The New Meta: Onchain Points
Everyone, Take Notes… ✍️
👋🏽 Hello everyone, gm gm, WELCOME BACK to another edition of the Overpriced JPEGs newsletter!
The new meta is here: onchain points! Today, we’re talking all about this fascinating web3 marketing concept.
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Kidding, there’s no points for you here. However, if you look around, you’ll notice that points are all the rage right now.
Rainbow is giving out points for everyone that starts using their wallet – you get instant points by importing your existing web3 wallet into Rainbow.
MarginFi, a DeFi protocol on Solana, has built a cool points leaderboard in which users can see their progress.
Users earn points by borrowing & lending assets on MarginFi.
Kamino, another Solana DeFi app, says that points are coming soon. 👀
And even Lens is teasing points…
Everyone hopes that these points will result in airdrops worth $10,000s, just like Jito distributed recently.
So are onchain points the new meta?
Maybe… This is a new web3 marketing strategy that can help any app accumulate new users and liquidity while providing a gamified experience to its users.
Therefore, I think you should be aware of this concept, regardless if you’re a developer, marketer or regular user in web3.
For Developers: Onchain points boost user activity, helping to test the capabilities of your product.
For Marketers: These points are a magnet for attracting new users and liquidity.
For Users: You get more enjoyable onchain interactions and rewards (often airdrops).
Today, I’ll share a few practical examples of onchain apps implementing onchain points that we can learn from.
Note: These points aren’t onchain. However, users earn them from onchain activities, which is why I’ll call them onchain points throughout this article.
Let’s dive in. ⏬
How Onchain Points Provide a Better Experience
Onchain points represent a digital rewards system that offers points to users for engaging in specific onchain activities like swapping, bridging, providing liquidity or borrowing assets.
Most of the time, these points have 0 value – it’s just a way for platforms to measure user engagement & for users to keep track of their activities.
However, points frequently play a role in qualifying users for upcoming incentives, such as token airdrops.
That’s the ultimate aim for every user accumulating onchain points – to eventually convert them into a substantial airdrop.
Therefore, apps adopting onchain points have drawn numerous new users eager to farm a potential airdrop.
Rainbow Wallet Points
Rainbow’s points system is a great example of an app that hasn’t promised an airdrop. They’re just giving worthless points to their users.
Yet, many are starting to use Rainbow hoping for an airdrop, which I personally think is coming.
Rainbow offers points to users based on:
The swaps they make on Rainbow
The Rainbow NFTs they own
Their wallet balance
And, here’s the most interesting part: Rainbow offers points to users that have previously swapped assets on MetaMask.
In the next section, I’ll tell you why that’s interesting & important so keep reading. ⏬
MarginFi, a DeFi application on Solana introduced points a few months ago, and they’ve publicly announced that these points would at some point turn into airdrops for users.
So this is an example of an app promising an airdrop based on how many points users gain.
You can accrue points by lending and borrowing assets on their platform, as we highlighted a few weeks ago here.
By accruing points, you get to climb up a global leaderboard (screenshot in the intro above) where you get the feeling of competing against others.
And this is cool! Why? A few reasons. 👇
Why Onchain Points Matter
Historically, airdrops have happened mysteriously. Most users didn’t even have a clue that they received an airdrop when they did.
Here are 2 examples.
ENS – distributed $1,000s to everyone that minted a .ens handle, something users didn’t expect. As a result, ~$46 million worth of $ENS was never claimed.
Arbitrum – distributed $ARB tokens to early users. Again, some users didn’t expect this, so $55 million were never claimed.
Points change that. By accruing points, users have the ability to transparently see their progress on a daily basis.
Furthermore, users are aware of which onchain activities result in points.
This is much better than hinting at an airdrop without any details about what people should do and not do.
Besides, when users see that they’re climbing up a leaderboard, they feel like they're competing against other people, which further amplifies people’s drive to do even more onchain activities.
Targeting the Right Audience
I’ve told you how Rainbow gives points to those who’ve used MetaMask swaps in the past. Why do they do that?
Because that’s their target audience.
Rainbow – like any other wallet – makes money off of in-app swap fees.
Users who swap tokens right in their wallet, are the users that Rainbow needs to target & reward via onchain points.
This is a game-changer for marketers.
Another huge boost that onchain points bring to the table are rewards for referrals.
Users gain points for referring new users, and thanks to the onchain nature of DeFi, they can also earn additional points based on the activities of their referrals.
For example, on MarginFi, those who refer users can endlessly earn from all future referrals that are generated by the users they referred.
Sounds a lot like a pyramid scheme? That’s because it is!
This sort of referral program is common in most typical businesses too. It’s how apps gain new users.
Wrapping Up 🧵 What’s Next?
The narrative around onchain points is intensifying right now. Someone even dropped a token called $POINTS, which generated 100x for some who got in early. 😂
I think that most onchain apps will introduce points. Many of these will turn into airdrops, while some will remain just a dream.
Remember that points don’t always equal airdrops. Zapper, for example, introduced points a long time ago as rewards earned by users for activities like token swapping and liquidity provision.
These points have never become an airdrop. 😢
So if you’re going to use apps that give out points, do it because it’s a good app, not because you’re farming an airdrop.
Personally, I started using the Rainbow Wallet ever since they announced points and I realized that it’s a much better wallet than everything I’ve used in the past.
Even if they don’t give me an airdrop, I won’t be mad because I’ve discovered an app that I really enjoy using.
With all of that said, I firmly believe that onchain points are a great marketing tool that all apps should take advantage of to attract & retain customers.
Besides, if they’re ever ready to decentralize the application, they can seamlessly airdrop the governance token to the most engaged users.
I love points! If you do too, reply to this email with a GM.
Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.