TL;DR
Collecting points has become a dominant ‘game’ in crypto in the past half year. Collecting points is to airdrop hunters what collecting air miles is to frequent flyers: it keeps a tab on their activity. Airdrop hopefuls get a sense of how much they might collect when the drop drops. Let’s discuss some pros and cons of this approach.
Crypto is supposed to be an innovative industry but it apparently isn’t above lending some true-and-tried marketing tools from the traditional marketing world. Enter: points. Wait, loyalty points, air miles, coupons? You get the idea, points have been around forever in more traditional circles.
The obvious difference? While air miles will pay you in extra travel distance, crypto projects pay you in… coins. Your air miles won’t get tokenized, but your points – the fruits of your crypto labor – mostly will.
The Fruits of Your Crypto Labor Expressed in Points
But what ‘crypto labor’? Points – basically an off-chain accounting system for tracking user activity on a given protocol – track the various kinds of activity that users of test nets or newly launched protocols have displayed.
What are the most common tasks that people get rewarded for?
- Providing liquidity/ staking
- Bridging assets from one chain to another
- Trading assets (spot or perpetual)
So, points reward you for moving your crypto capital around on a new protocol that hasn’t a token or coin yet.
The below dashboard is from Solan-based real estate index trading exchange Parcl.
As you can see, the writer of this article has amassed more than 25.000 points. Like pinball machine points, points are easy to hand out. So, how much are they even worth? Well, it put me in roughly the 30th percentile on the leaderboard. And this leaderboard position indication is a good way to gauge if you are farming points to any meaningful degree.
My points have exclusively been collected based on Liquidity Providing (LP). The reason that the total number of points is higher than the LP points is the bonus percentage from another referral.
Talking about referrals, this is another way that many platforms let you collect points: by letting you perform social tasks such as following them on X, Discord, reposting tweets, refer friends.
History of Points Programs
Blur, the largest NFT marketplace by trading volume, is often cited as the first crypto project to successfully introduce a points system when it launched in October 2022. The BLUR airdrop was a huge success, which told airdrop farmers everything they needed to know: points imply an airdrop.
Following Blur,friend.techdoubled down on the points playbook, linking points explicitly to airdrops: points were featured in the airdrops section of the app.
It was the Jito airdrop of December 2023 that made the points rage reach new heights. Thousands of dollars worth of JTO were dropped per user, again based on a points metric that was rooted in the amount of activity users deployed. It made everyone take notice.
Since then, point systems have been introduced or announced by many new protocols. To name a few top ecosystems/apps:
- EigenLayer ecosystem: the Ethereum restaking protocol Eigenlayer adds points in a fine-grained way: per hour per staked amount of Ether. Many apps that allow you to restake your Ether on Eigenlayer, such as…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
