Building a Web3 Community Incentive System

Even before the advent of the Internet, airlines and luxury hotels used incentive systems to encourage the continued use of their products. As the internet developed, incentive systems became more refined. Currently, common incentive systems in the market can be categorized into level/achievement systems (spiritual incentives), points systems (material incentives), and social systems (emotional incentives).

Incentive systems emphasize a series of "virtuous cycles," and through the stacking of these cycles, they ultimately achieve "long-term drive and impact." This article will explore each of these three incentive systems separately and discuss commonly used nested methods in incentive system design today.

Spiritual Incentive: Level/Achievement System

A level system recognizes users' past behaviors, using different levels to signify honor or authority to continually engage users and increase their level.

What behaviors qualify as effective for raising levels?

When designing a level system, behaviors can be categorized into "transactional behaviors" and "non-transactional behaviors."

Transactional behaviors: Transaction frequency, transaction volume, user asset deposits, and the duration assets are held within the platform—all aim to keep users' funds on the platform for extended periods.

Non-transactional behaviors: Registration, completing account information, daily visits to official project pages, browsing official social media platform accounts, blogs, or posting project-related promotional content on social media platforms, etc.

After defining and classifying effective behaviors, incentivization policies should be integrated into the level system.

Why would users want to advance levels?

Beyond identity recognition, higher levels also come with more privileges. The more detailed the incentive policy, the stronger users' desire to advance levels.

Level incentive systems can start from the following three aspects:

Feature unlocking: Users unlock exclusive features as they reach different levels, experiencing higher-level product services, such as enjoying lower transaction fees.

Personal display: High-level users can have unique identity identifiers, showcasing their uniqueness and meeting their self-expression needs.

Event privileges: Some activities can be restricted to high-level users only, sparking desires to advance levels.

Building a level system requires fixed standards for user upgrades, which can be linked to a points system.

Material Incentive: Points System

The points system is a carrier for incentivizing users and guiding mechanisms. Key features of the points system assign specific values to behaviors aimed at upgrading users, and points have tangible value—they can be exchanged like currency for goods or services, or even currency.

In the level system, operators define valuable interaction behaviors. When linked to the points system, operators assign values based on behavior value, incentivizing users to continually interact.

Besides level advancement, point systems often include a points mall feature, where users can accumulate points to exchange for various benefits. For example, Web3 projects may reward users participating in specific activities with NFTs or whitelist privileges.

Through the points mall (Benefit Shop), operators can set different exchange rules. After accumulating a certain number of points, users can exchange them for rewards. Rewards include but are not limited to:

• Virtual items: Tokens, NFTs, whitelist access, etc.

• Physical goods: Depending on project resources, users can receive electronic products, coupons, etc., directly.

• Exclusive services: High-point users can exchange for priority customer service, dedicated advisor services, or VIP experiences, enjoying higher-quality service support.

• Community privileges: High-point users can exchange for Discord roles, gaining identity recognition and role privileges in the community.

• Participation opportunities: High-point users can exchange for special activities or exclusive experience opportunities hosted by the platform, such as offline gatherings, online seminars, exclusive live streams, etc.

The points mall not only provides immediate rewards to users but also enhances user engagement and loyalty through the diversity and uniqueness of rewards. Operators can maintain user freshness and enthusiasm by regularly updating and enriching the Points Mall with goods and services. They can also flexibly adjust exchange rules and reward content based on user behavior and feedback, ensuring fairness and attractiveness of the points system.

Emotional Incentive: Social System

In Web3, products generally have two types of users, such as TaskOn platform users including project parties and retail investors.

Humans have social needs, and there are interactive behaviors within user groups and between different user groups:

• Copy trading mode for transactional projects

• Creation square for social projects

• Like, comment features

• ...

When building incentive systems, emphasis can be placed on users' social needs to sustain users and incentivize user behaviors emotionally.

Gamification Mechanism

In addition to considering incentive systems from spiritual, material, and emotional aspects, gamification mechanisms can also be integrated, making the incentive system more interesting, attractive, and effective. These mechanisms can also be nested with each other, forming a complex and comprehensive incentive system to drive better and influence user behavior.

• Temporality of incentives: Incentives should be time-sensitive. For example, certain rewards or discounts are only valid within specific time frames, or the value of rewards changes with continued user behavior and time. This temporality encourages users to take action within specific time windows, increasing user activity and participation.

• Randomness of incentives: Introducing randomness can increase the fun and attractiveness of incentives. Users do not know what rewards their behavior will bring, and this uncertainty stimulates curiosity and desire for exploration, prompting users to participate more frequently in activities or complete tasks.

• Dynamic variability of incentives: Refers to the incentive system adjusting dynamically based on user behavior and feedback. For example, different levels of rewards or discounts are given based on user activity, contribution, or participation. This dynamic variability ensures that the incentive system always aligns with users' actual needs and expectations, thereby enhancing the effectiveness and long-term impact of the incentive system.

Each incentive method has its advantages, and should not be judged simply as better or worse. Instead, they should be cleverly utilized, coordinated with each other, and complement each other. Incremental incentive strategies not only attract new users but also retain existing users, ultimately creating a product with high user stickiness and loyalty.