TLDR;
- Crypto points open up new ways of earning more crypto such as trident them on OTC platforms, being eligible for airdrops, etc.;
- Notum has implemented a Points tab to track all your points across various protocols;
- Such popular platforms as Kinza, Swell, Ethena, and EigenLayer have their points system giving more opportunities for earning crypto;
- Some prominent crypto projects such as Metamask are losing their users as they don’t keep up with the crypto points hot trend.
Intro
"Crypto points" is a new trend in web3 space that marks user behavior. Web3 projects may give out points to gamify their protocol, with governance or voting, deter airdrop farmers, and more. These points can give you allocations and drop tokens after TGE (Token Generation Event).
Often, crypto points are centralized; a specific web3 project is disseminating and tracking their point system rather than recording those points on a blockchain.
The matter is that crypto projects airdrop tokens to users who previously used their platform. This led to airdrop farming and speculators tried to create high levels of activity for projects that might do an airdrop — to get a more substantial share if it took place.
Points are a kind of evolution of this trend, and even more — the absence of the points system can be a factor in why people lose interest in the project. Thus, Metamask lost its market share because Rainbow and Rabby wallets have implemented the points feature.
What Are Crypto Points For?
Crypto points system can be implemented in various ways, depending on the project’s goals and use cases. These are the main ways cryptocurrency projects might use a points system:
- Inspiring more activity: Crypto projects may use a points system to incentivize behavior that is beneficial for the ecosystem. If a project is going to have an airdrop, it might reward users with points for showing appreciation to the devoted users.
Afterwards, those points could be exchanged for tokens or other rewards, so users can further participate in activities that support the project's goals; - Gamification: Sometimes projects implement gamification elements by introducing a points system to make interacting with the project more engaging. Users earn points when completing tasks, achieving milestones, or taking part in community challenges.
Points can be displayed on leaderboards or used to give away badges or other virtual rewards, bringing a sense of competition and community engagement; - Bridge to tokens: Points can also act as a step before users can get the project's native tokens. Users may earn points through different actions, and then convert or redeem these points for tokens at a predetermined exchange rate.
This can serve as a fairer distribution of tokens to incentivize early adoption and engagement before the full-ledged token ecosystem is launched.
Why Are Crypto Points Getting Popular?
The main reason here is that it’s a fairly new feature, and like everything new and fresh it draws lots of attention and sincere interest. It motivates user engagement, community participation, and adoption within their ecosystem.
- Taming airdrop farmers: Airdrops happen when a crypto project rewards early users by dropping tokens to loyal users. Airdrop is a practice of strategically participating in cryptocurrency airdrops to make the most of the received rewards.
It is often without engaging in the project any longer. Having crypto points through airdrops makes airdrop farmers stay within the ecosystem to make those crypto points beneficial. - Motivating engagement: Accruing points for interacting with decentralized applications, participating in governance, providing liquidity, or referring new users can encourage users to become active participants.
- Strengthen community: Points can build a lively and engaged community around the project. Users may want to earn points, leading to increased participation in community discussions, events, and initiatives. Such engagement can contribute to the project's growth and sustainability.
- Adoption: These points can bring new users to the project's ecosystem. Those interested in earning points may want to explore the project's earning opportunities. Thus, it can end up with the adoption of its services and applications.
- Enhancing governance: Crypto points can be connected to governance rights within the project. Users who have points may be granted voting privileges on governance proposals, giving them voting power in the project's future direction and development.
Crypto Points Vs Cryptocurrencies
Crypto points and cryptocurrencies aren’t the same. Points do not have a monetary value. A cryptocurrency like $ETH will have a price and market capitalization, but crypto points won't. However, you can trade your points on special OTC platforms such as Whales Pro. If you don’t want to wait until airdrop, you can easily trade your points.
Source: Whales Pro
Web3 projects must track the crypto points given out. As for cryptocurrencies, they are recorded on a blockchain. However, some projects started to record points on the blockchain. Linea, for example.
Web3 Projects Using Crypto Points
- Crypto wallet Rainbow gave out points for interacting with Ethereum, swapping assets using Rainbow, doing habitual on-chain activities, and referring a friend to the platform.
- A web3 social networking app, Friend.Tech, grants points to users to interact with the platform. These points might be converted into tokens once Friend.Tech developers will issue their tokens.
- The NFT marketplace Blur issues points to users who list and bid on items, as well as lend their assets. The amount of points a user has will determine what kind of so-called 'Care Package' reward they receive, including items of different rarities.
- A lending protocol Kinza has a point system to give users a preview into how much airdrop they can get following TGE.
Crypto Points on Notum
That’s an interesting idea that can help to add some novelty to the crypto space and incentivize new activities all over the protocols, but the paint point is evolving. There are so many point programs and it’s getting so difficult to track them in different that Notum decided to work that out.
Source: Notum app
Notum app is offering a solution — we’ve implemented a tracker for 7 protocols (Kinza, Swell, Ethena, Renzo, etc.) so far, but we are in the active development stage of adding new protocols. So, if you have a protocol to submit, don’t hesitate and contact us. We’ll add it ASAP.
Source: Notum app
Soon we’re going to add more guides and information on airdrops campaigns where you can get all the necessary information on current and upcoming events and won’t lose fruitful opportunities!
Crypto Points' Future
Web3 startups continue to think of new ways how to incorporate loyalty points programs. There is still room to grow in terms of clarification and transparency regarding crypto points' functionality and benefits.
All in all, while loyalty points programs represent an innovative approach to motivating user engagement in the crypto space, they also have challenges and opaque spots that must be fixed.
Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.