Discuss the point reward model. In the Web3 project, the point reward model replaces the airdrop token reward. Is it good or bad?
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With the vigorous development of the Web3 field, various projects continue to seek innovative ways to motivate users. Recently, nearly 90% of Web3 projects have chosen to adopt a points reward model to replace the traditional token airdrop method. Whenever a user interacts with a related project, such as participating in community discussions, content creation or other forms of contribution, the project will distribute it to the user in the form of points. Compared with the past when projects distributed airdrop tokens early in the morning, there are many advantages and disadvantages to using the points reward mechanism. This article discusses the point reward model and whether the project side can continue to provide it to users in relevant ways.
Discuss previous airdrop reward models and the issues they caused
In the cryptocurrency space, airdrop rewards have always been a popular way to attract user participation and promote new projects. Project parties usually set a specific activity period, during which users will receive token rewards at the end of the activity after engaging in interactive activities. This approach can indeed effectively increase user participation and project visibility in the early stages.
However, over time, this model of relying on token rewards gradually showed its problems. On the one hand, it requires project parties to determine key decisions such as the supply, issuance speed and usage of tokens at the early stage of the project. In a rapidly changing market like cryptocurrency, it is difficult to maintain long-term adaptability and flexibility.
On the other hand, due to the extreme volatility of the market, token strategies set in advance may no longer be applicable due to changes in the market environment. This has resulted in the value of many projects shrinking significantly or even becoming worthless before their tokens are listed on mainstream trading platforms.
In addition, when a project relies on airdrops to attract users, once the airdrop ends, there is no mechanism to continuously incentivize users, and user participation may decline rapidly. This not only affects the healthy development of the community, but also poses challenges to the long-term survival of the project.
Although airdrop token rewards can quickly increase the user base and market attention in the initial stage, it also brings many challenges. In order to solve these problems, the project team has tried every means to find a new method — the points reward model.
Point reward model gradually replaces token reward: the rise of new trends in the Web3 field
As Web3 projects seek a more sustainable and flexible user incentive mechanism, the point reward model has gradually become a popular trend, gradually replacing the traditional token reward model. In this new model, users who participate in project activities receive points based on their level of interaction, which can then be redeemed for the project’s tokens based on specific conditions.
One of the major advantages of the points reward model is its unlimited issuance mechanism, which allows users to obtain corresponding points based on their participation, effectively encouraging users’ active participation and long-term loyalty. More importantly, the project team has sufficient flexibility to adjust the ratio of points to tokens before actually issuing tokens, which allows the project to better control the inflation rate and adjust strategies according to market conditions.
After adopting the points model, the project team can conduct in-depth analysis of user behavior data and optimize the reward mechanism and user experience based on these data. This data-driven approach not only helps improve the quality of user participation, but also increases the project’s adaptability to market dynamics.
At present, many well-known projects have adopted the point reward model, such as NFT trading platform Blur, Ethereum L2 project Blast, and EigenLayer’s Eigen Point. These projects use a points model to attract and maintain a user base, and enhance users’ cross-project interaction by providing a cross-platform reward mechanism. For example, users can pledge through the Ether.Fi platform to earn Ether.Fi, Renzo, and EigenLayer Points for other projects. Many projects are currently very keen on the point reward model and continue to apply it.
Points Reward Model: The Value of Innovative Blockchain Applications and Emerging Markets
With the promotion of the points reward model, it not only increases user participation in the Web3 project, but also promotes the development of a new trading market — the over-the-counter (OTC) platform. These platforms, such as Whales Market and Point Market, provide users with a place to trade project points, allowing investors who were not able to participate in the early stage but are optimistic about the project to also have the opportunity to purchase points.
On these OTC platforms, users can view the price trend and trading volume of points in real time, which not only makes the market more transparent, but also provides project parties with a new way to evaluate projects and user participation. For project parties, using this valuable data can help them better adjust their future token economic models and market strategies.
However, it is worth noting that as some projects such as EigenLayer and Renzo began to officially launch their own tokens, I observed that the market price of related points fluctuated sharply after the tokens were launched. I think it is easy for users to get FOMO at the market price of points, but when the points exchange rate announced by the project does not meet expectations, it may cause market panic, causing points and token prices to fall rapidly.
The points model airdrop rewards caused controversy, and users were dissatisfied.
Recently, as many cryptocurrency projects have announced that they will conduct token airdrops, major projects will also provide websites for users to check the token rewards they have received before distribution. However, when users reviewed the expected rewards, many users expressed dissatisfaction with the number of tokens received, which sparked widespread discussion in the community.
Recently, Machi Big Brother, a well-known crypto influencer, publicly expressed dissatisfaction with the reward distribution of the Blur platform, and even strongly criticized the platform and its founder Pacman on Twitter. Additionally, other projects such as EigenLayer have faced similar criticism after announcing their airdrops. Users generally reported that the tokens they received were far less than expected, and they believed that the project failed to treat all participants fairly, especially those users who provided liquidity. As a result, users were ultimately unable to obtain relative value tokens due to high mining costs. Sometimes the gain outweighs the gain.
These incidents highlight a key issue in the practical application of the point reward model: although this model can effectively control the issuance of tokens and solve some tokenization problems, the centralized control mechanism adopted by the project party may cause users to lose money after high-cost investment. , received disproportionate returns, causing widespread dissatisfaction.
Regarding the issue of the points reward model, Uniswap founder Hayden Adams also expressed his views, believing that projects should issue tokens with real value and verifiability, rather than points that may lack transparency, to ensure fairness and sustainability of the crypto economy. .
Although many projects currently adopt a point reward model and solve some incentive problems in the short term. However, in the long term, a lack of transparency and fairness can have a negative impact on user participation and the sustainability of the project. When users participate in the point reward model for a long time and the rewards each time are lower than their expectations, users will slowly quit and not participate in the long run, which I believe is not what the project parties want to see. Therefore, I believe that the need to find a reward mechanism that can both motivate users and maintain the credibility of the project will be an important issue that Web3 projects need to face in the future.
