Point System

Definition ∞ A point system in cryptocurrency typically refers to a mechanism that awards users non-transferable credits for specific activities or contributions within a protocol or platform. These points are often used to incentivize participation, test new features, or gauge community engagement without conferring immediate monetary value. They can serve as a precursor to future token distributions, granting early users preferential access or rewards. The design of a point system aims to foster user loyalty and drive adoption within a digital ecosystem.
Context ∞ Point systems are increasingly employed by new cryptocurrency projects to build communities and prepare for future token launches, sparking considerable discussion among early adopters. The potential for points to convert into valuable tokens drives user engagement, yet also raises questions about their true utility and eventual financial impact. News frequently covers projects introducing or adjusting their point systems, highlighting their strategic role in growth.