The points system implies Airdrop, why does the new project like "PUA" users to engage in points?

By Chloe, PANews

Rewards programs pioneered by Non-fungible Token marketplaces Blur and Tensor are taking the Decentralized Finance space by storm. These Decentralized Finance protocols offer points to users who complete specific tasks, such as trading or locking tokens. The market now sees this as a new way to engage and influence user behavior.

Even seemingly overnight, the “points system” has become an incentivized new tool in the crypto space that project developers are using to improve user retention and engagement.

There are already many projects that have shown that these points represent Tokens that may generate real economic value in the future; while in other cases, users have developed confidence in the value of these points, and most understand that the points indicate that the corresponding protocol may consider Airdrops.

The point system has become a tool for the project team to motivate users to participate

On August 11th Friend.tech had a big start on the Base chain, but by the end of the month, the number of transactions had dropped significantly. It wasn’t until September Friend.tech that it re-emerged, surpassing Opensea in terms of trading volume, and there were a number of reasons for the platform’s renewed activity, one of the key factors being the anticipation of its Token release, as every point earned by active users could be converted into $1-$5 worth of TokenAirdrop.

Friend.tech officials said at the time that a total of 100 million credits would be distributed over a period of 25 weeks, leading the market to believe that these credits represent TokenAirdrop opportunities, and are closely related to the total investment amount in the app, holding time, and user activity, including clicks, time spent and interactions.

Then on November 21, Blur founder’s new L2 project “Blast” attracted $230 million in TVL in just 48 hours, making Blast the third-largest ETH staking holder in the market. According to the Blast Points chart released by Blast, the official Airdrop will be carried out in May next year, and the corresponding points ranking will be set up, and the number of points will directly affect the contribution of the Airdrop.

For the average user, there are two main ways to earn 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 refer. The expectation of stepping on this Airdrop is completely one of the main reasons for the increase of Blast users, and it is also a strategy for users.

Bringing the clock a little closer, on December 13 crypto Wallet Rainbow launched a points program designed to reward existing users and attract new ones. Rainbow had previously captured a Snapshot of Ethereum user activity, allocating at least 100 points to each Ethereum user as an incentive to explore the platform. In addition, Rainbow is also targeting Metamask users, who can also get points for using the Metamask service in the past year, and the amount of rewards depends on their trading volume.

From Rainbow Wallet rewarding users with points on ETH, to Friend.tech building its user engagement loop with points, to the Non-fungible Token platform Blur’s new L2 Blast, the use of the points system is becoming more widespread.

Does not promise users to issue Tokens, can it avoid regulation?

This trend suggests that apps in the crypto space are seeking broader market fit and actively attracting users’ attention in a bear market. This shift reflects the fact that founders and developers are not only constantly pursuing project innovation, but also thinking about how to maintain the competitiveness of their products and the long-term interest of users in their platforms in a highly competitive environment.

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

Specifically, the points system allows the protocol to implicitly let users know about upcoming airdrops, while guiding users to recognize which activities will be most valuable and rewarded. So that the project team can deliberately guide user behavior. According to Kellan Grenier, co-founder of Parcl, "Without a loyalty program, it’s hard to keep users interested in our products, let alone attract new users or new money. ”

More specifically, however, these protocols may have found a way to circumvent regulatory issues using the points mechanism.

That is, in addition to packaging points as an attractive mechanism to attract users, the protocol does not have to promise that users will issue any Tokens, which is especially useful in countries like the United States, where the legal status of Tokens is still disputed.

Although this deliberate mechanism of the project has brought many benefits to the overall agreement, it has also caused a lot of controversy. Some argue that this is fundamentally predatory, taking advantage of users’ expectations for future Airdrops while avoiding liability.