استكشاف اقتصاديات النقاط: كيفية تصميم برنامج نقاط فعال؟

المؤلف الأصلي: kenton.eth

الترجمة الأصلية: Ismay, BlockBeats

Editors note: Points programs have become an important tool for projects to gain user loyalty and promote product growth. The author of this article, Kenton, founder of Sense Finance and former MakerDAO integration engineer, discusses in detail the design and implementation of points programs and their advantages and disadvantages in practical applications. From the successful experience of projects such as Ethena, Napier and Blur, we can see that a reasonable points strategy can not only effectively improve the projects KPI, but also gain an advantage in market competition. However, points programs also face problems such as lack of transparency and user fatigue, and are in urgent need of further innovation and optimization.

A new era of digital loyalty is dawning on Web3, driven by innovative points systems. Since Blur launched its groundbreaking points program in 2022, teams have rushed to adopt this new incentive primitive and take advantage of it. With each new points program launched, projects continue to advance the field of incentive design, discovering new reward mechanisms and incentivized behaviors. By 2024, a diverse ecosystem of points programs has flourished, with each project adding a unique color to the evolving points metaverse. This rapid evolution has created a rich variety of reward mechanisms and targeted behaviors, providing unprecedented opportunities for user activation and retention. However, for new builders, exploring the complexity of points economics can be daunting. This is about to change.

Drawing on conversations with points issuers and an analysis of more than 20 points programs, this guide reveals the benefits, criticisms, and practical applications of points economics for both new and existing points issuers.

The first part provides an introduction to points, while the second part provides a comprehensive overview of point economics in Web3.

Ready to upgrade your incentive program? Let’s dig deeper.

Part 1: Introduction to Points

What are points?

Essentially, a point is a digital reward unit whose value is reflected in its utility or convertibility into a tangible benefit — whether it’s exclusive access, product discounts, or direct monetary value. Projects strategically deploy point programs not only to foster loyalty, but also to drive product adoption, amplify network effects, and shape user behavior by accelerating product growth.

Why are points important?

Points programs create a mutually beneficial relationship between brands and users. Companies gain loyalty, growth, and data, while users are rewarded for repeat usage. Well-designed points programs help drive long-term engagement and deepen emotional connections, both of which are critical to product defensibility.

Generally speaking, both Web2 and Web3 companies/projects can benefit from the points program in the following ways:

Marketing – When combined with a referral program, points can expand your marketing channels.

Growth – Because points provide value, they reduce the effective price of your product/service, allowing points programs to increase conversion rates within your marketing funnel, driving growth in core KPIs such as the number of active users.

Stickiness/Loyalty – Points programs can increase product stickiness, which increases the lifetime value (LTV) of users and reduces churn. Studies show that loyal members spend 27% more on average, so product stickiness is achieved when the average LTV exceeds the cost of a loyal member.

Market entry timing – Dynamic points programs can help products with network effects, such as social media platforms and financial markets, get off the ground. By rewarding early adopters, companies can improve the product’s user experience (UX) until critical mass is achieved.

Users can also find value in the points program in the following ways:

Incentive Value – This value can come in the form of discounts, free products, exclusive access and benefits, and currency.

Brand Identification – Effective loyalty programs go beyond transactional rewards and make customers feel valued and emotionally connected to the brand. The pinnacle of loyalty is when customers develop a sense of psychological ownership of the brand.

Part II: The Protocol’s Integral Economics

Traditional Points Program

While points programs have existed in Web2 for decades, their adoption in Web3 introduces new dynamics and opportunities. In Web2, we are familiar with airline loyalty programs, such as Delta’s SkyMiles, and credit card rewards programs, such as Chase Ultimate Rewards. These programs have successfully driven customer retention and spending, and are worth billions of dollars each year—sometimes the revenue generated by loyalty programs even exceeds that of a company’s core business! However, Web3 takes the concept of points to new heights.

Web3 Points Revolution

The first project to introduce points in Web3 was Blur, which triggered a chain reaction in the cryptocurrency space in 2022. Many projects followed suit, and some of them reached impressive scale.

For example, Eigenlayer’s points program issues $1.8 billion worth of points per year, if its cost of capital is 10% annualized rate of return (APR) on its $1.8 billion total value locked (TVL). Other notable projects include Ethena, LRT programs (EtherFi, Swell, Kelp), and Blast.

Unique advantages of Web3 projects

In addition to the regular benefits, Web3 projects can also gain the following unique advantages from the points program:

Incentives at launch – Projects can launch points programs faster than tokens. This allows projects to provide user incentives immediately, driving growth from the start. Tokens, on the other hand, require careful design, allocation planning, and timing considerations, which may be difficult to prioritize during the launch of the protocol. Tokens are products in themselves and should not be launched hastily.

Token conversion potential – Points can be designed to be convertible into tokens in the future, which increases their implied monetary value. This allows teams to effectively borrow liquidity from future token generation events (TGEs) to fund current incentives.

Increased Flexibility – Points programs give teams the flexibility to adjust their TGE schedules, airdrop allocations, and incentive structures without hindering growth. This flexibility enables more effective go-to-market (GTM) strategies. Additionally, unlike governance-approved incentive programs, teams are free to adjust points programs. While token governance is the ideal end goal, in the early stages, a team’s flexibility can be a competitive advantage.

Market Timing – Token launches tend to perform better in bull markets. Points programs allow projects to build momentum and community during bear markets, setting them up for a successful token launch when market conditions improve.

It’s worth noting that these benefits aren’t limited to the pre-TGE situation. Projects like Ethena and EtherFi have also received similar benefits for their Season 2 points programs even after their token launch.

Points plan design

Points programs in Web3 have evolved to a variety of complex mechanisms, many of which are used in combination. The most effective programs include behavioral, basic, and boosted, and some are beginning to experiment with program rewards. Let’s take a deeper look at each of these.

Planned Behavior

Planned behaviors describe in detail user behaviors and actions to earn points, such as depositing on L2 or trading on a new AMM. They include:

Holding Unlocked Assets – Assets that users can freely deposit and withdraw (such as LRTs, Pendle YTs, Ethena sUSDe collateral deposits on Morpho)

Holding locked assets – assets that users need to wait a while before they can withdraw (such as locked Ethena USDe, local re-staking on Eigenlayer, Karak, and Symbiotic)

Providing liquidity – similar to unlocked assets, but with the risk of passively selling deposited assets (such as Thruster LP positions staked in Hyperlock)

Social interactions – likes, reposts, comments and follows

Planning Basics

The program fundamentals include the most important details of the points program, such as the points issuance schedule, timeline, and airdrop size. In most cases, the points program is divided into multiple seasons, each season is usually 3-6 months, and each season has unique basic terms.

1. Distribution schedule – how often points holders receive points, and how many points they receive

One-time reward

A one-time allocation of points for a specific action. Used to initiate actions and marketing. For example, Blur’s one-time reward for listing an NFT within 14 days, Lyra’s one-time reward for participating in Twitter/X-Space events, and Napier’s rewards for social interactions and referrals.

· Ongoing rewards

Fixed supply issuance – The total supply of credits is fixed for the entire program (such as Hyperliquid) or within a phase/season (such as Morpho*). While both reduce dilution for users, fixed program supply has the least uncertainty, while fixed phase supply allows teams to arrange issuance schedules more flexibly. Teams often use a fixed supply issuance basis to provide additional security for users.

Variable emission – (like Eigenlayer, all major LRTs, Ethena, etc.). Total supply is variable and is a function of TVL. Variable emission schedules dynamically dilute early depositors by accumulating a certain number of points per USD or ETH participated per day. While the expected airdrop payout (in USD) attracts new deposits, users who wish to eliminate dilution must increase participation in tandem with total deposits. Teams like this emission schedule because it removes the operational complexity of ensuring a fair distribution of points for all participants. To reduce dilution for the earliest users and increase urgency, teams release decreasing accumulation rate schedules (like 25 points per day in July, 20 points per day in August, etc.).

2. Time – the duration of issuing points

· Explicit vs. Ambiguous – Most projects give a fixed timeline/season length (e.g. 6 months), but some give a range (e.g. 3-6 months). Teams that want extra flexibility will choose ambiguous timelines, even though this may hinder growth.

Conditional – Some programs/seasons are designed to end early when key milestones are reached. If the expected season airdrop allocation is fixed, this can increase the sense of urgency to participate. For example, Ethena had a milestone of $1 billion TVL in season 1 — a goal that was exceeded in seven weeks.

* Although Morpho distributes non-transferable $MOPRHO tokens as incentives, it operates similarly to a points issuer.

Plan to improve

Program boosts are the primary lever for team adjustments, designed to reward users with a higher relative share of points through specific, targeted behaviors. Here is a list of the different boost mechanisms:

Improved quality of service – Projects can improve the quality of their product for one user group (e.g., traders) by incentivizing the quality of service of another user group (e.g., liquidity providers). For systems where users can differentiate on service, such as Uni v3 pools, projects can assign points based on their contribution to the products user experience (e.g., liquidity). Examples include Blur, which rewards LPs for quotes that are closer to the NFT reserve price, and Merkl, whose incentive mechanism favors Uni v3 LPs that make competitive quotes and earn more trading fees.

Referrals – Refer others and earn a portion of their points (e.g. 10%). This helps with marketing and incentivizing whale/high volume user acquisition. There is a risk of referrals being made through your own address. Some projects will ask for a referral code to access the app, generating additional marketing buzz, though conversion rates will drop with usage. Examples include Ethena and Blackbird.

Tiered Referral Boost – An extension of the simple referral system. Users can earn not only their referrers share of points (i.e. level 1), but also their referrers share of points (i.e. level 2). The goal is to encourage users to refer people who are expected to actively refer others. There is a risk of referrals being made through ones own address. Examples include Blur and Blast.

Base Boost – Projects can add an amplification boost to attract and nurture mass adopters. The basic idea is that your base point accumulation rate increases with base usage, thereby earning rewards faster for the same usage. Non-mass adopters will be underestimated and difficult to attract. For example, Aevo has a base volume boost for traders.

Market Launch Boosts – Projects will use launch boosts to attract liquidity and launch new markets before network effects kick in. Launch boosts typically have an expiration time, but other thresholds can be explored. For example, some LRT projects (such as EtherFi) use a two-week 2x launch boost every time a new Pendle market launches.

Loyalty Boost – Give extra points to users who pledge loyalty to a product (i.e. prove to use product A instead of B). This is particularly effective for products that rely on network effects; as competitors’ networks shrink, the product’s relative value proposition gets an extra boost. Blur used this boost to quickly attract market share from OpenSea after launch. This boost is more effective for NFTs, as their scarcity, especially when owners of a collectible typically only own one unit, forces them to choose loyalty; however, with fungible tokens, users can spread their balances across multiple addresses to avoid unnecessary pressure.

Random Reward Boosts – Taking inspiration from the Skinner Box experiment, some projects use uncertainty in reward size or timing to attract more participation and attention. Blurs gift package reward system uses loyalty points to determine the rarity *luck* of when to distribute gift packages. While users do not know the absolute reward size, they know the relative amount of each package. Similarly, Aevo uses a lucky transaction volume boost system, where any transaction of the user has the possibility of receiving a transaction volume boost, thereby increasing the reward of that transaction; both projects use a tiered boost system, where the highest boost has the lowest frequency (for example, 1% chance of receiving a 25x boost).

Leaderboard Boost – To encourage competition between users, the project instituted a leadership boost for the top 100 point earners. This concentrated point ownership among the top users, but could result in higher absolute KPIs as users competed to achieve higher rankings. Although not widely publicized, Blur used this boost in season 3.

Native Token Lockup Boosts – Projects with existing native tokens will offer boosts to point earners who demonstrate long-term belief. Because this may reduce circulating supply, teams should expect increased volatility in their tokens. Examples include Ethena’s $ENA and Safe’s $SAFE.

TVL boosts – Projects can incentivize user advocacy and marketing through boosts in points based on TVL growth. Examples include 3 Jane, whose AMPL-style points program rebases point ownership to TVL, and Overload, which promises increasing airdrop allocations upon reaching certain TVL milestones.

Group boost – Incentivize social pressure and coordination to gain group boost. AnimeChain is the first project to try this approach, using Squads as groups that share boost.

Lock-up boosts – In addition to a decay schedule that rewards past stickiness, some projects are beginning to experiment with boosts that reward future stickiness. Examples include EtherFi’s 1-2x boost to StakeRank in Season 2 and Hourglass’ 1-4x boost to liquidity lock-up for different maturities.

Program Rewards

Finally, planned rewards are other immediate benefits beyond the expectation of airdrops. The speculative nature of future airdrops drives most demand for points, but some projects are trying to provide additional utility to point holders, such as the ETH dividends that Rainbow Wallet provides to point holders.

While this component is small at the moment, I believe more teams will experiment with rewards for point holders, drawing inspiration from Web2 mechanisms such as product fee discounts, event access, and other benefits.

ضع كل شيء معا

The diversity of these building blocks allows for creativity in points program design. Once a team has determined its goals (user acquisition, product improvement, marketing, etc.), it can combine multiple building blocks in sequence or in parallel to achieve maximum effect. Here are some examples of creative use cases that go beyond the traditional deposit here points strategy to increase total locked value (TVL):

Ethena’s strategy is to issue points to USDe holders and increase returns for sUSDe holders.

Napier’s strategy is to incentivize asset holders for social interactions and other projects to increase partnerships and expand marketing reach.

Blur’s market entry strategy utilized various points mechanisms across multiple airdrops to quickly build supply and demand in the NFT market space and quickly gain market share upon public launch. Using random boost packs, their high-level strategy is as follows:

User Acquisition – إنزال جوي 0 rewards to private beta testers to attract the most active NFT traders.

Launch Supply – Airdrop 1 rewards new listings to existing NFT traders.

Build supply from loyal users – Airdrop 2 is larger than Airdrop 1, rewards more listings, and gives boosts to loyal listers who transfer liquidity from other NFT markets.

Stimulating Demand – Airdrop 3 rewards competitive bids to incentivize trading volume.

After a project designs its points program and go-to-market strategy, it will turn its attention to program implementation. Points accumulation calculations, data pipelines, price feeds, and points data storage are all components of the points program backend. Once the backend is complete, the project will focus on the consumer-facing implementation, typically a public dashboard that displays user points balances and points leaderboards. Many projects build their implementation from scratch, but some outsource the work to development shops and other infrastructure providers.

Next, when the project is ready for its Token Generation Event (TGE) and first airdrop, they will explore ways to distribute tokens to their points holders. While airdrop mechanics are not included in this post, teams should consider airdrop tokens vs. options, fixed vs. dynamic allocations, linear vs. non-linear distributions, vesting, lock-ups, Sybil prevention, and allocation implementation. Those interested in learning more can refer to this post for a quick overview.

Criticisms and shortcomings of the points program

Although points programs have proven their effectiveness, they are not without criticism. Points programs are completely centralized incentive mechanisms. Points accumulation calculations, data storage, program timelines, and criteria are usually opaque to users and are usually kept in off-chain databases. Therefore, point issuers must prioritize transparency as much as possible to build trust with their user base. If users cannot trust the terms of the points program, they will not value the points and rush to chase rewards.

While pre-TGE teams generally cannot disclose upcoming airdrops or allocations to points holders for legal reasons, they can invest in concise communication, timely disclosure of schedule adjustments, and rapid fixes when errors occur; EtherFi set a good example in handling calculation errors.

Other public criticisms, such as airdrop distributions that are not generous to points holders and are vulnerable to Sybil attacks, are unfairly blaming the points program when it is actually the airdrop programs fault. Points are simply a precise way of incentivizing and recording the share of points a user owns. The airdrop terms determine how, when, and what points holders are paid.

As we saw with Eigenlayer, users were not unhappy with their points balances. What they were unhappy about was the amount of airdrops their points converted to and the undisclosed claiming criteria. After 11 months of depositing, points holders only received 5% of the TGE and felt like they were being “farmed” and received returns far below the market average at the time. Additionally, many points holders were unexpectedly geo-blocked and unable to claim their share of $EIGEN. While the team has full discretion over token distribution, they could have easily avoided the latter issue by geo-blocking the product beforehand. The same was true with Blast — users were not unhappy with their points balances. Blast airdropped 7% to points holders and required the first 1,000 wallets to partially lock up their funds for 6 months. For a schedule of less than 6 months, this is pretty consistent with other airdrop seasons like Ethena, EtherFi, etc.

In short, the effectiveness of the points program has been proven, but there are also problems such as centralization and lack of transparency. Point issuers should attach importance to transparency construction and properly handle airdrop plans and legal compliance issues to maximize user trust and participation.

While not a criticism of program design, points fatigue is a growing problem in the ecosystem, as seen in public forums and private discussions with DeFi whales. Understanding the value of a point takes time and effort. For each new program, users need to build an initial model and continually update their assumptions to ensure they are getting the best return on their capital or actions. As new points programs flood the ecosystem, users struggle to keep up, leading to fatigue and slow migration between points programs. For example, let’s say you have two options: 1,000 units of points per day A vs. 2 million units of points per day B — which is more valuable? Is the more valuable one valuable enough to be worth risking capital on? The answer is not immediately obvious. Projects that cannot immediately differentiate their points programs from all others will have weaker points.

A final important and fairly insidious side effect of points systems is that they tend to mask product-market fit (PMF). Points are great launch mechanisms, but they have the potential to hide the organic interest that is critical to finding PMF. Even after validating PMF, teams need to build enough organic traction to find sustainability for the product/service before tightening incentives. Mason Nystrom of Variant calls this the “hot start problem.” For teams that haven’t validated PMF yet, I recommend introducing points after validating PMF in a closed beta program. For teams that have already validated PMF, the situation is a little more complicated, but Mason recommends that teams “take extra steps to ensure token rewards are used for organic usage and drive important metrics like engagement and retention.”

In summary, although the points program performs well in the launch phase, the team should pay attention to transparency issues, points fatigue, and product-market fit masking issues. Through timely communication, reasonable incentive mechanisms, and ensuring organic user participation, the team can maximize the effectiveness of the points program while avoiding potential negative effects.

نظرة مستقبلية

Looking ahead, I expect points programs will evolve to address the most pressing issues, such as program transparency and points fatigue.

To increase transparency of total points supply, allocation logic, and accumulation history, future points programs or parts of them will exist on-chain. Examples of on-chain points implementations include 3 Jane’s AMPLOL and Frax’s FXLT points. Another points software provider is Stack, which builds infrastructure to manage on-chain points programs.

Addressing points fatigue is a more complex challenge. While differentiating program designs is often discussed in private chats and on social media, the key to reducing fatigue may lie in enabling users to quickly and confidently assess the value of their points. This capability would significantly simplify comparisons between various points opportunities, making the decision to participate more straightforward and less overwhelming. While not part of the points program design, secondary markets such as Whales Market can help users price points and reduce fatigue, although their liquidity is not sufficient to support most points exit strategies. However, as these markets mature, they may become indispensable in price discovery, providing exit strategies, and creating a more dynamic points economy.

Overall, future points plans will focus on greater transparency and user-friendliness, addressing the main challenges currently faced through on-chain implementation and the development of secondary markets.

ختاماً

Points have become a powerful tool in the Web3 ecosystem, bringing benefits beyond traditional loyalty programs. They enable projects to reward loyal core users, initiate network effects, and fine-tune their market entry strategies in a more predictable way. This leads to more efficient product development and ultimately creates value for end users.

As this space matures, I expect to see further innovation in the design and implementation of points programs. The key to success will be balancing transparency and flexibility and aligning points programs closely with overall program goals and user needs.

For builders and projects in the Web3 space, understanding and leveraging the power of a well-designed points program can be a critical factor in achieving sustainable growth. As we move forward, points will likely continue to be a fundamental component of crypto incentive structures, continuing to shape the landscape of DeFi and beyond.

الرابط الأصلي

This article is sourced from the internet: Exploring the economics of points: How to design an effective points program?

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