'Initial Points Offering' can bring a fresh capital inflow to crypto, IntoTheBlock points out

IntoTheBlock's On-chain Insights suggest that a new capital influx into the crypto market could be on the horizon, facilitated by a groundbreaking mechanism called "Initial Points Offering" (IPO). This innovative approach, similar to traditional Initial Coin Offerings (ICOs) and NFT mints, has the potential to catalyze bull markets by enabling global investment into emerging projects.

The IPO system operates through a points-based model, which has gained traction over the past six months, particularly popularized by protocols like Blur and EigenLayer. Unlike traditional airdrops, where users receive tokens passively, the points system actively rewards users for contributions such as liquidity provision and referrals.

EigenLayer's points program, for example, has seen significant success, accumulating over $7.8 billion before its mainnet launch. Following this accumulation phase, protocols like EigenLayer transition to token issuance through Initial Points Offerings, mirroring the dynamics of ICOs but with a fresh approach.

One key advantage of the points system is its ability to eliminate the need for direct financial investment from users, thus reducing the risk of tokens being classified as securities. Despite some inherent flaws, the points model offers several benefits over previous funding models.

Projects like Ethena are already integrating points mechanisms from their inception, indicating a growing trend towards this innovative approach. However, the sustainability of the current enthusiasm for points systems remains uncertain.

Lucas Outumuro, Head of Research at IntoTheBlock, suggests that historical patterns indicate the potential for IPOs to usher in a new era of capital flow and formation within the crypto market, underscoring the significance of this emerging trend in the industry's evolution.

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