How Web3 Technology is Revolutionizing Marketing?
Points, member rewards, and loyalty programs have been marketing tools we have used for years in the Web2 era. However, in the Web3 era, we are seeing a shift back to points as a marketing tool, but with a twist. Today, Web3 projects are using tokens as incentives, evolving loyalty programs, and combining them with blockchain technology. In this article, let’s explore how new technologies like NFTs, DeFi, and DAOs are transforming traditional marketing tools.
In the Web2 era, user participation did not equate to ownership, and consumers were unable to share in the company’s growth dividends. Users would scroll through their Facebook feeds, make purchases on Amazon, and contribute a significant amount of data and time, but they were unable to obtain any equity in the platform. The final step of an IPO would reward the retail investors, leaving them isolated from the capital game. This led to a severe imbalance of interests.
With the emergence of Web3, starting with Bitcoin, cryptocurrencies introduced a new incentive model. Users could participate through activities like mining and trading to earn native tokens of a project, becoming true stakeholders. This led to the rise of ICOs, where users could directly invest in early-stage projects, bypassing the layers of VC scrutiny. Airdrops further democratized finance, offering users the opportunity to receive project tokens for their contributions.
During the DeFi era, liquidity mining became popular, allowing users to earn project tokens by providing liquidity and participating in governance. This achieved the concept of “earn while you participate,” forming a close-knit community of shared interests between users and projects.
However, liquidity mining also exposed some issues: rapid token issuance leading to inflation, users seeking short-term gains by quickly selling staked tokens, and project teams lacking long-term incentives for users. Developers began exploring more sustainable incentive solutions, leading to the emergence of points.
The point system combines the essence of traditional loyalty points and Web3 token incentives. It distributes points to users based on their contributions in dApps, such as transactions, social interactions, and gaming. These points can be redeemed for digital assets like NFTs, used for project governance, or converted into tokens at a predetermined ratio. Unlike liquidity mining, points are usually not directly tradable, and the rules and timing for converting them into tokens are controlled by the project team. This prevents excessive inflation and short-term speculative behavior by users.
Moreover, points combined with the latest blockchain technology bring revolutionary changes to user experience. For example, Token Bound Accounts bind user identity, points, and NFTs together, enabling seamless point management and usage. Evolving NFTs dynamically update their attributes based on user contributions, stimulating the desire for collection. Pledging NFTs also provides unique benefits to users, such as participating in project governance and earning point bonuses. These innovative applications transform points from mere numbers into a closely integrated system with identity, social interactions, and entertainment.
In addition, Sponsored Transaction technology eliminates transaction fees for users, reducing barriers to entry, while Account Abstraction enables social media logins, eliminating the need for users to manage private keys. These technological innovations allow more users to easily participate in the Web3 points economy.
How will the point system evolve in the future? With the continuous maturation of the Web3 ecosystem, we can expect the emergence of more imaginative incentive models. On one hand, with the development of cross-chain technology, points may break through ecosystem barriers, achieve full-chain circulation, and create greater value. For example, one of the winning submissions at this year’s ETH Denver was the application of ERC-6551 for trading points. On the other hand, with the rise of DAOs, points may become deeply intertwined with mechanisms like community governance and profit distribution, directly transforming user contributions into decision-making power and revenue rights.
By using points, project teams no longer need extensive pre-token sales. Retail investors can “invest” earlier with points and potentially obtain tokens at a cheaper price than waiting for a Token Generation Event (TGE).
However, due to the unclear timing of airdrops and the ratio between points and tokens, this tool is more advantageous to the project team compared to previous airdrops. The point system will only be effective when there is a high level of trust between users and project founders. The community must believe that their points will be converted into tokens at a reasonable price within a reasonable timeframe after interacting with the protocol. As the popularity of the point system increases, there will be bad actors who abuse this trust. Ultimately, serious violations of trust involving a significant amount of funds could lead to the failure of points as fundraising and user participation tools.
Nevertheless, overall, the rules of the Web3 game are moving towards a healthier direction. By harnessing the innovative potential of blockchain technology, brands can establish a transparent, fair, and trustworthy points economy, allowing every user to share in value growth.
Opinion articles present diverse viewpoints and do not represent the stance of “WEB3+.”
Proofreading Editor: Shao Yuanting
