Points Farming

Points farming is an incentivization strategy used by decentralized applications to encourage early user participation and liquidity provisioning by awarding off-chain points. Users interact with a protocol by depositing assets, executing trades, or referring new participants to accumulate these digital tallies. Unlike traditional cryptocurrency tokens, points do not possess immediate monetary value and are typically stored on centralized databases rather than a blockchain ledger. Developers utilize this system to bootstrap network activity and measure a user's proportional contribution to the ecosystem before officially launching a native token. Speculators actively engage in this practice with the expectation that accumulated points will eventually be converted into valuable tokens during a future airdrop event.