UNCHAINED: Crypto Points Systems Are a 100x Opportunity, But Founders, Be Wary
CoinDesk Podcast Network
Crypto News Recap: FTX's Bankruptcy Plan, Solana's Surge, and More
This chapter discusses the latest news in the crypto industry, including FTX's bankruptcy proceedings, Solana's stablecoin volume surge, Three Arrows Capital saga, and Galaxy Digital's assets under management.
Li Jin of Variant Fund dives into the trend of points in crypto: why projects favor points over tokens, the art of designing such systems, and the potential of on-chain points.
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Over the past year, the crypto industry has seen the rise of a new trend: the adoption of points systems.
Li Jin, cofounder of Variant Fund, says that while points systems have long been a staple in the Web2 domain, their integration into the crypto ecosystem could have pitfalls.
She covers how these points are currently being leveraged within crypto applications in the hopes of driving user engagement and retention, why they’re taking off now, and why they’re off-chain. She also points out that, if implemented poorly, they could engender disloyalty instead of leading to sustainable communities, and urges founders to be thoughtful about the design of these systems, especially about how points translate to economic value.
Show highlights |
- What points are in crypto and their role in rewarding user behavior
- Examples of popular projects that have successfully implemented points systems
- Why points mechanisms are gaining traction in crypto, offering benefits of tokens without the downsides
- Whether points, that are currently off-chain, will eventually move on-chain, and the implications for users and founders
- How points can incentivize inorganic behavior, drawing from Li Jin's experience in the Web2 sector
- The potential pitfalls of points systems and how they can sometimes create more disloyalty than loyalty
- Identifying which crypto projects are best suited for using points, and the importance of product-market fit
- Why keeping the economic value of points ambiguous can enhance user engagement and loyalty
- Whether points are being used by projects to navigate around regulatory challenges
- Future developments in points systems, including the potential of bringing points on-chain for a universal loyalty system
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Guest |
Li Jin, cofounder and General Partner at Variant Fund
Previous appearances on Unchained:
Will Every Piece of Media Enter the Internet as an NFT? Variant Fund Says Yes
The Chopping Block: Two on Two Debate: NFT Royalty Throwdown!
Links |
Points:
Li’s Newsletter: Lessons on Points Programs for Crypto Apps
Li’s comments on the topic:
Tweet 1 on points entering “the crypto app zeitgeist”
Tweet 2 on points discounting the cost of the product
Tweet 3 on points and product-market-fit
Tweet 4 on how points can “distort activity”
CoinDesk:
Crypto Points: Off-Chain Derivatives That Everyone is Talking About
Web3 Loyalty Programs Are a Trojan Horse for Good Crypto Policy
DL News: Why DeFi protocols love to offer ‘points’ before airdrops
Projects using points
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Unchained Podcast is Produced by Laura Shin Media, LLC. Distributed by CoinDesk. Senior Producer is Michele Musso and Executive Producer is Jared Schwartz.
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