Web3 Points: The Frontier of Community Building

Web3 Points: The Frontier of Community Building

Mar 23, 2024

Time to Read: 5 minutes

Web3 points is the latest hot topic in the crypto space. Let’s get into that right away!

What is Web3 Points?

Web3 points consist of loyalty programs that provide web3 users an opportunity to earn and redeem points. Not only that, you can use these points to renew your membership subscription and purchase digital collectibles, coupons, tickets, and more.

But how can one earn these points? You get rewarded with web3 points for specific transactions, participation, or engagement. 

For example, Rainbow Wallet initiated a program to reward the community with points. They began this process by distributing Rainbow Points to every Ethereum user through their wallet.

Evolution of Web3 Point System

Points-based reward programs are one of the most successful marketing strategies in the business world. The simplest example is the shopping points you get from your nearest supermarket. 

Implementing such reward systems encourages customers to purchase from the same store again. In addition, this subconsciously increases customer loyalty with time.

Web3 projects also started to use this point system to attract new users. Moreover, these projects aim to increase user engagement for their platform using the reward points. 

Although crypto and blockchain are rapidly developing, their total loyalty-rewarding potential remains untapped. The major shift towards web3 incentives has become popular in recent years.

In the present world, users are not just inclined to the services they receive from a platform. They now look for personalized experiences and connections with projects. 

One such major evolution of reward was paved with the help of smart contracts. Since then, tokenizing reward points has been crucial in revolutionizing user experience. 

In addition, the direct involvement of brands and their collaboration with web3 platforms became the new norm. All these transformations enhanced the customer experience, attracting more partners and participants to the ecosystem.

Now, the web3 points have a presence in a wide range of categories. At present, at its most evolved stage, this point system helps to:

  1. Incentivize the Users: For a web3 ecosystem, engagement is important for its future growth and development. In that case, providing valuable points encourages users to participate in various activities that boost the web project's community-based activities.

  2. Increase Adoption: The earning potential attracts potential users to explore the project's services. Such increased user inflow helps to promote the application and services across the crypto space.

  3. Enhance Governance: Users feel empowered when their opinions regarding decision-making matter. Users with substantial web3 points can influence the governance proposals through voting. 

Why is Community Important in Web3?

The landscape of web3 is evolving with time, and community plays a crucial role in its development. 

Community members can be the first users of a product or service a project develops. Once hundreds of members try the services, they can evaluate its pros and cons.

The developers of this web3 project can then go through the feedback received. Moreover, they can work to resolve the issues the community members face.

The word-of-mouth marketing of the members is an essential factor that drives the project's popularity. Once a user benefits from the service of a platform, they'll share it with others, adding more user base for the ecosystem.

With the possibility of gaining governance, the community can control a project's future developments. For this reason, we can consider a strong community as decision makers of that particular ecosystem.

In addition, numerous web3 projects are built using open-source protocols. As a result, anyone with a specific skill set can contribute to the development of the ecosystem.

Education is a major element that is still lacking when it comes to web3, which acts as a barrier for beginners in this space. Here, the communities offer support through online platforms by answering questions and providing necessary guidance.

Let's take the example of a popular Reddit-based crypto community, r/CryptoMarkets. This online community has over 1.6 million users who are involved in discussing various topics around crypto.

Here, new users can ask any questions related to crypto-based topics. Once a person posts a query, they'll receive opinions from expert people from that particular domain.  

Kelp DAO also introduced $KEP (Kelp Earned Points) tokens to improve liquidity to EigenLayer Points. Therefore, you can trade or transfer your reward points.

In addition, $KEP is developed using the ERC-20 token standard. For this reason, you can use this token to participate in various DeFi-based activities.

Furthermore, the introduction of $KEP will boost point-based trading. As a result, it creates a potential to develop a trader’s community around web3 points. 

Simply put, the community is the core of web3. 

Web3 Point System: A Great Tool to Boost Community Engagement

CEO of a loyalty program app, Shping, Gennady Volchek, said these rewards are a potential tool to link between a brand and customers. Moreover, he believes that the rewards influence the consumer behavior.

Volchek also emphasizes that combining blockchain, cryptocurrency, and loyalty programs empowers brands to connect with customers regardless of location. Shping provides shping coin (SHPING) as a reward to its customers and this token has a market cap over $28 million. 

The point system motivates users to earn and spend the reward points, increasing engagement. Moreover, using this system, it’s easier for a project to acquire a new user base with less marketing cost. 

Examples of Projects with Web3 Point System

Some of the popular examples of projects that successfully implemented the web3 point system include the following:

1. EigenLayer

EigenLayer protocol allows users in Ethereum (ETH) re-staking. Currently, they issue 62 million web3 points daily, which adds up to over 1.85 billion points in a month. 

According to Thor Hartvigse, an investor of Heartcore Capital, 24 points are earned for each ETH staked.

2. Kelp DAO

Kelp DAO has also introduced KEP, which represents EigenLayer points as tokens. To date, users have claimed to have over 4.5 million KEP tokens, trading at around $0.17.

Kelp DAO’s TVL was $140.03 million on January 1, 2024, and is currently valued at $741.25 million. A whopping 425.60% surge!

3. Renzo

Ethereum staking protocol Renzo rewards ezPoints to the ETH restakers. Users have earned over 165 million points to date.

At the beginning of 2024, Renzo’s TVL was valued at $10.51 million; at present, its TVL is valued at $925.91 million

4.  Blackbird Labs

Blackbird Labs is a technology platform that facilitates web3 hospitality by connecting restaurants and customers through their app. They utilize the Blackbird Protocol, and its native fungible token is $FLY.

Restaurants and diners will be rewarded with $FLY tokens for their contributions to the restaurant industry. For example, you will be rewarded with this token for checking in and making payments for food and drinks.

Final Thoughts

The future looks bright for the web3 point system. Both users and founders can benefit from implementing an effective reward system.

In the coming time, the web3 community might compare the point system before choosing a particular project. In that case, projects that provide the best web3 points tend to have a larger community base. 

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