Points Program
A points program awards non-transferable units for specified user activity before a token exists. Points carry no market price and no contractual conversion rate, but they are the ledger a protocol later uses to size an airdrop or a whitelisted sale allocation, which makes an accumulated balance an expectation of future supply rather than a loyalty perk.
TradFi parallel: Like airline miles issued before the airline has published a redemption chart: the balance accrues while the issuer keeps the right to decide what it converts into, and how many more it will print in the meantime.
Key Takeaways
- 01Points are non-transferable units awarded for specified actions and redeemed mainly for an airdrop; they carry no promised conversion rate and no on-chain market price, though the claim trades on pre-market venues
- 02Issuers favour them because they are less likely to be classified as securities, are insulated from market volatility, and read as a familiar loyalty scheme
- 03Point supply is uncapped and issuer-controlled, so every new participant and multiplier dilutes an existing balance
- 04Multipliers steer behaviour: ether.fi paid more for longer staking, EigenLayer weights value and duration, and Pendle's YT market was reported at 210 ezPoints an hour against 1 for holding ezETH
- 05Conversion is where points become supply: Backpack allocated 240M BP, 24% of total supply, to points program participants at TGE with nothing to team, founders or investors
- 06A points-led distribution front-loads zero cost basis holders, and farmer rebalancing straight after conversion is the expected pattern rather than a distress signal
How It Works
Tokenomist's 2024 write-up on the trend, which it named pointonomics, defines points as non-monetary units that reward specific actions or contributions within a network, unlike token incentives, which have tradable value. They are primarily redeemed for airdrops. The advantages it lists are mostly about the issuer's risk: points are less likely to be classified as securities, which reduces legal exposure; they are unaffected by market volatility, so the reward's headline value is stable; they read as a familiar loyalty scheme; they stay inside the ecosystem, keeping incentives aligned with the platform; and their limited tradability reduces the room for manipulation and fraud.
The costs land on the participant. Points can be issued in unlimited quantities by developers, so the denominator behind a balance is never fixed and every new participant and every new multiplier dilutes the existing scoreboard. They cannot be transferred on-chain, though the claim they represent trades on pre-market venues: Whales Market escrows points and pre-TGE allocations and settles them at TGE, with more than $300M of cumulative volume across the two. And they are redeemable only for what the issuer decides to redeem them for. The multiplier design is where programs steer behaviour: EigenLayer awards points based on the value and duration of contributions, ether.fi raised the multiplier the longer ETH stayed staked, and Mitosis spreads earning across liquidity provision, governance participation and community work.
Even without transferability, points get priced. Pendle's yield split is the clearest case: holding 1 ezETH from Renzo earns 1 ezPoint per hour, 24 in a day, while the write-up's dashboard reading for YT-ezETH on Pendle was 210 ezPoints per hour, 5,040 in a day. The farmer pays the YT premium, roughly the underlying price minus the PT price, which is written down to zero by maturity and is typically a small fraction of principal, which is what makes YT leveraged point exposure, and Tokenomist's write-up is blunt that there is no guarantee the points end up profitable. The opposite side of the same market lets a holder sell the exposure: swapping into PT locked a fixed yield near 21% APY at the time of writing, against the 3% to 4% staking yield plus points. A points balance therefore has an implied price even though no one can buy it directly.
Conversion is the moment a points program becomes tokenomics. Backpack's March 2026 TGE put 240M BP, 24% of a 1 billion total supply, with points program participants, plus 10M (1%) with Mad Lads NFT holders, and allocated nothing to team, founders or investors at launch, leaving the remaining 75% on a milestone-driven schedule. USD.AI took a different route for its CHIP sale, offering a whitelisted allocation with guaranteed size based on points accumulated in its Allo Game campaign. In both cases the points ledger, not a cap table, set the initial distribution. Read the resulting float the way you would read any TGE: a community-facing initial supply avoids insider overhang, and it also concentrates zero cost basis holders into a single event. Expect visible movement straight after conversion: when collateral left Lighter following its airdrop, analysts at Bubblemaps and CertiK read the outflow as typical airdrop-farmer and hedger rebalancing rather than distress, the same pattern seen at Hyperliquid and Aster.
Real World Examples
EigenLayer: points for value and duration of contribution
View →EigenLayer's restaking model rewards users for contributing resources to the network, with points awarded on the value and the duration of the contribution and redeemable for an airdrop later. It is the archetype of the design: the protocol gets committed capital before it has a token, and the accounting for who deserves what is deferred.
ether.fi: a multiplier that paid for time
View →ether.fi's programme awarded points on the amount and duration of staked ETH, with a higher multiplier the longer the stake was held. The multiplier was the policy lever: it converts an undifferentiated deposit race into a duration commitment, which is what the protocol actually wants from restaked capital. The multi-season loyalty programme ended after Season 5 on 31 May 2025 and was replaced by monthly membership points.
Pendle: the market that prices points without trading them
View →Splitting a yield-bearing token into PT and YT let farmers buy the point stream and let the risk-averse sell it. 1 ezETH earned 1 ezPoint per hour; YT-ezETH was reported at 210 per hour, at the cost of a token whose premium is written down to zero by maturity. The mirror side was a fixed yield near 21% APY through PT, against 3% to 4% plus points for simply holding.
Backpack: points as the entire initial distribution
View →Backpack's BP token generation event on March 23, 2026 released 250M of a 1B supply, of which 240M (24%) went to points program participants and 10M (1%) to Mad Lads NFT holders. Team, founders and investors received nothing at launch, with their upside tied to company equity, and the remaining 75% follows a milestone-driven structure.
USD.AI: points sizing a sale rather than an airdrop
USD.AI's CHIP token sale on CoinList was whitelisted to participants in its Allo Game campaign, with guaranteed allocation sized by points accumulated. 700,000,000 CHIP (7% of supply) was sold at a $300M FDV with 100% unlocked at TGE. Points here bought access and size in a paid sale, not a free distribution.
Frequently Asked Questions
Are points worth anything before the token exists?
They have no on-chain market price, because the balance itself cannot be transferred, but the claim it represents does trade on pre-market venues such as Whales Market, which escrows points and pre-TGE allocations and settles them at TGE. They do acquire an implied price wherever the activity that earns them can be traded: Pendle's YT and PT markets let farmers pay for a point stream and let others sell it for fixed yield, which reveals what the market thinks the points are worth. That implied price is a market opinion, not a commitment from the issuer.
How is a points program different from an airdrop?
The points program is the ledger; the airdrop is the event that settles it. Points accrue over months of measured activity, then a conversion rule turns balances into token amounts at a single moment. The distinction matters for supply analysis, because the program determines who holds the initial float and at what cost basis, while the airdrop determines when that supply arrives.
Can the issuer change the rules mid-program?
Yes, and the structure assumes it. Points can be issued in unlimited quantities, multipliers can be added or retired, and the conversion ratio is typically published only at the end. That is the main asymmetry in a points program: participants commit capital and activity against a denominator and a payout function the issuer still controls.
What does a points-led distribution do to the float at launch?
It makes the initial circulating supply community-facing, which removes the insider-heavy float that a private round produces. Backpack's structure put the entire 25% TGE supply with users and NFT holders. The trade-off is that the recipients hold at a zero cost basis and arrive together, so expect visible selling and hedging in the days after conversion regardless of how well the program was designed.
Related Terms
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