable incentivization.

Because Kaito is not only hijacking attention from a host platform like X, but also hijacking incentives from the participating projects themselves, I call this strategy Incentive Hijacking ×2.

Let’s consider a scenario where Kaito only offered its own incentives to users. That alone would make it more sustainable than vampire attacks, which rely on unsustainable, short-term rewards. But even then, over time, the value of token emissions would likely dwindle, weakening Kaito’s ability to guide user behavior on-platform.

Instead, Kaito rewards its content creators (aka yappers) not only with KAITO tokens but also with governance tokens and marketing rewards provided by the projects being promoted. This means users generate content about those projects, hosted on X, and receive dual rewards from both Kaito and the projects themselves.

In this way, Kaito becomes a powerful intermediary between X and Web3 projects: leveraging X’s network effect while also tapping directly into the incentive structures of its partner protocols. Incentive Hijacking ×2 enables fast growth in the early stages through X, and long-term sustainability by decentralizing the burden of reward distribution across multiple onboarded projects.

4. Considerations for Successful Incentive Hijacking

4.1 Beware the Cobra Effect

Source: The Good Boss

In colonial Delhi during the 19th century, the British government introduced a bounty for killing cobras to reduce their threat. At first, the plan worked—until locals began breeding cobras just to claim the bounty. This unintended consequence became known as the Cobra Effect.

This same dynamic can undermine even the most sophisticated incentive hijacking strategy. Consider the phenomenon of mercenary gamers in free-to-play games: while a game aims to deliver enjoyment and monetize via in-game purchases, some users play primarily to farm valuable items and extract value by selling them to others. When this behavior becomes widespread, it distorts the game economy and drives away genuine players.

Source: Kaito, 2025-05-30 10:30 AM KST

We’re witnessing a similar issue in Kaito’s own ecosystem. While its original intent was to reward high-quality content that enriches the crypto information landscape, the abundance of incentives has drawn in opportunistic users who flood X with low-quality posts just to farm rewards. This surge in irrelevant content has ironically fatigued the organic users Kaito originally sought to empower. A recent example is the LOUD incident, detailed in “Loud! is a Kaito Testnet”.

To prevent such abuse, any incentive hijacking model must include carefully engineered, abuse-resistant mechanisms that balance incentives with long-term health.

4.2 No Project Is Immune to Vampire Attacks

While incentive hijacking is a powerful tool for growth, even successful hijackers are not immune to vampire attacks themselves. Wallchain and Cookie.fun—two projects that have directly benchmarked Kaito—are already experimenting with similar models.

Though neither has matched Kaito’s scale yet, if Kaito’s ecosystem becomes distorted by Cobra-like abuse, these new challengers could capitalize on the opportunity and siphon off users through more refined tactics. This highlights a core truth: no project, however innovative, is invulnerable. Strong moats must always be built—not just in user growth but in user retention and loyalty.

5. The Bene Gesserit Playbook

Source: Dune

In the Dune universe, the Bene Gesserit are a secretive and powerful sisterhood who manipulate politics, religion, and genetics to shape the course of humanity. One of their strategies, Missionaria Protectiva, involves seeding myths and legends on primitive worlds—tools they later use to influence or control local populations.

Incentive hijacking operates in much the same way. Through a well-designed incentive system, new projects infiltrate the user base of dominant platforms, subtly altering behavior to achieve their own goals. Kaito is attempting to play this very role inside the ecosystem of X.

Will it succeed in becoming Web3’s Bene Gesserit? Or will it fall victim to a proliferation of cobras it can no longer control?