🧞How to make points work for you? - Absinthe's experience

Points Meta

Sep 16, 2024

Gm and happy Monday frens🖖

Sike, no points for you!

Anyway, points appeared in Web3 like a bolt from the blue - it was an evolution of standard token airdropping for doing activities on-chain. Mainly to combat airdrop farmers (or sometimes just to not give out tokens).

Basically, you can increase the engagement and activity of your protocol by giving out non-tradable points.

What are the best tactics for using points and how can you use them to drive growth - today!

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💠 Modular & L2 Day (co-organized by TAC & Nubit)

If you're into modular design, modular blockchain stacks, and layer 2 scaling solutions.

Here are some great keynotes that you can catch:

Chain Abstraction and the Ripples in the Matrix by Mayur Relekar, Founder & CEO @ Arcana
Enabling 1 Billion Users to the EVM World by Pavel Altukhov, Founder & CEO @ TAC
How to Onboard the Next Million Consumer Apps by Prof. Yu Feng, Founder & CEO @ Nubit
The Missing Link in DeFi: On-Chain Data Utilization Empowered by ZK Coprocessors by Wanli Zhou, Head of Ecosystem @ Brevis
Rollups - the Final Frontier of Scaling by Bo Du, Technical Co-Founder @ Polymer Labs

📅 Sept 17th

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🔁 Restaking & Infra Day (co-organised by Nubit & Zeebu)

For liquid Restaking and staking, Oracles and other AVSs, and security and risks of Restaking fans.

We got 3 awesome panel discussion for you:

Restaking: The State of Play, Major Results, Downsides, and Future Prospects with speakers from Nubit, Picasso, Karak, Starkware, and Zeebu
The Future of LRTs and Their Impact on DeFi by Eigen, ether.fi, Exocore, Yala, and Renzo
Future-Proofing DeFi: AVS, Infrastructure, and Beyond with speakers from Eigen, Risk Layer, Affine, Bitcoin OS, and Mind Network

📅 Sept 18th

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🥮 BTC Scaling Day (co-organised by Nubit)

If you fancy wBTC and alternative interoperability solutions, BTCfi and Restaking on BTC, future developments and perspectives of BTC.

Can't spill the beans on all the speakers yet, but there going be someone from Nubit, GOAT Network, Merlin, Cycle, BOS & Mezo.

Expect lots of insightful networking in our specially designed area! You can really make some valuable connections there.

📅 Sept 19th

🤿 Deep-dive: Points Meta

Today we talk about what point systems really are, why do they start, and where do they come from!

From Ketan Jog, CEO @ Absinthe. Watch full presentation here.

How did points start?

Points systems originated as a way for platforms to incentivize interactions within their ecosystems. Initially used by large-scale networks like airlines and credit card companies, these systems allowed users to earn and spend value in a controlled environment, creating a closed-loop of engagement. For example, airline miles or credit card rewards created a pseudo-currency that could be used within these ecosystems or with their partners, driving repeated user engagement and loyalty. In Web3, points systems have evolved similarly, serving as incentive mechanisms that are more flexible and less constrained by regulation than traditional tokens.

These systems create in-app currencies that retain users within the ecosystem, offering a flexible and engaging way to boost platform loyalty and maintain user activity without requiring direct cash transactions. These models highlight the power of points to enhance user retention by creating internal economies that encourage spending and engagement.

Applications in Web3

In Web3, points systems are used to recognize, acquire, and retain users, offering founders significant flexibility compared to traditional tokens.

Unlike tokens, which are often subject to stringent regulatory frameworks, points systems allow projects to create tailored incentive structures that can be adjusted to meet the specific needs of the platform.

Points enable founders to direct user behavior in ways that align with the platform’s goals, such as driving engagement, facilitating user acquisition, or rewarding loyal participants. This flexibility makes points systems an attractive alternative for Web3 projects that seek to incentivize user actions without the complications of direct token issuance.

Specific Web3 use cases

Recognition: points are used by platforms like Galaxy and Layer 3 to provide on-chain recognition, often represented by specific badges or tokens that acknowledge user participation.

This recognition can drive user engagement by creating a sense of achievement and status within the community, often with the speculative promise of future value or rewards.

Acquisition: points systems are particularly effective in acquiring new users. Projects like Blast L2 and Linnea have utilized points to reward early adopters with benefits such as multipliers or exclusive access, effectively leveraging network effects to build user bases rapidly.

It allows platforms to attract and incentivize first movers, who then drive further growth through word-of-mouth and increased platform activity.

Retention: retention is a crucial application of points systems, as platforms strive to keep high-value users engaged. By offering points that provide special benefits or perks, platforms can retain users who might otherwise migrate to competitors.

This approach rewards ongoing participation and helps maintain a loyal user base.

Economic speculations

Points systems in Web3 add a layer of economic speculation that is not typically present in traditional points systems. Users can engage with points programs with the hope or expectation that these points will translate into future economic value, such as tokens or exclusive access.

Gamification plays a significant role here, with platforms incorporating leaderboards, badges, and instant feedback loops to keep users engaged and motivated. This speculative element adds an additional incentive for users to participate actively, as they chase both recognition and potential financial rewards.

Access to value

Points can act as proxies for access to accrued value without granting users direct ownership. This is particularly significant in Web3, where projects often need to balance rewarding users with maintaining control over platform governance.

Points allow platforms to distribute rewards based on user engagement without diluting ownership or control, offering access to benefits or fee reductions instead of direct equity. This approach provides a controlled method of rewarding users, aligning their interests with the platform’s success while avoiding some of the pitfalls associated with token-based ownership models.

Narrative-led growth

The use of narrative as a tool for user growth represents a fundamental shift in how Web3 projects build and sustain their user bases. Projects now focus on crafting compelling narratives that resonate with potential users, using points to draw in and retain their audience.

This approach allows platforms to strategically curate their communities, ensuring that new members align with the project’s long-term vision rather than just seeking short-term speculative gains.

By leveraging narrative alongside points systems, projects can foster a more dedicated and supportive user base, driving sustainable growth over the long term.