Sirwin
Sirwin
What Are Crypto Points?

Points: The New Engagement Model in Crypto

By Heath Muchena | Decentralised News | 26 Feb 2024


The crypto landscape is constantly evolving, and with it, new fundraising and user engagement strategies emerge. One such strategy gaining traction is the concept of “Points,” offering a unique twist on traditional ICOs and yield farming. While intriguing, it’s crucial to understand the nuances and potential pitfalls before diving in.

Breaking Down the Basics

Points, in essence, reward users for interacting with a crypto project’s protocol.These interactions can range from completing tasks to providing liquidity. Unlike traditional yield farming, points don’t directly translate into tokens. Instead, they act as a placeholder, with the conversion rate and airdrop timing remaining opaque and at the project’s discretion.

6f6bacac8cc213265c3dae4f8061e124368f823eef400cba5a2e96c35fafd6ec.png

Why Projects Flock to Points

For projects, points offer several advantages:

  • Bypassing Regulatory Hurdles: Points skirt the “security” label often associated with ICOs, potentially avoiding regulatory scrutiny.
  • Flexible Tokenomics: The opaque conversion rate allows projects to adjust token distribution dynamically, mitigating inflation risks.
  • Targeted User Acquisition: Points can be designed to incentivize specific actions, attracting users who contribute meaningfully to the ecosystem.
  • Reduced Reliance on VCs: Projects can acquire users without hefty upfront VC investments, potentially selling tokens at a premium through the points program.

06b234483c8e61d5e2475254421dbca6ea538d35f7bf30b6778bad18abc7b252.png

The User’s Perspective

While some benefits exist for users, caution is necessary:

  • Opaque Valuation: The lack of transparency around conversion rates makes it difficult to assess the true value of points.
  • Broken Trust, Broken System: Any misuse or abuse of the points system by projects could erode user trust and damage the entire concept.
  • Potential for Manipulation: Projects could incentivize actions that benefit them but not necessarily users, creating an imbalanced system.

Navigating the Points Landscape

As with any investment, approaching points with a healthy dose of skepticism is crucial. Here are some key points to consider:

  • Project Reputation: Thoroughly research the project’s team, track record, and community sentiment.
  • Transparency: Seek projects with clear communication and a commitment to user trust.
  • Value Alignment: Ensure the actions incentivized by points align with your own goals and the project’s long-term vision.

The Future of Points

Points represent an innovative approach to user engagement and fundraising, but they are still in their early stages. As the concept evolves, it’s crucial for both projects and users to prioritize transparency, responsible implementation, and long-term value creation. Only then can points truly unlock their potential as a sustainable and beneficial force in the crypto ecosystem.

Join the DeFi Mentorship Program: https://defi-decoded.online/

Get My Latest Book DeFi Millionaire FREE: https://defi-millionaire.com/

Follow Decentralised on Socials: https://linktr.ee/decentralisednews 

Protect yourself online w/ Private Internet Access: https://piavpn.com/DecentralisedNews  

Invest & trade crypto, sign up & claim $30,000 in Rewards: https://bit.ly/bybitbigbonus

Trade crypto, stocks or forex on gTrade: https://gains.trade/referred?by=decentralised

Trade crypto derivatives on a decentralised exchange: https://gmx.io/#/?ref=decentralised

FOLLOW on RUMBLE: https://rumble.com/register/decentralisednews/  

Keep Your Crypto Secure 🔒 

👉 CoolWallet Pro: https://www.cool wallet.io/product/coolwallet-pro/?ref=zjblodh 

👉 Argent: A Smart Wallet for All Things DeFi and Web3: https://argent.to/EvqgGBNq7cHKj31i8 

👉 Exodus: Non-Custodial Storage with 260+ Supported Cryptos: https://www.exodus.com/download?referral=true&referrerId=MPDHHZ  👉 Zengo: Keyless Security with Support for 70+ Crypto Assets: https://get.zengo.com/invite/?code=ZE...  

How do you rate this article?

23


Heath Muchena
Heath Muchena

Founder, Decentralised News & Proudly Associated Author, Journalist For more about me: https://linktr.ee/heathmuchena


Decentralised News
Decentralised News

For the latest in blockchain & digital assets visit https://decentralised.news/

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.