Unchained

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

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.

43:13

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Li Jin

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Quick takeaways

Points programs in the crypto space have the potential to incentivize user behavior and drive engagement, but they need to be carefully designed to avoid fostering a discount mentality and incentivizing inorganic behaviors.

Bringing points on-chain in the crypto world could unlock universal loyalty systems, personalized experiences, and composability possibilities, but it could also raise regulatory issues and require consultation with legal and regulatory experts.

Deep dives

Points Programs: Incentivizing Usage and Engagement in Crypto

Points programs are becoming popular in the crypto application layer as a way to incentivize usage and engagement. Applications give users off-chain points to reward certain behaviors like engagement, retention, or transacting. Popular projects like Rainbow Wallet, Blackbird, and Blast have instituted points programs. Points programs are seen as a way to get the benefits of issuing tokens without the downsides, as points don't have regulatory risks or economic value unless specifically assigned. However, points programs run the risk of incentivizing inorganic behaviors and attracting bargain hunters if designed poorly. Designing points programs strategically and using them to engender loyalty can be more effective.

Intro

2min

The Rise of Crypto Points Systems

10min

Navigating the Complexities of Customer Loyalty through Point Systems

6min

Navigating Crypto Loyalty Programs

12min

Weekly Crypto News Recap: FTX and Market Developments

3min

Recent Developments in Cryptocurrency Regulations and Market Dynamics

5min

Cryptocurrency Regulation and Proposed ETF Adjustments

5min

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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, 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

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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!

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Unchained

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

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Points Programs: Incentivizing Usage and Engagement in Crypto

The Potential of On-Chain Points and Universal Loyalty Systems

Careful Design: Avoiding Discount Mentality and Driving Loyalty

Regulatory Considerations and Future Developments

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