Points, membership points, miles, etc. have been our marketing tools for many years in Web2, and in the era of Web3 we are beginning to see the marketing tool shift from tokens back to points. Today's Token incentives and points of the Web3 project continue to evolve, colliding with blockchain technology to create new sparks. In this article, let us discuss the Web3 loyalty program and see how new technologies such as NFT, Defi, and DAO integrate this traditional marketing tool.
In the Web2 era, user participation does not equal ownership, and consumers cannot share the dividends of company growth. Users browse news on Facebook and shop on Amazon, contributing a lot of data and time, but it is difficult to obtain equity in the platform. Finally, the last straw will be handed over to retail investors through IPO, which will isolate retail investors and users from this capital game. This leads to a serious imbalance of interests.
The emergence of Web3, starting from Bitcoin, created a new incentive model for cryptocurrency: users can obtain the native tokens of the project by participating through mining, transactions, etc., and become real stakeholders. Furthermore, ICOs are very popular, and users can directly invest in early-stage projects, bypassing the layers of VC controls. Airdrops are a further step towards promoting inclusive finance. As long as users make contributions, they will have the opportunity to obtain project tokens for free.
Liquidity mining is prevalent in the DeFi era, and users can earn project tokens by providing liquidity, participating in governance, and other methods. This realizes "participation is mining", and users and the project form a close community of interests.
However, liquidity mining also exposes some problems: the issuance of tokens is too fast, leading to inflation; many users seek temporary benefits and quickly sell their tokens after pledging them; the project team lacks long-term means to motivate users. At this time, developers began to explore more sustainable incentive solutions, and Points came into being.
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What are the advantages of the points mechanism?
The points mechanism absorbs the essence of traditional points and Web3 token incentives. It issues points through users' contributions in dApp, such as transactions, social networking, games and other behaviors. Points can be used to exchange for digital assets such as NFT, participate in project governance, or be converted into tokens at a certain ratio in the future. However, unlike liquidity mining, points usually cannot be traded directly, and the rules and time for conversion into tokens are controlled by the project party. This avoids excessive inflation and prevents users from short-term speculation.
On the other hand, points combined with the latest blockchain technology bring revolutionary changes to the user experience. For example, Token Bound Account binds user identity, points, and NFT together to achieve seamless point management and use; Evolving NFT can dynamically update the attributes of NFT based on the user's contribution, stimulating the desire to collect; pledging NFT can also It can provide users with unique rights and interests, such as participating in project governance, obtaining bonus points, etc. These innovative applications make points no longer just numbers, but closely linked to identity, social interaction, and entertainment.
In addition, Sponsored Transaction technology allows users to waive handling fees and lower the threshold for use; Account Abstraction enables social media login, eliminating the need for users to manage private keys. These technological innovations allow more users to easily participate in the Web3 points economy.
How will the points mechanism evolve in the future?
How will points evolve in the future? I believe that as the Web3 ecosystem continues to mature, more imaginative incentive models will emerge. On the one hand, with the development of cross-chain technology, points are expected to break ecological barriers, achieve full-chain circulation, and create greater value space. For example, one of the winning topics at this year’s ETH Denver was the use of ERC-6551 for airdrops. On the buying and selling of points. On the other hand, with the rise of DAO, points may be deeply bound to mechanisms such as community governance and income distribution, allowing users' contributions to be directly transformed into voice and income rights.
Using points, the project does not need to conduct such a large-scale pre-sale token sale. Using points, retail investors can "invest" earlier and hopefully get cheaper prices than waiting until after TGE.
However, because the time of the airdrop and the ratio of points to tokens are not clear, this tool is more beneficial to the project side than previous airdrops. The points plan will only work when there is a high degree of trust between users and project founders. efficient. The community must trust that after interacting with the protocol, their points will be converted into tokens within a reasonable time frame and at a reasonable price. As points programs proliferate, there will be bad actors who abuse this trust. Ultimately, serious breaches of trust involving large amounts of money could lead to the failure of points as a fundraising and user engagement tool.
Even so, overall the rules of the Web3 game are moving in a healthier direction. By leveraging the innovative potential of blockchain technology, brands can establish a transparent, fair, and credible points economy, allowing every user to share in value growth.