DeFi

Why DeFi protocols like to offer “points” before airdrops – DL News

Published

9 months ago

9 May, 2024

CoinFlix Staff

Why DeFi protocols like to offer “points” before airdrops – DL News

Protocols awarding points to their users are proliferating.
Points systems generally suggest that a protocol is preparing for an airdrop.
The points have potential regulatory benefits.
But some find them predatory.

Rewards programs launched by NFT marketplaces Blur and Tensor are taking over decentralized finance.

DeFi protocols that award points to users who complete certain tasks — like trading or locking their tokens — have found a new way to attract and influence users, their supporters say.

But perhaps just as importantly, these protocols may have found a way to avoid a perilous regulatory debate.

“There’s now a meme like, ‘Points are the quantitative representation of a user’s contribution to the network,'” said Kellan Grenier, co-founder of Parcl. DL Newsmocking the stilted tone of press releases and blog posts that detail the projects’ recently launched points systems.

At least that’s what each project says. But most people understand that some points suggest that the protocol in question is considering an airdrop, a distribution of newly minted free tokens.

Airdrops are intended to reward long-time users and can be worth tens or even hundreds of thousands of dollars for some.

As such, people often flock to protocols they suspect of planning an airdrop.

Some projects keep these plans secret, to ward off mercenary users looking for a quick buck.

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Others hint at future airdrops, happy to attract new users and their money.

Hinting at a drop while dictating exactly which activity is considered most valuable and deserving of reward, as points systems do, allows projects to direct user behavior like never before, according to those surveyed. DL News.

They can also attract users without actually pledging a token – which is useful in countries like the United States, where the legal status of tokens is disputed.

But some find this arrangement predatory.

“It’s critical”

Blur, the largest NFT marketplace by trading volume, is often cited as the first crypto project to successfully introduce a points system when it debuts in October 2022.

Since then, points systems have been introduced or announced by the NFT market Tensor; Rainbow crypto wallet; social media platforms Friend.tech and Warpcast; EigenLayer Ether Recovery Protocol; and Solana DeFi protocols Solend, Kamino, MarginFi, and Parcl, to name a few.

Parcl is a DeFi protocol on Solana that allows users to speculate on real estate prices around the world. Last week was announcement its own points system.

Grenier remembers seeing Blur and Tensor eating away at market share against their competitors OpenSea and Magic Eden. He thought this might be something Parcl could implement.

His intuition was confirmed this summer, when friendly.tech, which has its own points system, took off. He now says that points are necessary to survive in the hyper-competitive crypto ecosystem.

“It’s crucial,” he said. “We felt that if we didn’t have a points program, it would be difficult to maintain attention on our product and attract new people or new dollars.”

Beta testing

The benefit can be substantial.

MargeFi detailed its own points system on July 3. In two months, his crypto deposited in MarginFi increased sevenfold, reaching more than $21 million, according to data from DefiLlama.

It is now one of the most frequently cited protocols by people making lists of potential upcoming airdrops.

MarginFi deposits soared after the protocol implemented a points program.

“We wanted a real way to quantify user quality/activity. This was a step in that direction,” said founder MacBrennan Peet. DL News. “We plan to do a lot from here.”

However, the benefit goes beyond attracting new users and money.

“If you want to move capital into a pool or incentivize people to explore new products on your platform, you can incentivize those things with points,” said an associate at a crypto venture capital firm, who requested anonymity to speak frankly about a subject whose legal status is still unclear.

“Some people view them as another proxy for tokens,” the partner said. “But sophisticated operators view them as a kind of beta test before releasing them to the market. Because most of the points campaigns took place before the token generation events.

Trevor Bacon, one of the co-founders of Parcl, said this was another example of crypto’s ability to put a new spin on finance.

“It’s completely unique to blockchain,” he said. “Loyalty points [exist], but it is not for network ownership. For example, you get loyalty points at Delta, [but] you do not own Delta stock.

“Lawyers love points”

In the United States, where regulators are cracking down on crypto, points can also allow projects to postpone the legal headache that can sometimes follow token issuance.

“For a certain group of teams that are risk averse or work in highly regulated jurisdictions, points are a way for them to engage in marketing activity before they have clear regulation,” said the VC.

“In order to issue a token, your legal advisor must sign it. And there are different opinions from different legal advisors. …While they’re still figuring that out, points offer them the ability to engage in the market and, you know, attract users, add liquidity into their systems without having to issue token.

When asked if he had heard this argument, Grenier refused to answer directly.

“As far as we know, lawyers love points,” he said.

Counterpoint(s)

But things have their critics.

“Users pay a fee to earn points that have no known value, no distribution time frame, and can be changed retroactively,” Solend said in a blog post announcing its own points program. “They take advantage of high expectations and avoid accountability. »

Solend’s pseudonymous founder, who goes by the name Rooter, said most points programs capitalize on “hype and FOMO.”

“Some projects overuse this by teasing an airdrop for months,” Rooter said. DL News. “The original incentive program (liquidity mining, launched by Compound) is better for users because it is open rather than being a black box.”

Solend already has a token. The rewards for accumulating points on the platform are specified, as is the duration of the program.

Whatever the pitfalls, the protocols are riding the wave.

“The beautiful thing is that the pie gets bigger for everyone, which is fantastic,” Grenier said.

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DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

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DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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