Rumpel Labs will launch a new decentralized finance (DeFi) protocol in September to enable users to tokenize and trade airdrop points, according to an Aug. 26 announcement.
Backed by venture capital firms including Dragonfly and Variant, Rumpel “aims to improve liquidity and price discovery for offchain loyalty points, unlocking new opportunities for point holders, traders, airdrop hunters, and point issuers,” it said.
Rumpel joins the ranks of other newly launched protocols — such as Nudge — seeking to remedy problems with existing methods of attracting and incentivizing users in Web3. Nudge is building a two-sided marketplace where protocols pay users incentives to redirect onchain assets, liquidity and engagement.
Rumpel seeks to create a market for tokenized airdrop points. Source: Rumpel
Related: Airdrop token prices are crashing — Does Web3 need a new model?
The existing airdrop model is plagued by token underperformance and contention over arbitrary payouts. As a result of “underwhelming allocations [and] surprise airdrop criteria, point farmer’s returns are far below users’ expectations of early 2024,” according to Rumpel.
“We’ve spoken to many users who feel they’re ‘late to a points program’, ‘aren’t comfortable with exposing their capital’ to excessive smart contract risks, or ‘don’t want to jump through all the hoops’ of getting extra allocation before an airdrop,” Rumpel said.
According to a July X post by crypto researcher Aylo, the pseudonymous founder of Alpha Please, 23 of the 31 tokens distributed in sizable airdrops have lost value since their first day of listing, sometimes severely. Excluding memecoins, only two airdrop tokens — or around 6% of the total — outperformed Bitcoin (BTC) over a comparable timeframe.
“I absolutely think we have reached peak airdrop,” Jonathan Joseph, co-founder of real-world asset platform SmartFunds, told Cointelegraph.
“We need constructive models that get liquidity into new protocols in a way that adds value to all stakeholders involved,” said Joseph.
Rumpel seeks to address the myriad constraints facing airdrops by “allowing users to wrap each earned point into a Rumpel Point Token” via a specialized wallet. This “allows point farmers to sell points, point investors to buy points, and point issuers to continue issuing points with greater transparency around their tangible value,” according to Rumpel.
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