Points Programs & Token Distribution

Given the open-source nature of the industry, anyone building a blockchain-enabled product can leverage existing code in order to deliver use cases within their application, as long as they comply with the licensing terms.

This newsletter aims to cover the most relevant web3 product releases so that entrepreneurs and builders are aware that, in many cases, they don't necessarily need to build every single feature from the scratch, potentially saving valuable development budget.

Additionally, some of the products & tools I cover are built by top notch teams, with a proven track-record and in most cases are already audited, which means another potential saving opportunity as audits don't come cheap!

Let's get into it.

If you have been remotely aware of what's happening in crypto land, at the very least you heard of "points programs", a tool being used by most crypto projects to:

• Build (and engage with) its community (aka acquire users) and

• Launch and distribute tokens

One of the Web3 principles (at least in paper) is allowing users to participate in the protocol growth and being being rewarded for it: Bitcoin miners share their electricity in order to validate transitions and for this, they are rewarded with newly minted Bitcoin. Uniswap users were rewarded with UNI for being Liquidity Providers and/or swapping tokens. Other projects distributed tokens via liquidity mining, quests and user activity criteria.

In summary, Participation equals Ownership.

These days, every other project is distributing tokens via Points Programs, which can be a blend of all of the above.

• User-activity can be tracked and rewarded with points which later on become tokens that end up airdropped or claimed into users’ wallets.

• Points help jumpstart network activity and overcome the cold-start or chicken-and-egg problem.

• Points-to-token conversion can be completely flexible and at the discretion of the project.

• There is no promise that points would even convert into future airdropped tokens.

• There is no money, fiat, crypto exchanged between the user and the project for points or tokens.

You can see how Points Programs have many advantages versus previous methods, both in terms of legals but also due to the flexibility the team has when it comes to changing the points-to-token ratio at any time, as no promises or contract with the users is ever in place.

Using points, retail can “invest” earlier and hopefully get a cheaper price than if they waited until after the TGE. One can argue that points might represent a more equitable way to reward users for their participation.

Stack is a platform for creating and managing points systems onchain. It provides a flexible and modular approach to implementing point-based systems. The Points Protocol is a Solidity smart contract that enables the creation and management of point systems.

By using its SDK, available in Javascript and Typescript, projects can integrate Stack to their app in minutes, and start issuing points to their users programmatically with a simple CSV upload.

More importantly Stack allows teams to understand the relationships with their users via personalized dashboards that come out of the box. I personally found Stack via the 747 Airlines community in Warpcast. Have a look at their HighMiles points system and leaderboard powered by Stack.

Lastly, teams can create token rewards and users can redeem their points for tokens, which ultimately what they want.

If you are a founder building a web3 platform, looking to grow a community, encourage user activity and ultimately launch a token, Stack should be in your radar.

Distributing a token among investors, team members and community can often be a daunting process. There are multiple platforms that provide this service but what if tell you there is one that is fully onchain, trustless and 100% free?

Hedgey is a free onchain token and investor lockup platform that projects use to distribute tokens via dashboards for both issuers and recipients. It is used by onchain organizations to distribute tokens using onchain, programmatic token releases.

Its core tools combine onchain token streams and periodic release schedules that allow teams to distribute and automate token releases to key recipients in a secure and trustless way, meaning, the tokens are held by escrow smart contracts in a non-custodial fashion.

Setting up a Token Vesting schedule (typically for team members), or an Investor Lockup schedule, literally takes minutes and 3 simple steps.

Check it out by yourself:

But there's more. Hedgey provides a vast array of features including:

• Treasury Lockups and Treasury Swaps

• Token Grants (Arbitrum used HF for their STIP grants program valued at ~100m at the time)

• Token Claims (typically for community distribution)

• and more...

When it comes to adoption, Hedgey is quickly becoming the leading token distribution platform, trusted by some of the biggest teams in crypto:

Hedgey supports any standard ERC20 (that does not include a Burn or Tax per transaction) in most EVM networks including Ethereum, Polygon, Avalanche, Base, Mantle, Harmony, Fantom, Gnosis Chain, Celo, Boba, Arbitrum One, Optimism, EVMOS, Binance Smart Chain, zkSync and OkEx Chain.

It is compatible with popular web3 wallets such as Metamask and any other wallet supported by WalletConnect, as well as Safe and Fireblocks.

Last but not least, the contracts have been audited by Consensys Diligence plus other renowned auditors.

So, if you need to distribute tokens in one way or another, Hedgey Finance can be the platform to do so. Their team is super approachable via Telegram and you can easily book a meeting with its founder Lindsey Winder, I did myself.

I hope you enjoyed the Issue #4 of the Web3 Watch newsletter and I would appreciate feedback both in terms of content and also suggestions regarding open-source projects that will supercharge apps that haven't even been built yet, as long as they are legit of course!

If you are looking to build or deliver a use case via blockchain-enabled technology check Labrys out, this is what we do day in day out. Alternatively don't hesitate to drop me a DM, always happy to have a good web3 chat.