Points programs award users non-transferable points for completing on-chain or off-chain actions during a pre-TGE period, with the implicit or explicit promise that points will convert to token allocations at launch. Users earn points by performing protocol-desired behaviors, depositing liquidity, bridging assets, making transactions, referring others, or maintaining activity streaks. Points accumulate over a defined season (typically 3-6 months), then a percentage of total token supply is allocated pro-rata based on points earned at or around TGE.

Benefits: Points programs generate real usage metrics and TVL before launch, which strengthens exchange listing applications and investor narratives. They allow behavioral targeting (weighting points toward actions the protocol needs most), impose Sybil costs through sustained multi-month activity requirements, and give the team flexibility over final conversion rates based on actual participation.

Risks: The engagement is often mercenary, TVL and activity generated by points frequently disappear the day after the airdrop. Sophisticated farmers running hundreds of scripted wallets can capture disproportionate allocations without robust Sybil detection. Because conversion formulas are typically undisclosed until TGE, participants operate on speculation, and if the final formula feels arbitrary, community sentiment can flip from enthusiastic to hostile overnight. There is also regulatory ambiguity when points programs strongly imply future token value.

The key design principles: Be explicit about what points do and don't guarantee, publish the behaviors and their relative weights, implement Sybil filtering, and set aside a specific disclosed percentage of supply for the program. Most importantly, evaluate whether the engagement you're generating is genuine product usage or purely extractive farming, if it's the latter, the program is inflating vanity metrics at the cost of post-TGE sell pressure.