Definition ∞ A Viral Loop is a self-perpetuating mechanism within a product or service where existing users, through their actions, naturally recruit new users, leading to exponential growth. In Web3, this often involves incentives for sharing, community participation, or referral programs tied to tokenomics. It leverages user engagement to drive organic expansion.
Context ∞ The discussion surrounding viral loops in Web3 focuses on designing tokenomic structures and user experiences that genuinely encourage organic growth rather than purely speculative participation. A key debate involves preventing the exploitation of incentive mechanisms that could lead to unsustainable user acquisition. Future developments will likely involve more sophisticated game theory in protocol design to ensure that viral loops contribute to long-term network value and utility.
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