The points system hints at airdrops. Why do new projects like "PUA" users to earn points?

“Points system” has become an emerging incentive tool in the encryption field, and project developers are also using this tool to improve user retention and engagement.

Written by: Chloe, PANews

Rewards programs pioneered by NFT marketplaces Blur and Tensor are taking the DeFi space by storm. These DeFi protocols offer points to users who complete specific tasks, such as trading or locking tokens. The current market believes that this is a new way to attract and influence user behavior.

Even seemingly overnight, the “point system” has become an emerging incentive tool in the crypto field, and project developers are also using this tool to increase user retention and engagement.

There are already many projects whose performance can show that these points represent tokens that may generate real economic value in the future; in other cases, users have already developed confidence in the value of these points, and most people understand that the points indicate that Corresponding protocols may consider airdrops.

The points system becomes a tool for project parties to encourage user participation

Friend.tech started to gain popularity on the Base chain on August 11, but by the end of that month, the number of transactions had dropped significantly. It wasn’t until Friend.tech rose again in September that its trading volume surpassed Opensea. There were multiple reasons for the platform’s activity to increase again. One of the key factors was users’ expectations for the release of its tokens, because for users who actively participated, Each point they earn has the potential to be converted into a token airdrop worth $1-5.

Friend.tech officials stated at the time that a total of 100 million points would be distributed within 25 weeks, which led the market to believe that these points represented token airdrop opportunities and were closely related to the total investment amount, holding time and user activity in the application. Relevant, including actions such as clicks, time spent, and interactions.

Then came Blur’s founder’s new L2 project “Blast” on November 21, which attracted US$230 million in TVL in just 48 hours, making Blast the third largest ETH pledge holder in the market. According to the Blast Points chart released by Blast, the official airdrop will be conducted in May next year, and a corresponding points ranking has been set up. The number of points will directly affect the contribution of the airdrop.

For ordinary users, there are two main ways to obtain Blast points. One is very simple, just deposit assets into the Blast L2 network, and the other is to invite more users to participate in the Blast L2 network. In addition, Blast will also reward users based on the number of friends they successfully recommend. Riding on the expectation of this kind of airdrop is one of the main reasons for the increase in Blast users. It is also a strategy of eating two fishes for users.

Moving back a little further, on December 13th the crypto wallet Rainbow launched a points program designed to reward existing users and attract new users. Rainbow had previously captured a snapshot of Ethereum user activity, and at that time allocated at least 100 points to each Ethereum user as an incentive to explore the platform. In addition, Rainbow also targets Metamask users. As long as users have used Metamask services in the past year, they can also receive points rewards, and the reward amount depends on their transaction volume.

From Rainbow Wallet providing point rewards to users with ETH, to Friend.tech building its user engagement loop with points, to NFT platform Blur’s new L2 Blast, the application of point systems is becoming more and more widespread.

If users are not promised to issue tokens, can they avoid supervision?

This trend all shows that applications in the crypto space are seeking market fit more broadly and actively attracting user attention during the bear market. This change reflects that founders and developers not only continue to pursue project innovation, but also think about how to maintain the competitiveness of products and long-term user attention to their own platforms in a highly competitive environment.

It can be said that the popularity of the points system not only provides users with more incentives to participate, but also provides projects with a way to create an ecosystem and attract continued attention.

Specifically, the points system allows the protocol to implicitly let users know that an airdrop is about to take place, while guiding users to understand which activities will be most valuable and reward them. Allow project parties to deliberately guide user behavior. Kellan Grenier, co-founder of Parcl, believes, “Without a points program, it would be difficult to keep users paying attention to our products, let alone attract new users or new funds.”

What’s even more unique, however, is that these protocols may have just found a way to avoid regulatory issues by using points mechanisms.

In other words, in addition to packaging points into an attractive mechanism to attract users, the agreement does not have to promise users that they will issue any tokens. This is especially useful in countries like the United States where the legal status of tokens is still controversial.

Although this mechanism of deliberate project arrangement has brought many benefits to the overall agreement, it has also caused a lot of controversy. Some people believe that this approach is actually fundamentally predatory, taking advantage of users’ expectations for future airdrops of the project while avoiding corresponding responsibilities.