Crypto Points Systems Are a 100x Opportunity, But Founders, Be Wary - Ep. 585

16 snips

Dec 22, 2023

Li Jin, cofounder of Variant Fund and expert in crypto points systems, sheds light on how these systems are transforming the crypto landscape. She explains their role in boosting user engagement, drawing parallels with traditional loyalty programs while warning of potential pitfalls like fostering disloyalty. Jin emphasizes the importance of thoughtful design and product-market fit to ensure these programs translate to economic value. Additionally, she discusses the future potential of moving points on-chain and its implications for both users and founders.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

Points in Crypto

Crypto projects use off-chain points to reward user behavior and engagement.
These points, often tied to programs, may eventually convert to on-chain tokens.

ANECDOTE

Points Examples

Web2 examples of point systems include Sephora, Dunkin' Donuts, and grocery stores.
Rainbow Wallet, Blackbird, and Blast are crypto projects implementing points.

INSIGHT

Points vs. Tokens

Points offer the growth benefits of tokens without the regulatory risks.
They incentivize usage and act as a hook for new users.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Take the Unchained 2023 survey!

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, which 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

Thank you to our sponsors!

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!