How to best use points to drive behaviour in your crypto app

Silvio Busonero
August 30, 2023

A hot topic discussed recently is about points. Many web3 projects have already a point system to incentive users - and notably Rainbow has just launched a simple point accrual mechanism.

Crypto makes it easy to incentivize user action online. Web3 businesses need to find the right balance between project incentives. Points, while not being a web3 native tool, can help achieve that.

Points respond to a need of web3 projects, that is test and iterate data driven growth strategies without an upfront capital commitment. We'll see some points use cases and how to build a successful point system for your platform.

Why points are becoming so popular?

During the bear market marketing budget were razor thin (and still are to some extent). Several projects started to experiment with points.

You can hate (or love) point), but there are plenty of reasons why they are becoming so popular:

  • They can help bootstrap valid network effects without huge upfront capital commitment.  You can start a point campaign without having the buy in of investors or another stakeholder.
  • They can help to optimize the ROI of the airdrops. Projects can distribute airdrop based on the ROI they  want to achieve, rather to risk upfront capital
  • They are data-driven. To rank users with point you have to build some sort of tracking system
  • They can track on-chain and off-chain activities. Tokens have been traditionally allocating to incentivize mostly  on-chain behavior
  • They help better product development. Again, not having to manage and deploy airdrop strategies like traditional liquidity mining can help projects reach product market fit faster
  • They incentivize repeated product engagement. Using point sprints or season help to keep the users constantly engaged with your product. As we've seen in the web3 marketing playbook, the main purpose of web3 marketers is turning strangers into ambassadors and this can be achieved with continuous incentives
  • They have users compete with a leaderboard with real time feedback which greatly helps engagement

What are the pros and cons of points vs NFTs and tokens incentives?

Broadly speaking, we can see three ways web3 businesses can incentivize users to bootstrap the first network effects.

  • Airdrops. Retroactive, continuos (liquidity mining), vested, quests based... There are countless options. Data have shown a huge margin of improvements for traditional airdrop methods
  • NFTs quests. Campaigns that release badges upon tasks completion have been very  popular, but they also have limitation. The ROI of badge based quests is declining as too many projects jump in the "valueless NFTs" reward
  • Points. Tracking on-chain actions and rewarding them with points. A point system requests a tracking system and by nature the points campaign are more data driven. However they lack the trust and transparency of an on-chain solution

The future of incentivization will have both the trust and transparency of blockchain based system as well as an iterative, data driven approach of points.

What are the main challenges when building point system?

  • Investing in on-chain tracking. Tracking users require time. Iterating on the incentivization mechanics should be primarily a job for community and marketers - but the technical nature of web3 makes it hard to have easier incentives. At Tide, our no-code on-chain tracking can help you measure and incentivize the conversion events that matter for you
  • Using social media tracking and proof of work. Usually this is done through quest platforms.
  • Providing a native experience. Having your point system hosted in third party platform like Tide can help with acquisition, however embedding it in your product can unlock more use cases. Keeping the community closer to the product is generally more convenient. Tide offer integration options with embeds, SDK and widget to maintain a native experience.
  • The right communication. It is important to clearly state and communicate rewards in the call to actions. Also, giving the campaign a personal project touch can go a long way in driving engagement
  • Measuring point system. Measuring ROI of these activities is important to optimize the airdrop allocation and to scale the strategies

The rainbow point system

1) Swap or Bridge using Rainbow wallet:

• For Bridge - Instead of connecting with metamask, you can choose Rainbow as a wallet service provider from now on, this will farm points

• For Swap - You can use the Swap provided in the wallet

2) Refer Links: + Share your Refer Links to your friends and get 10% of their points

The magpie point system with dynamic NFTs

Magpie is launching several monthly trading competitions on Tide. Users get into these competitions by claiming dynamic NFTs, that evolve based on the application usage. This approach delivers a better engagement than using points only. Also, Magpie has integrated the NFTs in their application for a more native experience.

Best practices when using points

Start simple to launch and get more data to iterate, then roll out more complete program.


  • 1 on-chain task
  • 1 proof of work task
  • 1 referral tasks
  • Distributing tokens to top 10 users and run a raffle for the others

Other best practices:

- Use seasons and leaderboard. Seasons will keep your experiment limited and leaderboards can help build engagement

- Distribute some token rewards in the first week to build trust. Points have an inherent trust problem as they make the actual monetary reward uncertain. Distributing rewards timely can build trust and spread word of mouth

- Mix points with badges to increase engagement

- Use sybil protection mechanism like gitcoin passport

- Marketers should be working on points autonomously, without involvement of the dev team. Removing fixed development costs allow faster iteration.

Create your point campaign with Tide

Tide can help you test and distribute token distribution mechanism. Just go on Tide, create a community for free and get started with on-chain and off-chain tasks and analytics.

We make it very easy to track and reward users actions with tokens.

Get started now for free or contact us for a demo.

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