Points Program

Definition

Points programs track user activity before a TGE. They create expectations of future airdrops and can drive mercenary usage, so TVL and volume under points should be treated as incentive-driven until proven otherwise.

Points are not tokens. They are optionality plus social coordination. Your research should state that clearly so you do not accidentally value a ledger of IOUs as circulating equity. Incentive cliffs are as important as code audits for farm TVL.

Usage may collapse after TGE when points convert or stop mattering. Build post-incentive scenarios for fees, TVL, and retention before you underwrite the launch valuation. Settlement demand and fee quality beat vanity throughput slides.

Opaque formulas invite speculation and gaming. Prefer protocols that publish criteria — and still assume farmers will optimize whatever is measurable. Fragmented L2 liquidity can strand size even in busy ecosystems.

Why researchers care

• Points are not tokens until they become tokens.
• Usage may collapse after TGE.
• Treat points TVL/volume as incentive-driven until proven otherwise.
• Opaque rules increase governance and distribution risk.

How to use it in research

• L2 points season with rented bridging activity — discount “users” until after TGE.
• Perp DEX open interest tied to points multipliers — stress-test without multipliers.
• Points converting at unclear FDV expectations — separate product quality from launch microstructure.

Common mistakes

• Valuing points as if they were liquid tokens today.
• Assuming loyalty outlives the program.
• Using points-era metrics as the base case for fundamentals.