The encrypted points program is facing a new round of criticism, with users beginning to question whether the future rewards will still be sufficient to offset the time, fees, and capital they have invested in the project.
- Nairolf believes that opaque reward mechanisms and delayed distribution have undermined people's trust in crypto points programs.
- Critics argue that the project owners benefit from user activity while retaining control over the final rewards.
- It is reported that KAST plans to stop point acquisition on November 30 and introduce an non-tradable alternative unit.
- The proposed changes include the immediate issuance of tokens, as well as the prior disclosure of the supply volume, distribution method, and conditions for transferability.
Anonymous encrypted commentator Nairolf initiated this discussion in a post on November 2nd. He believes that points are still useful for attracting early users, building a community, and rewarding loyalty. The issue is that these benefits depend on participants believing that their contributions will ultimately be fairly rewarded.
According to his post, the project has been "sucking the vitality" out of users over the years, which has damaged this belief. He believes that teams that abuse the points system today are making this growth tool less effective for other projects.
His remarks drew even sharper responses from other accounts. Coop described the points system as a kind of “reverse signal ( anti signal )” and stated that projects that abandon their points promises no longer attract participants. Minion questioned whether users can truly expect these systems to operate in an honest manner.
The points system forces users to guess the rewards.
Nairolf points out that transparency is the first major weakness. When points have no known value, participants can continue to imagine greater rewards in the future, which helps the project attract attention without a clear deliverable.
He believes that this uncertainty supports growth, but it also creates expectations that may be difficult to fulfill. Users may continue to accumulate balances without knowing the final token distribution, exchange ratios, or distribution times.
Earlier studies have also recorded similar concerns. Researcher Galaxy described such projects in a report in July 2024: they first distribute points, and only later explain how, when, and into what rewards these points can be exchanged. The report listed opacity as a core flaw of this model.
Galaxy Distinguishes between points and tokens recorded on the blockchain. In the projects they study, the issuers typically control the accounts and decide how the balances can be used. Therefore, a visible score does not necessarily mean that the holder has rights to the transferable assets.
The report indicates that historically, the issuance of points did not guarantee that they could necessarily be exchanged for tokens, nor did it guarantee any specific exchange ratio. This distinction helps to explain why, even as balances continue to increase, participants remain uncertain about what they have actually earned.
The project team and the "farm users" have different desired outcomes.
The second point of criticism regarding Nairolf is related to the incentive mechanism. Before the token is launched, users can create trading volume, pay transaction fees, invest capital, and promote the product in anticipation of the subsequent distribution.
The project parties will benefit immediately from these activities, while participants only receive points, and the final rewards are still undecided.
In his view, this will motivate the project team to extend the period before the tokens are launched, while users hope that the rewards will arrive as soon as possible. The launch of tokens brings a set of new expectations, whereas developers may prefer to postpone such changes.
He wrote, "The longer you delay, the higher the expectations become, and the more trust you destroy in the process."
Crypto.com also described the same imbalance in their research in June 2024: the project retained control over the use of points and the timing of airdrops, while users had limited influence over the final distribution. Researchers warned that disappointing rewards could trigger a backlash from the community.
The report argues that attracting users through points does not equate to creating a lasting demand. The project still needs a product to keep participants engaged even after the incentives end.
KAST demonstrates how the expected rewards change
KAST The planned transition provides a real-world example for rewarding the shift from the traditional "points-to-coin" approach to other forms.
According to reports from DeFi Prime and TokenPost, this payment app will cease point acquisition on November 30th, and at the beginning of December, eligible balances will be converted into KAST Pioneer Units. The reports describe these units as non-tradable contractual rights that do not carry ownership, voting rights, or any guaranteed cash value. Some users will instead receive consumer vouchers.
TokenPost reports that American users are subject to a separate plan with different eligibility requirements and timing arrangements. The standard December conversion window does not mean that these accounts have a fixed conversion date.
Issuing tokens from the very first day might allow for the definition of rewards even earlier.
Nairolf suggests issuing tokens from the very first day, and possibly setting them as non-transferable in the initial phase.
According to his vision, the project should disclose the supply volume, distribution method, how value will be transferred to holders, and the product milestones required to achieve transferability before users begin to accumulate rewards.
He believes that this approach can not only retain the incentives for those who participated early on but also avoid the team indefinitely postponing an undefined reward.
His proposal still leaves room for speculation regarding future value. The change lies in the fact that users will be aware of what they are accumulating, as well as which conditions determine how it will be used. Nairolf states that his goal is to preserve the community-building role of the points system, while replacing open-ended commitments with a set of terms that were determined from the beginning.
