The crypto rewards program is facing renewed criticism, as users begin to question whether the future potential of rewards still justifies the time, fees, and capital they’ve invested in the project.
- Nairolf believes that opaque reward mechanisms and delayed distributions undermine trust in cryptocurrency reward programs.
- Critics argue that the project team benefits from user engagement while retaining control over the final rewards.
- KAST is reported to cease earning points on November 30 and introduce non-tradable replacement units.
- The proposed changes include the immediate issuance of tokens, along with prior disclosure of the supply, allocation methods, and transferability conditions.
The anonymous crypto commenter Nairolf sparked this discussion in a post on November 2. He argued that points still help attract early users, build a community, and reward loyalty. The issue is that these benefits depend on participants believing their contributions will ultimately be fairly rewarded.
According to his post, the project has, over the years, "extracted" engagement from users, damaging this belief. He believes that teams today abusing the points system are making this growth tool less effective for other projects.
His remarks prompted sharper responses from other accounts. Coop described the points program as an "anti-signal," stating that projects abandoning their points commitments have made participation less appealing. Minion questioned whether users could reasonably expect these programs to operate in good faith.
The points program allows users to only guess the rewards.
Nairolf pointed out that transparency is the first major weakness. When points have no known value, participants can continuously imagine larger future returns, helping the project attract attention without clearly delivering anything.
He believes that this uncertainty supports growth but also creates expectations that may be difficult to fulfill. Users may continuously accumulate balances without knowing the final token distribution, exchange ratio, or timing of issuance.
Earlier research has also documented similar concerns. In a July 2024 report, Galaxy researcher Christine Kim described projects that issue points before clarifying how, when, or into what rewards those points can be redeemed. The report identified opacity as a core flaw of this model.
Galaxy distinguishes between points and tokens recorded on the blockchain. In the projects studied, issuers typically control the ledger and determine how balances may be used. Therefore, a visible score does not necessarily mean the holder has rights to a transferable asset.
The report notes that historically, issuing points does not guarantee conversion into tokens or any specific exchange ratio. This distinction helps explain why participants remain uncertain about what they have actually earned, even as their balances continue to grow.
The project team and "farm users" have different desired outcomes.
Nairolf’s second criticism relates to the incentive mechanism. Before the token launch, users may generate trading volume, pay transaction fees, commit capital, and promote the product in anticipation of an upcoming allocation.
The project team will benefit immediately from these activities, while participants receive only points, with the final rewards yet to be determined.
In his view, this would incentivize project teams to extend the pre-token-launch phase, while users desire rewards to arrive as soon as possible. Launching a token introduces a new set of expectations, and developers may prefer to delay such changes.
He wrote: "The longer you wait, the higher the expectations become, and the more trust you undermine."
Crypto.com's June 2024 study also described the same imbalance: projects retain control over the usage of points and the timing of airdrops, while users have limited influence over the final distribution. Researchers warned that disappointing rewards could trigger community backlash.
The report argues that attracting users with points does not equate to creating sustained demand. The project still needs a product that keeps participants engaged even after the incentives end.
KAST shows how the expected rewards change.
The KAST transition plan provides a practical example of shifting rewards from the traditional "points-to-token" model to other forms.
According to reports from DeFi Prime and TokenPost, the payment app will cease earning points on November 30 and convert eligible balances into KAST Pioneer Units in early December. The reports describe these units as non-transferable contractual rights without ownership, voting rights, or guaranteed cash value. Some users will instead receive vouchers.
TokenPost reported that U.S. users are subject to a separate program with different eligibility requirements and timelines. The standard December conversion window does not imply a fixed conversion date for these accounts.
Issuing tokens from day one may allow for earlier definition of rewards.
Nairolf proposed issuing the token from day one, potentially making it non-transferable in the early stages.
According to his vision, the project should disclose the supply, allocation method, how value is delivered to holders, and the product milestones required to achieve transferability before users begin accumulating rewards.
He believes this approach preserves the incentive for early participation while preventing the team from indefinitely delaying an undefined reward.
His scheme still leaves room for speculation about future value. The change is that users will know exactly what they are accumulating and what conditions determine how it can be used. Nairolf says his goal is to preserve the community-building aspect of the loyalty program while replacing open-ended promises with a set of clearly defined terms from the outset.