We are thrilled to introduce Rumpel, the premier point tokenization protocol. Launching in mid-Sept, we’re backed by industry leaders such as Dragonfly and Variant, and have extensive experience building & launching DeFi protocols, such as Sense Protocol, MakerDAO and Aave.
Rumpel aims to improve liquidity and price discovery for offchain loyalty points, unlocking new opportunities for point holders, traders, airdrop hunters, and point issuers.
Points play a central role in crypto incentives, and with Rumpel, points will become the evergreen gold standard for allocating rewards for the years to come.
The Power of Points in Crypto
Points have emerged as the golden thread in growth strategies across the crypto landscape. They serve as a crucial mechanism to reward early adopters, incentivize specific behaviors, and foster loyal communities. Oftentimes, Web3 points convert into the free money that drives user engagement.
Points offer significant unique advantages for Web3 projects, including day-one incentives, enhanced agility, and optimized token generation event (TGE) timing. Instead of obfuscating airdrop criteria, teams can leverage pointenomics to “line up” user participation in specific ways, prime new markets, and predictably expand across the ecosystem. These benefits make points an indispensable tool for rapid growth and user engagement.
The effectiveness of point programs in go-to-market (GTM) strategies is evident from notable examples:
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Blur surpassed Opensea in NFT marketshare just four months post-launch
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Ethena’s USDe proliferated DeFi and became the fastest stablecoin to reach $3 billion market cap
Both projects, while driven by strong teams & tailwinds, leveraged points to prime their marketplaces and meticulously guide user growth.
As a result, web3 projects are now adopting point programs at an accelerated pace, with 50% of recent airdrops having already been allocated to point holders.
Challenges with Current Point Systems
Despite their benefits, the current state of points is leaving multiple stakeholders frustrated, including point farmers, point investors, and point-issuing projects. Let’s go through each perspective.
Point farmers are feeling farmed
Caused by a cooled Alt-token market, underwhelming allocations, surprise airdrop criteria, point farmer’s returns are far below users’ expectations of early 2024.
When reality undershoots expectations, many users feel "farmed", especially as no strong alternative exists. Some may even elicit strong public emotional reactions from perceived user betrayal. All press is good press, but teams generally want positive reactions to their airdrops. They want to be viewed as trustworthy, generous, and collaborative to their long-term believers.
Point investors can’t get upside
At the same time, point investors, usually retail users, have struggled to "catch up" on point stacking, when compared to blue whale behemoths that suck up most point streams.
As Cobie says, all the upside is being captured in private markets, so point programs are the last avenue for getting exposure before a project’s TGE & future airdrops.
Still, 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.
Point issuers can’t influence behavior
These problems are leading to user apathy among both groups, hindering project growth and diminishing the impact of point programs.
Projects have every incentive to use points. The largest benefit of points is that it allows projects to “borrow” liquidity from their future token market to fuel incentives today. It’s a powerful mechanism for attracting depositors, but it’s only as strong as their users’ perception of their points’ value.
If airdrop timelines are delayed due to a cooled alt-token market, and/or if a few “bad” actors abuse user trust, then the perceived value of points will not elicit a kinetic reaction from users. Projects need users to want their points — it’s what gives points their influence power.
As new programs come online each week, it can be even more difficult to lure users to competing point farms. How does a user quickly compare complex programs?
In summary, the problems are:
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Point farmers are feeling farmed. They have the short end of the stick in both yield payout and flexibility, and there’s no better yield opportunity outside lending & delta-neutral stablecoins, such as sUSDe and deUSD.
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Point investors are feeling left out. They’ve missed the opportunity to get exposure to some of the hottest projects.
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Point issuers are losing their ability to influence behavior with points, and they’re at risk of bad press since some users can’t de-risk before an airdrop
While these problems can be solved by resetting user expectations & a stronger alt-token market, we believe there’s a better solution.
A Secondary marketplace
The industry needs a crypto-native, secondary marketplace for points. Such a market could simultaneously solve all stakeholder problems:
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Point farmers can sell points and de-risk before an uncertain airdrop
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Point investors can buy points and turbo-stack to their preferred exposure
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Point issuers can continue issuing points and lean on secondary markets to demonstrate the real value of their rewards program
However, we discovered many stakeholders were blocked out from these benefits, due to the limitations levied by existing point trading markets.
Our co-founders, Kenton & Josh, saw these constraints first-hand when they tried to sell their Ethena Shards on Whales Market, one of the first point trading marketplaces. Lured in by a competitive market price, they excitedly rushed to the Whales app, ready to lock in their profits.
They arrived at the “sell page” when, all of a sudden,… their hopes were shattered. Unbeknownst to them, Whales Market imposes collateral requirements on sellers! They remembered thinking:
“Wait, we have to lock up thousands of dollars just to agree on a price today? and then we have to come back after the airdrop to deliver the airdrop? else our collateral is gone?”
This feels absurd! Why can’t we just sell the points?
Instead of fronting valuable capital, they left the dapp, but decided to jump into the design space of points marketplaces.
While we’re excited about market diversity, and respect the builders in this space, we see a few structural limitations that will prevent the onchain points ecosystem from flourishing:
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Whales & Bubbly requires additional collateral from the seller & caps the maximum payout for point buyers
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Fixed-rate protocols, such as Pendle, Spectra, and Hourglass, don’t allow YT holders to resell earned points. Moreover, their point sellers’ principal is subject to liquidity if they want to withdraw early.
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Pichi & Agent markets aren't designed to trade singular point exposures, limiting user preference and flexibility
We weren’t satisfied with the solutions, so we decided to jump into the action and see where we could contribute. Time to unveil what the team has been building:
Rumpel, the premier point tokenization protocol
Rumpel addresses these constraints allowing users to wrap each earned point into a Rumpel Point Token via a personal Rumpel Wallet, a specialized Safe multisig.
As points accrue, the Rumpel Oracle validates offchain point balances and updates user allowances for Point Token minting. When/if the project announces an airdrop, point tokens can be redeemed for their underlying airdrop share, including any future vesting allotments.
Once tokenized and onchain, Point Tokens benefit all stakeholders. Rumpel 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.
Moreover, speculative forces in the point token market will give projects a marketing boost, increasing user engagement and core metrics.
Future Possibilities with Rumpel
While Rumpel is focused on bringing liquidity to points, we can imagine a world where Rumpel’s Wallet & Oracle infra is used to spin other offchain value into gold.
We are excited to explore these possibilities with our community and partners, paving the way for innovative applications beyond the current scope.
Built & Backed by Industry Leading Builders and Investors
Rumpel Labs is founded by Kenton Prescott & Josh Levine, and they have a team with experience across MakerDAO, Aave, SpaceX, and EY.
We launched Sense Protocol, a DeFi Fixed Income Protocol from 2021-2023, and we’ve grown deeply familiar with pointenomics, strongly believing in its continued role in crypto incentives.
We understand what it takes to build through bears and launch in bulls.
Prominent investors, including Dragonfly, UDHC, Bain Capital Ventures, Variant, Nascent, Robot, Collab currency, LAO, Buckley ventures, Bodhi Ventures, and more back Rumpel. Additional investors include industry builders & figures like Ryan S. Adams, Freddie Farmer, Tom Walton-Pocock , Jai Bhavnani, Noah Zinsmeister, DeFi Dad, Mr. BlockTV, Alan Curtis, Brandon Curtis, Caleb Tebbe, and Mike McKain.
"We're pleased to support Rumpel as they work on enhancing the liquidity and transparency of point programs. Their approach to creating a secondary marketplace for points addresses a clear need in the market, and we believe it has the potential to benefit point holders and issuers alike.” Tom Schmidt General Partner
What’s Next for Rumpel?
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August 26th (NOW): Our public Sherlock Audit contest kicks off, marking our third audit
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Next Week: Release of website, tech docs and info on Rumpel rewards
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Early September: Rumpel Early Access opens, offering select users the opportunity to engage with our platform ahead of the general release.
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Mid-September: Mainnet Launch with partner point Issuers
Early Access and Ethereum L1 Launch
Rumpel Early Access is invite-only, rewarding users with Rumpel Straw, our native point 🌾, in proportion to their usage.
At launch, Rumpel is excited to support Ethena, Symbiotic, Zircuit, and Karak in bringing liquidity to their latest point programs. Early Access users can tokenize points, trade them on Uniswap v3, and earn Rumpel Straw 🌾.
Here’s a quick look at each project:
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Ethena is a synthetic dollar with internet-native yield fully collateralized by crypto assets and offsetting derivative hedge positions.
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Symbiotic is a customizable and immutable shared security protocol designed to help developers innovate faster and safer. Decentralization should not be hard nor optional.
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Zircuit is a cutting-edge zk rollup with AI-enabled security, designed to enhance transaction safety and efficiency on Layer 2 networks. It is quickly becoming home to a large number of LRTs and other DeFi protocols, offering a seamless environment for dapp deployment.
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And finally, Karak is a universal restaking layer that boosts cryptoeconomic security by enabling users to repurpose staked assets across Ethereum and other networks. It provides a marketplace for developers to incentivize validators with non-dilutive rewards, ensuring scalable security.
Upcoming Integrations
While building Rumpel, we’ve been busy spreading awareness among fellow builders and have a couple of integrations lined up. Our first distribution partner to announce is Rainmaker, the airdrop-hunting smart wallet.
Rainmaker supports 10+ point programs, including Ethena, Symbiotic, Zircuit, and Karak, so we’re excited to bring point tokens & airdrop-hunting opportunities to their users.
More details, and alpha, to follow.
How to join the Rumpel Tale
Follow us for important updates on the Rumpel Straw Program and join us on this exciting journey to redefine the future of point tokenization.