Embedded XP Points
Points have entered the crypto zeitgeist as a new tool that app builders are leveraging to enhance user retention and engagement. This kind of shift in the user base is fine if the persona you’re attracting through extrinsic incentives has a reason to stick around (continued incentives and/or underlying PMF) or if they’re still net additive for your particular business model—think credit card points or airline miles maximizers. In our case, we had a sustainable business model that could fund the continued existence of the points program. But any app that’s funding rewards unsustainably from their balance sheet should do so with caution and be cognizant that when subsidization ends, users who are simply responding to incentives will churn, especially since they were never the target user of the core product.
Points are a new incentive primitive that significantly increases the scalability and utility of ERC-20s and will be the key innovation of this bull market.
Points essentially contain the right but not the obligation to redeem for underlying ERC-20s at a future date.
Points rely on highly performant off-chain database systems called Servers to store and verify individual point balances.
While Servers require slightly higher trust assumptions, they are approximately 100 MILLION times more performant than Ethereum Layer 1.
Networked Servers can also be utilized to create redundancy and improve data guarantees.
Meaning: points are scalable.
So how do you earn points?
Points are typically earned through on-chain actions through wallets like Rainbow and L2s like Blast, but they can also be assigned for non-blockchain use cases.
Imagine a payment card that rewards users with Points that can later be redeemed for flights, hotels, or even meals!
Points are a MASSIVE opportunity bridging Web2 and Web3, and I anticipate large companies around the world to adopt them.
Use-cases include:
- incentivizing consumer loyalty
- mining user behavior data
- and even scoring and ranking posts in forums!
Quest's Solution
The Embedded XP & Levels UI showcases a progression system with visually striking level cards. It's crafted to engage users by displaying their experience points (XP) and unlocking new levels within a community or platform.
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