In the rapidly evolving world of Web3, points farming has emerged as a powerful mechanism for user acquisition, engagement, and ecosystem growth. From NFT marketplaces to decentralized finance (DeFi) protocols, projects are leveraging points systems to incentivize early adoption—often with the promise of future token airdrops. But what exactly is points farming? How did it evolve, and what are its benefits and risks for both users and protocols?
This article dives deep into the mechanics, history, and real-world applications of points farming, exploring key case studies like Blur, Friend.tech, and Eigenlayer, while unpacking the broader implications for Web3 innovation and sustainability.
What Is Points Farming?
Points farming refers to the practice where users earn non-transferable or off-chain points by interacting with a blockchain protocol—completing tasks such as trading, staking, or referring others. These points do not have intrinsic value but are widely believed to be redeemable for future token airdrops.
Think of it as a hybrid of two familiar Web3 concepts:
- Airdrops: Free distribution of tokens to users, often used for marketing.
- Liquidity Mining: Earning rewards by locking assets in a protocol.
However, points farming combines the best (and sometimes worst) aspects of both: it uses airdrop-style incentives to attract users while embedding long-term participation mechanics similar to liquidity mining.
👉 Discover how leading platforms use incentive models to grow their ecosystems.
It's also not unique to Web3. In traditional Web2 systems, airlines offer frequent flyer miles, and retailers run loyalty programs—all designed to boost retention through gamified rewards. Points farming brings this model on-chain, adding layers of speculation, community dynamics, and financial risk.
The Rise of Points Farming in Web3
According to Block Research, over 115 billion points had been distributed across various protocols by February 2024. The trend began gaining momentum with Blur, an NFT marketplace launched in October 2022. By rewarding early traders with points that later converted into valuable token airdrops, Blur quickly surpassed OpenSea in trading volume within months.
Since then, points farming has become a standard growth strategy across DeFi, SocialFi, and restaking protocols. Notable adopters include:
- Tensor (NFT marketplace)
- MarginFi (DeFi lending)
- Friend.tech (SocialFi)
- Jito (Solana liquid staking)
- Eigenlayer (restaking infrastructure)
These platforms use points to drive metrics like total value locked (TVL), transaction volume, and user retention, especially during early-stage development.
Case Study: Friend.tech – SocialFi’s Viral Gamble
Launched in August 2023, Friend.tech took the crypto world by storm with its novel "keys" system—where users buy shares in creators to access private chats. To fuel engagement, the platform introduced a points program distributing 100 million points over six weeks.
While exact criteria were never fully disclosed, points appeared tied to:
- Portfolio value
- Weekly trading fees
- Creator earnings
The results were explosive: 140,000 traders and $124 million in volume within the first month. However, interest waned due to lack of innovation—v2 wasn’t released until March 2024—and declining new user signups.
When the airdrop finally arrived in May 2024:
- The $FRIEND token dropped to $0.89 amid mass selling.
- Only 10% of tokens were immediately claimable.
- Users had to join new “Clubs” and follow 10 others to unlock the remaining 90%.
This design effectively forced adoption of new features—demonstrating how points can act as a behavioral hook. But technical glitches and transfer restrictions drew criticism, highlighting the risks of opaque reward systems.
Case Study: Eigenlayer – Scaling Trust Through Restaking
Eigenlayer, a pioneer in Ethereum restaking, quietly built one of the most influential points programs in 2023. Users earned points based on:
- Amount of ETH or LSTs staked
- Duration of stake
- Direct vs. third-party staking
By April 2024, Eigenlayer’s TVL surged from $1B to $15B—driven largely by anticipation around the EIGEN token airdrop.
However, the initial airdrop announcement sparked backlash:
- Only 5% of tokens were released in Q1.
- Users from 30 countries—including the U.S. and Canada—were excluded.
- No immediate token transfers allowed.
- Large stakers benefited disproportionately under linear distribution.
In response, Eigenlayer committed to distributing an additional 28 million EIGEN tokens to 280,000 wallets—showcasing how community pressure can reshape reward structures.
👉 See how top-tier protocols balance incentives and fairness in user rewards.
Despite controversy, Eigenlayer proved that well-designed points systems can drive exponential growth—even amid imperfect execution.
The Pros and Cons of Points Farming
✅ Benefits for Users
- Potential High ROI: Successful farms like Jito rewarded small stakers (~$40) with thousands in tokens.
- Early Access Opportunities: Points often grant priority access to future features or governance rights.
- Speculative Liquidity: Platforms like Whales Market and Hyperliquid allow pre-trading of points, enabling early monetization.
❌ Risks for Users
- No Guarantees: There’s no obligation for projects to issue tokens or honor point balances.
- High Gas Costs: Frequent interactions can lead to significant transaction fees.
- Low Transparency: Criteria for earning points and conversion rates are often unclear.
- Poor ROI Expectations: High fully diluted valuations (FDV) may limit upside—even after major effort.
✅ Advantages for Protocols
- Low-Cost User Acquisition: Points serve as flexible marketing tools without immediate token dilution.
- Behavioral Shaping: Protocols can incentivize desired actions like long-term staking or social sharing.
- Controlled Launch Timing: Teams retain full control over when—and if—to launch tokens.
❌ Drawbacks for Protocols
- Post-Airdrop Churn: Many users leave after claiming rewards (“pump and dump”).
- Community Backlash: Unfair distributions damage trust and reputation (e.g., Renzo, Friend.tech).
- Sustainability Questions: Growth fueled by speculation may not translate into lasting utility.
Frequently Asked Questions (FAQ)
Q: Are points farming rewards guaranteed?
A: No. Points represent speculative expectations—not contractual rights. Projects may change rules or cancel airdrops at any time.
Q: Can I sell my points before the token launch?
A: Yes, through secondary markets like Whales Market or Hyperliquid. However, these platforms carry counterparty risk and lack regulation.
Q: How do I maximize my points farming ROI?
A: Focus on protocols with strong fundamentals, low entry costs, and transparent point accrual logic. Diversify across multiple farms to reduce single-point failure risk.
Q: Is points farming just another form of speculation?
A: Largely yes. While some projects use it to build real communities, many users treat it as short-term yield chasing—similar to liquidity mining during DeFi Summer.
Q: What happens after the airdrop?
A: Activity often declines sharply. Sustainable protocols must introduce new utilities or revenue models to retain users beyond incentives.
👉 Learn strategies for identifying high-potential Web3 projects before their token launches.
The Future of Points in Web3
Points farming is still in its infancy. As the ecosystem matures, we may see:
- Tiered loyalty programs, where long-term participants earn enhanced benefits.
- Points as governance tools, granting voting power or feature unlocks.
- Integration with real-world rewards, akin to airline miles or credit card points.
But long-term success hinges on trust and value creation. Protocols must deliver actual utility—not just promises—to maintain user loyalty. Otherwise, points farming risks becoming just another cycle of hype, exploitation, and abandonment.
Ultimately, points are more than just numbers—they’re signals of engagement, commitment, and shared belief in a protocol’s future. When aligned with genuine innovation, they can fuel sustainable growth. When misused, they erode trust and stunt ecosystem development.
As Web3 continues to experiment with incentive design, one thing remains clear: the most successful protocols won’t just reward activity—they’ll inspire lasting participation.
Core Keywords:
points farming, Web3 incentives, token airdrop, blockchain rewards, Eigenlayer, Friend.tech, DeFi growth strategy, user retention