Crypto Startup Backed by Likes of Dragonfly Aims to Create Market to Trade Airdrop-Related Points

As a seasoned researcher with a background in blockchain development, particularly with my time spent honing my skills at MakerDAO, I find Rumpel Labs’ emergence from stealth and the backing it has received from esteemed VCs like Dragonfly and Variant to be an intriguing development. The concept of tokenizing loyalty points through DeFi and Web3 projects is a promising one, especially considering the impact we’ve seen with airdrops in the crypto space.

Rumpel Labs, a new company specializing in creating tokenization frameworks for loyalty rewards widely used in DeFi and Web3 initiatives, has come out of hiding with financial support from notable investors within the venture capital sector, including Dragonfly and Variant.

Dishing out loyalty points to incentivize user behavior and reward early adopters, often with a promise of airdropped tokens, has become a go-to strategy in the crypto space in recent years. Close to 50% of recent airdrops were distributed to point holders, with notable examples of the power of points programs demonstrated by the rapid proliferation of projects like NFT marketplace Blur, or Ethena’s USDe stablecoin.

From my perspective as an analyst, when I talk about airdrops in the context of cryptocurrencies, I’m referring to the practice of distributing free tokens or coins to individuals involved in a specific blockchain network. This tactic is commonly employed by crypto companies to motivate users to interact with the project, attract fresh participants, and foster increased community involvement.

According to Rumpel Labs CEO Kenton Prescott, who was previously a developer for MakerDAO, while many initiatives have indeed profited from the rapid expansion spurred by points programs, there have been concerns about broken promises and users receiving airdrops and rewards significantly lower than anticipated. Simultaneously, there are individuals eager to gain more involvement in these projects, but lack the means to do so, as noted by Prescott.

According to Prescott, it’s crucial to establish more sophisticated secondary markets that improve capital efficiency, offer greater liquidity, and enhance price discovery. These new marketplaces should also take note of the lessons learned from past endeavors aimed at trading point exposure.

In an interview, Prescott stated that the root cause of these issues is a lack of capability to efficiently exchange and trade points. He further explained that establishing a secondary marketplace with high capital effectiveness, substantial liquidity, and efficient price determination would concurrently resolve these difficulties.

Rumpel will have its own points program and go live in mid-September.