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The Pitfalls and Strategies of Point Systems in Loyalty Programs
The hosts discuss how point systems can backfire and create disloyalty, and highlight the strategic use of points to increase user loyalty and engagement.
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 |
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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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