Points Conversion Events (PCE)
Points within crypto ecosystems are most valuable when there is periodic or permanent utility
How do I use my Points Data
The act of redeeming the points the user has earned into some form of reward. PCEs can happen periodically or only once, depending on the use case.
Eg: Based on the leaderboard position of user , each user gets amount of $COIN ERC20 tokens
Eg: Every 100 points equals 1 $TONK token
E.g: Top 100 users on the leaderboard get a Genesis NFT
E.g: Points can be redeemed to spin the wheel for a chance to earn a Bored Ape
General Principles for Points Conversion
In the ambit of Web3 businesses which are often highly sensitive to community participation, the accurate measurement of user effort has a very direct application: it serves as a direct proxy for user responsibility and possibly ownership.
The resolution of points to some form of utility is paramount to build user trust.
- Points can gain utility only periodically (e.g at the end of seasons convert to an Discount tickets).
- Points can also have a more general use (eg. burn points to spin the wheel and earn rewards).
- Projects often utilize points as a one-time tool to garner community support in favor of their projects’ launch.
More holistically, Web3 Projects have 4 key things to offer to users:
Access to Elevated Service
Assuming that the most valued users on a Web3 platform are early adopters, point systems are an excellent way to gather beta testers for new features. Even if fewer early adopters are found, you’ll likely get enthusiastic participants who provide vocal and constructive feedback. Early access to features grants these users an elevated status. It’s common practice to provide special benefits and concessions to these users, similar to how DeFi protocols offer discounted fees and access to niche financial products like launchpads.
Access to Elevated Status
Quantitative measurements of users’ value to the platform don’t necessarily have to result in tangible returns. Many gamified experiences thrive purely on the implied status of these numbers. Investing time and resources in brand growth isn’t always feasible, so points often represent sustained or periodic access to value, either in cash or kind. Elevated status can be granted by bestowing badges or permanent indicators of achievement like SBTs or NFTs, which are digital representations of success.
Access to Accrued Value
To bootstrap an early community, make it practically free or positive-sum for your most avid users. Redistributing earned revenue meritocratically creates value channels for your core community. This makes it more valuable for users to stay within the core user base rather than considering competing products. Fee-based products like memecoin factories and launchpads often redistribute collected revenue hierarchically, equitably, or randomly among users. Fee-driven products like lending markets, bridges, and perp platforms use points to refund fees collected from certain users.
Access to Created Value
Token creation and distribution are fundamental aspects of most Web3 projects. While the traditional practice was to distribute ownership among a pre-existing user base, market saturation has led to narrative-led growth strategies. Projects now bid for the attention of high-net-worth individuals and key communities within the crypto ecosystem. The goal is to entrust partial ownership to enthusiastic early adopters to bootstrap growth. It’s essential to measure the social and fiscal contributions of these participants before granting them co-ownership. Implementing points systems to further community ownership has been widely used.