Stack ‘points chain’ layer-3 aims to bring loyalty points to Base
Stack went to mainnet Monday as a so-called points chain, built as a layer-3 on top of Base.
DeFi projects have lately been incentivizing usage on their platforms through “points,” or participation tallies that determine allocation in a future token airdrop.
Crypto is adjusting to points mania. Users are gaining leveraged exposure to points on Pendle and trading points on Whales Market. DeFi-focused hedge funds are accumulating currently-valueless points on behalf of liquidity providers.
Read more: DeFi ‘points’ farming has reshaped the crypto investment landscape
But these points tend to live off-chain. Backed by fresh funding from investors including Archetype Ventures, Balaji Srinivasan and Farcaster co-founder Dan Romero, Stack hopes to turn points systems into an on-chain primitive. The project was founded by Graeme Boy, who previously co-founded the decentralized publishing platform Mirror.
Stack is intentionally limited in scope. In a Telegram message, Boy said points cannot be natively traded on Stack. In Boy’s view, this holds with Ethereum co-founder Vitalik Buterin’s vision for soulbound tokens — essentially non-transferable NFTs.
Stack is built as a layer-3 blockchain, meaning its points attestation data rolls up to Base’s layer-2 blockchain, which in turn rolls up to Ethereum. Layer-3s “may not necessarily provide a secure solution” for DeFi, Stack said in a blog post, but they inexpensively reap the benefits of blockchain transparency. Gas fees are low on layer-3s, since data is doubly compressed before being sent to Ethereum.
As token airdrops become an increasingly popular means of bootstrapping projects, Stack’s boosters hope on-chain points attestations will become table stakes in crypto.
Read more: ‘Blast radius’ of new users joining Solana DeFi for the points, liquidity is ‘snowballing’
“Orchestrating airdrops historically is extremely labor and cost-intensive, [but] by shifting the focus to points and putting them on a [layer-3], you drastically reduce the overhead in both cases while maintaining blockchain auditability,” Katie Chiou, principal at Stack investor Archetype Ventures, told Blockworks.
Points managed on Stack are not meant to be traded on open markets. However, points program managers could decide to make the points exchangeable, according to Stack’s product marketing manager Bradley Freeman. He said this could look similar to American Express’ program, where points can be converted into Delta Skymiles.
Blockchain’s usefulness for customer rewards programs isn’t a new idea. Singapore Airlines began using a private blockchain for frequent flier miles in 2018. Starbucks is still beta testing its NFT rewards program.
Read more: Lufthansa to offer NFT rewards program
So far, blockchain points programs have largely remained fringe initiatives. Not everyone is convinced of the need for a points chain.
“I cannot fathom a reason why this is necessary. Points are [ERC-20] tokens without a transfer option,” an X user wrote.
Stack pitched its points chain idea to investors at the Coinbase Ventures Summit in Malibu in October 2023, the project said. Last week, it announced a $3 million seed round. The project also drew plaudits from Jesse Pollak, the founder of Base.
“Everything is going to move [on-chain] — points included. This is because [on-chain], [developers] can build faster, reach more users and embody the open, transparent values of the [on-chain] economy,” Pollak said in a text.