Tokens Replacing Loyalty Points
The concept of “Tokens Replacing Loyalty Points” was first proposed by the TaleX project, and RoamFi is the first project to formally implement this concept.
1. Limitations of Loyalty Points
Traditional consumer incentive systems typically issue loyalty points to attract users and increase retention. However, this model has significant structural flaws:
No distinction between early and late users: Regardless of when users join, the point value remains constant, failing to reward early supporters.
Unlimited issuance, constant devaluation: Points have no cap. Continuous issuance leads to inflation and loss of value.
Cash flow pressure: Users tend to redeem points as quickly as possible to avoid devaluation, which creates liquidity pressure on the business.
This zero-sum dynamic pits users and the business against each other — what benefits one often harms the other — making win-win outcomes nearly impossible.
2. Advantages of Token Incentives
Replacing points with tokens fundamentally transforms the incentive mechanism:
Scarcity and value potential: Tokens have a limited total supply, often following a decreasing issuance model. As the project grows, token value may increase — rewarding early users and long-term holders.
Reduced redemption pressure: Users are more inclined to hold tokens in anticipation of appreciation rather than redeem them immediately, alleviating cash flow stress for the business.
Market-based pricing: Tokens can circulate freely on secondary markets, where prices reflect real-time market sentiment — creating a transparent and efficient feedback mechanism.
As the project grows and the token price appreciates, two outcomes occur simultaneously:
User enthusiasm and consumption rise.
The business gains stronger incentive power.
This synergy establishes a true win-win model between users and the project.
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