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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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Podcast summary created with Snipd AI

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.

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