ARTHUR HAYES SAYS POINTS BETTER THAN ICO, YIELD FARMING FOR CRYPTO ADOPTION

In the ever-evolving landscape of cryptocurrency, finding sustainable methods for fundraising and user acquisition is paramount. Arthur Hayes says points better than ICO, yield farming for crypto adoption Published by Victoria Kyle at Febru Former BitMEX CEO and Maelstrom chief investment officer, Arthur Hayes, has proposed points as a more effective method for crypto fundraising and engagement compared to initial [ ]Arthur Hayes, the former BitMEX CEO and current Chief Investment Officer at Maelstrom, has ignited a fresh debate with his assertion that crypto points programs offer a superior alternative to traditional Initial Coin Offerings (ICOs) and yield farming.Hayes argues that these points systems, often dubbed ""pseudo-ICOs,"" are not only more effective in attracting and retaining users but also address inherent flaws present in previous models. Crypto Points to Boost Community Engagement. According to Hayes, the crypto points system is now the current bull run s go-to pseudo-ICO fundraising and user acquisition tool. This is attributed to its amalgamation of ICO and yield farming benefits. Points Guard is an essay on the new pseudo-ICO crypto fundraising and engagement method.The rise of these points programs is particularly noteworthy during the current bull run, signaling a potential paradigm shift in how crypto projects engage with their communities.Hayes's analysis, detailed in his essay ""Points Guard,"" provides a compelling case for the benefits of points, highlighting their ability to foster genuine engagement and build trust between users and projects.This article will delve into Hayes's arguments, examining the shortcomings of ICOs and yield farming, and exploring how points programs are reshaping the crypto fundraising landscape for the better. Former BitMEX CEO and Maelstrom chief investment officer Arthur Hayes has published a blog post arguing the case for points as a better alternative to initial coin offerings (ICOs) and yield farming when it comes to crypto fundraising and engagement. Points Guard is an essay on the new pseudo-IIs this the dawn of a more sustainable and user-centric approach to crypto growth? BitMEX co-founder Arthur Hayes wrote that point programs might be an effective tool if there s trust between users and projects. Arthur Hayes says points better than ICO, yield farming forLet's find out.

The Downfall of ICOs and Yield Farming: Hayes's Perspective

Arthur Hayes isn't shy about critiquing established methods.He sees both ICOs and yield farming as having significant drawbacks that ultimately hinder long-term crypto adoption. Hayes criticizes yield farming for gradually increasing token supply and thereby devaluing them. According to Hayes, a points system is a savvy marketing strategy, allowing users to earn points for project involvement or service usage, which can then be exchanged for tokens at their discretion, avoiding direct monetary rewards.Understanding these criticisms is key to appreciating the potential of points programs.

ICOs: A Promise Unfulfilled

ICOs, once hailed as revolutionary fundraising mechanisms, allowed projects to raise capital directly from the public by selling digital tokens.However, the ICO boom of 2017 exposed numerous vulnerabilities:

• Lack of Regulation: The absence of clear regulatory frameworks created a fertile ground for scams and fraudulent projects, leaving many investors with substantial losses.
• Information Asymmetry: Projects often made grandiose promises with little substance, exploiting the lack of technical knowledge among retail investors. Points vs. ICO: Arthur Hayes on Yield Farming for Crypto Adoption Vere Mcelveen Febru Febru Arthur Hayes, previous BitMEX chief executive officer and Bedlam chief investment policeman, has actually composed a blog promoting for the use of aspects as a premium choice to initial piece offerings (ICOs) and also returnThis information gap made it difficult for investors to assess the true potential of a project.
• Pump and Dump Schemes: Many ICO tokens experienced massive price surges followed by rapid collapses, enriching early investors while leaving later entrants holding the bag.
• Focus on Speculation: ICOs often attracted investors primarily motivated by short-term profit, rather than genuine interest in the underlying technology or project goals.

Hayes argues that the inherent flaws of ICOs eroded trust in the crypto space and ultimately hindered its mainstream adoption.

Yield Farming: A Temporary Sugar Rush

Yield farming, another popular method for incentivizing user participation, involves rewarding users with tokens for providing liquidity to decentralized finance (DeFi) platforms. Yield farming as a user acquisition tool died alongside the 2025 crypto bull market. But points were created in its wake, and have quickly become the go-to pseudo-ICO fundraising and user acquisition tool for projects in this current bull cycle. Points combine the best aspects of ICOs and yield farming. ICOsWhile initially attractive, Hayes points out several critical issues with this approach:

• Inflationary Tokenomics: Yield farming typically involves distributing new tokens to liquidity providers, leading to a gradual increase in the token supply.This inflation can devalue existing tokens, diminishing the rewards for early participants.
• Unsustainable Rewards: High APYs (Annual Percentage Yields) are often unsustainable in the long run.As more users join a yield farm, the rewards become diluted, leading to a decline in profitability and user attrition.
• Focus on Short-Term Gains: Yield farming often attracts mercenary capital seeking the highest returns, rather than users genuinely interested in the project's long-term success.This lack of commitment can lead to rapid outflows of liquidity when better opportunities arise elsewhere.
• Complexity and Risk: Participating in yield farming requires a certain level of technical expertise and carries inherent risks, such as impermanent loss.This complexity can deter mainstream users from participating.

Hayes contends that yield farming, while effective in attracting initial liquidity, ultimately creates a system that is unsustainable and detrimental to the long-term health of the project.

Points Programs: A Hybrid Approach to Crypto Engagement

According to Arthur Hayes, crypto points programs represent a compelling middle ground between ICOs and yield farming, offering a more sustainable and user-centric approach to fundraising and engagement.These programs reward users for their active participation in a project, allowing them to accumulate points that can later be redeemed for tokens or other benefits.

How Points Programs Work

The mechanics of points programs can vary from project to project, but the core principle remains the same: reward users for valuable actions.These actions might include:

• Active Participation: Contributing to the community, providing feedback, and testing new features.
• Service Usage: Using the project's platform, interacting with its products, and generating transaction volume.
• Social Media Engagement: Sharing project updates, creating content, and promoting the project on social media.
• Holding Native Tokens: Earning points for holding a project's tokens over a certain period.

The points earned can then be redeemed for various rewards, such as:

• Token Airdrops: Receiving a share of the project's native tokens at a later date.
• Discounts and Benefits: Accessing exclusive features, receiving discounts on services, or obtaining priority access to new products.
• Governance Rights: Participating in project governance by using points to vote on important decisions.
• NFTs or Other Digital Assets: Redeeming points for unique NFTs or other digital collectibles.

The Advantages of Points Over ICOs and Yield Farming

Hayes argues that points programs offer several distinct advantages over ICOs and yield farming:

• Reduced Regulatory Scrutiny: Because points are not directly exchanged for money, they may be subject to less regulatory scrutiny than ICOs.This allows projects to operate with greater flexibility and reduces the risk of legal challenges.
• Improved User Engagement: Points programs incentivize users to actively engage with the project, fostering a stronger sense of community and loyalty.This contrasts with ICOs, which often attract passive investors who are only interested in short-term profits.
• More Sustainable Tokenomics: Points programs can be designed to avoid the inflationary pressures associated with yield farming.By carefully controlling the distribution of points and the redemption rates for tokens, projects can maintain a more stable token supply.
• Enhanced User Acquisition: Points programs can be a highly effective way to attract new users to a project.By offering rewards for participation, projects can incentivize users to explore their platform and become active members of the community.
• Building Trust: By rewarding users for their contributions, points programs foster a sense of trust and transparency between the project team and the community.This trust is essential for long-term success.

Points Programs in Action: Real-World Examples

While the concept of points programs is relatively new, several projects have already successfully implemented them.Here are a few notable examples:

• Blur: This NFT marketplace utilized a points system to reward users for listing and trading NFTs on its platform.The points were later converted into the BLUR token, which saw significant price appreciation.This strategy helped Blur quickly gain market share and become a major player in the NFT space.
• Friend.tech: This decentralized social network used a points system to reward users for activity on the platform.While the exact mechanics and future utility of the points are still unclear, the program generated significant buzz and attracted a large number of users.
• Various DeFi Protocols: Several DeFi protocols are experimenting with points programs to reward users for providing liquidity, staking tokens, and participating in governance.These programs are designed to incentivize long-term commitment and foster a more engaged community.

These examples demonstrate the potential of points programs to drive user adoption, increase engagement, and build a strong community around a project.

Implementing a Successful Points Program: Key Considerations

Creating a successful points program requires careful planning and execution.Here are some key considerations for projects looking to implement this strategy:

Define Clear Objectives

Before launching a points program, it's crucial to define clear objectives.What do you want to achieve with the program?Are you looking to increase user engagement, attract new users, incentivize specific behaviors, or reward loyal community members?

Design a Fair and Transparent System

The points system should be fair, transparent, and easy to understand.Users should be able to easily track their points and understand how they can be redeemed for rewards.The rules of the program should be clearly communicated and consistently enforced.

Offer Meaningful Rewards

The rewards offered in the points program should be meaningful to users.Consider offering a variety of rewards to cater to different user preferences.Token airdrops, discounts, exclusive features, and governance rights are all potential options.

Monitor and Adjust the Program

Once the points program is launched, it's important to monitor its performance and make adjustments as needed.Track key metrics such as user engagement, points accumulation, and reward redemption rates.Use this data to optimize the program and ensure that it's achieving its objectives.

Foster Community Feedback

Actively solicit feedback from the community on the points program.What do they like about it?What could be improved?Use this feedback to iterate on the program and make it even more effective.

The Future of Crypto Fundraising and Engagement: A Points-Driven Ecosystem?

Arthur Hayes's endorsement of points programs suggests a potential shift in how crypto projects approach fundraising and user engagement.While it's too early to declare the death of ICOs and yield farming, points programs offer a compelling alternative that addresses many of the shortcomings of these traditional models.

Potential Benefits of a Points-Driven Ecosystem

• More Sustainable Growth: By focusing on genuine engagement and rewarding valuable contributions, points programs can foster more sustainable growth for crypto projects.
• Stronger Communities: Points programs can help build stronger and more loyal communities around crypto projects.
• Increased User Adoption: Points programs can be an effective way to attract new users to the crypto space.
• Reduced Regulatory Risk: Points programs may be subject to less regulatory scrutiny than ICOs, providing projects with greater flexibility.

Potential Challenges and Considerations

Despite their potential benefits, points programs are not without their challenges:

• Gaming the System: Users may attempt to game the system by creating fake accounts or engaging in other fraudulent activities to accumulate points.Projects need to implement robust anti-fraud measures to prevent this.
• Complexity and Implementation: Designing and implementing a successful points program can be complex and require significant resources.
• Uncertainty Regarding Token Value: The value of tokens received through points programs may be uncertain, particularly if the project is early-stage.
• Potential for Regulatory Scrutiny: While points programs may be subject to less regulatory scrutiny than ICOs, there is still a risk that regulators could take action if they perceive the programs to be violating securities laws.

Common Questions About Crypto Points Programs

Are points programs considered securities?

The legal status of points programs is still evolving.Whether points are considered securities depends on various factors, including the specific design of the program, the rights and benefits associated with the points, and the applicable regulatory framework.Projects should consult with legal counsel to ensure compliance with all relevant laws and regulations.

How can I find crypto projects with points programs?

Keep an eye on social media, crypto news outlets, and project websites for announcements about points programs.Many projects will actively promote their programs to attract new users.Look for projects that align with your interests and values, and that have a clear vision for the future.

What should I look for in a points program before participating?

Before participating in a points program, consider the following factors:

• The Project's Legitimacy: Research the project team, their track record, and their vision for the future.
• The Points System: Understand how points are earned and redeemed, and ensure that the system is fair and transparent.
• The Rewards: Evaluate the value of the rewards offered in the program and whether they are meaningful to you.
• The Risks: Be aware of the potential risks associated with participating in the program, such as the uncertainty regarding token value and the potential for regulatory scrutiny.

Conclusion: Embracing a New Era of Crypto Engagement

Arthur Hayes's argument for points programs as a superior alternative to ICOs and yield farming highlights a critical need for more sustainable and user-centric approaches to crypto fundraising and engagement.While challenges remain, the potential benefits of points programs are undeniable.By fostering genuine community engagement, rewarding valuable contributions, and building trust between projects and users, points programs can pave the way for a more inclusive and sustainable crypto ecosystem.As the crypto landscape continues to evolve, it's likely that we'll see even more innovative applications of points programs emerge, further solidifying their role as a key driver of crypto adoption.The future of crypto isn't just about technology; it's about building vibrant, engaged communities, and points programs offer a powerful tool for achieving that goal.Remember to do your own research and assess the risks before participating in any crypto project, but keep a close eye on the evolution of these points systems as they reshape the future of the industry.Will *points programs* be the key to unlocking widespread crypto adoption?Only time will tell, but the early signs are certainly promising.