Rumpel Labs will be launching a new decentralized finance (DeFi) protocol in September that will allow users to tokenize and trade airdrop points, the company announced on August 26.
Backed by venture capital firms including Dragonfly and Variant, Rumpel said it aims to “improve liquidity and price discovery for off-chain loyalty points, and provide new opportunities for point holders, traders, airdrop hunters, and point issuers.”
Rumpel joins other newly launched protocols like Nudge that aim to solve the problems of existing methods of attracting and incentivizing users on Web3. Nudge is building a two-sided marketplace where protocols pay users with incentives to redirect on-chain assets, liquidity, and participation.
Rumpel wants to create a market for tokenized airdrop points. Source: Rumpel
relevant: Airdrop token prices are plummeting. Does Web3 need a new model?
Existing airdrop models suffer from competition for token yields and arbitrary payouts. According to Rumpel, “As a result of the poor allocation (and) surprise airdrop criteria, point farmer yields are significantly lower than users’ expectations in early 2024.”
“We’ve talked to users who feel like they’re ‘late to the points program,’ who feel ‘uncomfortable exposing capital to excessive smart contract risk,’ or who feel like they ‘don’t want to jump through all the hoops’ to get additional allocations before the airdrop,” Rumpel said.
According to a July post on X by Aylo, a crypto researcher and pseudonymous founder of Alpha Please, 23 of the 31 tokens distributed in sizable airdrops have seen their value decline since their first day of trading, sometimes dramatically. Excluding Mimecoin, only two airdrop tokens (about 6% of the total) have outperformed Bitcoin (BTC) over a similar period.
“I think we’ve definitely reached the peak of airdrops,” Jonathan Joseph, co-founder of real-world asset platform SmartFunds, told Cointelegraph.
“We need a constructive model that provides liquidity to new protocols in a way that adds value to all stakeholders,” Joseph said.
Rumpel seeks to address many of the limitations faced by airdrops by “allowing users to: Pack Each point earned is converted into a Rumpel Point Token via a specialized wallet. This, Rumpel says, “allows point farmers to sell points, point investors to buy points, and point issuers to continue issuing points with increased transparency into the tangible value.”
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